In a decision that has sparked intense debate within Colombia’s online gambling community, President Gustavo Petro’s administration has implemented a 19% VAT on online gambling deposits. This tax, part of a broader economic strategy under Decree 175 of 2025, aims to fund humanitarian efforts in conflict-ridden Catatumbo. Despite the controversy, the government maintains that this levy is essential for addressing fiscal shortfalls within its ambitious COL$523 trillion welfare-focused budget.

The Ripple Effects of the VAT Implementation

The introduction of this VAT is not without its consequences. Industry insiders report a significant 30% drop in online gambling Gross Gaming Revenue (GGR) in the first month alone. This decline is attributed to players seeking alternatives on unlicensed platforms, a move that not only impacts the regulated market’s revenue but also its integrity.

“The imposition of a 19% VAT on online gambling deposits directly impacts volumes negatively, challenging our market dominance,” acknowledges a spokesperson from Kambi, a leading sportsbook systems supplier.

Challenges and Concerns: The Industry’s Response

1. Market Decline: A reported 30% dip in GGR, underscoring the immediate adverse effects of the VAT.
2. Shift to Unregulated Platforms: Players are migrating to unlicensed platforms, bypassing the tax and undermining regulated operators.
3. Financial Strain on Operators: The unusual burden of taxing deposits rather than net revenues is causing significant financial strain.

Looking Ahead: What This Means for Colombia’s Online Gambling Sector

The VAT on online gambling deposits presents a complex challenge for Colombia’s regulated market. While intended as a temporary measure, hints from the Finance Ministry suggest a potential for permanency, raising concerns about the future competitiveness and viability of the sector. With opposition within Petro’s own coalition, the fate of this VAT measure post-2025 remains uncertain.

“Players consciously bypassing this tax by migrating to unlicensed platforms is a trend that hits hard for operators who have attempted to mitigate costs through bonuses but still face stark downturns,” states Evert Montero Cárdenas, president of Fecoljuegos.

Conclusion: Navigating Uncertain Waters

The VAT on online gambling in Colombia is a bold attempt to address fiscal challenges but comes with significant risks to the health of the regulated market. As stakeholders grapple with these new fiscal pressures, the industry’s ability to adapt and innovate will be crucial for its survival and growth. The ongoing debate underscores the delicate balance between taxation for public good and maintaining a vibrant, competitive online gambling sector.

For more insights into how tax models in one jurisdiction can influence others and the evolving landscape of online gambling and sports betting, stay updated with our latest articles.

Understanding the global perspective on online gambling regulations can provide valuable insights. For instance, learning about Europe’s iGaming hub and its approach to hosting major industry events can offer a broader view of how different regions navigate the complexities of the online gambling sector.