Colombia Shifts Online Gambling Tax From Player Deposits to Operator Revenue

The Colombian government has revised its taxation strategy for the online gambling sector, replacing the 19% value-added tax previously applied to player deposits with a levy based on gross gaming revenue. The updated framework came into force on January 1, redirecting the tax burden toward the actual income earned by operators rather than the total amount of money deposited by customers.

The deposit-based 19% VAT was first introduced in February 2025 as a temporary response to internal unrest. From the outset, the measure drew widespread criticism throughout 2025 because it imposed tax on funds that were wagered multiple times and frequently returned to players as winnings, rather than accurately capturing the operators’ true revenue. Industry stakeholders argued that this approach distorted the economic reality of online gambling and placed an unsustainable burden on licensed businesses.

Gambling operators were particularly vocal in opposing the deposit-based tax, with Codere Online, the Spanish-listed gambling group, emerging as one of its most prominent critics. In November 2025, Codere Online warned that it would halt all future investment in Colombia unless the tax was removed, pointing to the severe impact the policy had on the market’s financial sustainability. Under the former system, license-holders were forced to absorb the full 19% levy while continuing to provide bonuses and incentives to players, significantly straining their operating margins.

Evidence of the tax’s damaging effects quickly became apparent. Licensed operators and the industry trade body Fecoljuegos reported a sharp contraction in market activity, with major performance metrics such as gross gaming revenue, total player deposits, and overall engagement all declining markedly. Estimates suggested that industry revenue in 2025 dropped by as much as 30%, underscoring the depth of the downturn attributed to the deposit-based VAT.

The revised tax policy forms part of a broader emergency economic decree introduced to tackle a fiscal gap created by the failure of the government’s 2025 tax reform. Authorities are aiming to raise more than COP10tn, equivalent to US$2.65bn, in additional funds and are banking on the shift to a GGR-based tax to play a constructive role in boosting public finances.

As the new system takes effect, participants across the online gambling sector are expecting a fairer and more sustainable tax environment, one that better aligns fiscal policy with commercial realities and supports long-term stability in the Colombian market.

By fLEXI tEAM