Legislation

Revenue down as new tax goes into effect in Colombia

Evert Montero, president of the Colombian Federation of Entrepreneurs in Chance and Gambling (Fecoljuegos), told local media outlet Portafolio that following the implementation of the VAT on online gambling the sector has experienced a 30 per cent decrease in gross gambling revenue, indicating a fall in deposits and a shift in user behaviour.

In an effort to counter this decline, platforms have turned to offering promotional bonuses, temporarily offsetting some of the fiscal burden. However, Montero cautions that this approach is not a viable long-term solution.

“This strategy has prevented an immediate loss of customers, but it represents an economic effort that cannot be maintained over time. If the tax policy continues, the financial capacity of operators will be severely affected, compromising formal operations and the resources allocated for health,” Montero said.

According to figures from Fecoljuegos, prior to the tax implementation, a regular bettor would allocate between COP 150,000 and COP 250,000 monthly for betting. However, with the tax coming into effect, deposits and the average amount per player dropped significantly, recording reductions of up to 50 per cent on some platforms during the initial days.

Montero explained that this decline is due to the direct impact of the tax on deposits: “For example, a player who previously deposited COP 100,000 now receives approximately COP 84,000 to bet with, due to the VAT applied on the top-up,” he detailed, emphasizing that this reduction has immediately affected users’ betting capacity, generating a significant fall in deposits.

He also said that the sector proposes “jointly building with the National Government a technical sustainability indicator that allows for an objective measure of the real impact that the tax burden has on the formal operation of online gaming.”

Montero also warned that there is currently a risk of users migrating to illegal platforms. “The implementation of VAT has increased the cost of the betting experience in the formal market, creating an incentive for players to seek unregulated alternatives, where no taxes or controls are applied,” he said.

In February the Ministry of Finance decreed three new taxes that will be in effect until December 31, 2025, with the aim of financing expenses related to the state of internal commotion in the Catatumbo region. The new fiscal measures affect online gambling, the export of oil and coal, and national stamp tax. With Decree 0175 of February 14, 2025, a 19% tax was established on online games of chance, a 1% levy on national sales and exports of oil and coal, and a 1% tax on the stamp duty for transactions exceeding $300 million.