Colombian Congress Blocks Move to Make 19% Online Gambling VAT Permanent

After almost a year of operating under a 19% value-added tax, Colombia’s gambling industry appears to be just days away from relief, following a decisive vote in Congress to reject legislation that would have permanently enshrined the levy.

Colombia’s Congress has voted down the proposed Financing Law, which sought to make permanent a 19% VAT on online gambling activities. The measure was defeated last Tuesday in the Senate’s Fourth Committee, where lawmakers voted 9–4 against the bill.

The rejected Financing Law included provisions to impose a 19% VAT on games of chance and gambling conducted exclusively online, alongside an increase in the capital gains tax on gambling and lottery winnings from 20% to 30%. Its defeat represents a significant victory for the gambling sector, which has been subject to the VAT on player deposits since February, when the government introduced the measure to help finance the costs associated with ongoing civil unrest in the Catatumbo region.

With Congress voting against the law, the temporary tax is now expected to expire as scheduled on 31 December, effectively bringing the VAT to an end.

The outcome dealt a major setback to the Colombian government. Finance Minister Germán Ávila strongly criticised the decision, describing it as “strictly political, defeatist, and disconnected from the country’s fiscal and social reality”.

The rejection of the Financing Law also has serious implications for public finances. Congress has already approved a national budget totalling COP546.9 trillion ($143.9 billion), leaving the government facing a substantial fiscal shortfall following the failure of the legislation.

Boost for the fight against illegal gambling

Industry representatives had repeatedly warned about the damaging effects of the VAT. When the tax was first introduced, the Colombian Federation of Gambling Entrepreneurs (Fecoljuegos) cautioned that the measure was “unsustainable and unfeasible” for the sector, arguing that it could force licensed operators to exit the market and allow illegal operators to expand their presence.

By early April, Fecoljuegos reported that the introduction of the VAT had already led to a 30% decline in online gross gaming revenue (GGR). In response, operators such as Stake attempted to cushion the blow for players by offering additional bonuses.

According to Fecoljuegos, some companies experienced drops of nearly 50% in key performance indicators, including deposit volumes and average deposit amounts per player.

The federation also highlighted the potential knock-on effects for Colombia’s healthcare system, which benefited from COP990 billion in gambling-related tax revenues during 2024.

Shifting strategies among operators

Gambling operators have been increasingly outspoken about the impact of the VAT on their Colombian operations. Codere Online said during its post-Q3 earnings call that Colombia would no longer form part of the company’s short- to mid-term strategy. The comments followed earlier remarks by CEO Aviv Sher after the Q2 results, in which he said the company would scale back its presence in the market.

Rush Street Interactive, by contrast, struck a more optimistic tone regarding the tax. CEO Richard Schwartz said he expected the VAT to be repealed, expressing confidence in the company’s positioning once the measure expires.

“Our strong operational performance in Colombia positions us well for meaningful upside when normal tax conditions resume,” Schwartz said during the company’s post-Q3 earnings call. He added: “As for the president’s proposed 2026 tax reform, we continue to believe that Congress will not approve the proposed online gaming tax.”

By fLEXI tEAM