Colombia has slapped a 16% emergency tax on online betting turnover as part of a sweeping fiscal package designed to fund disaster recovery following catastrophic flooding across eight provinces. The measure, introduced through Decree 0240 by President Gustavo Petro’s administration, targets the gross volume of wagers placed through digital platforms. Prize payouts are excluded.

The government reckons the tax will generate 8.6 trillion Colombian pesos—roughly $2.3 billion—for the national budget in 2026. Officials have justified singling out the iGaming sector by citing its robust revenue growth in recent years. Their logic: it can absorb additional fiscal pressure without destabilising other economic sectors.

Industry Pushback and Historical Context

The announcement has been met with considerable scepticism from operators and industry bodies. Hardly surprising, given Colombia’s recent track record of aggressive taxation in the gambling space.

In February 2025, the government imposed a temporary 19% value-added tax on customer deposits in response to civil unrest in the Catatumbo region. According to the Federation of Gambling Entrepreneurs, that measure resulted in a 30% decline in industry revenues. A stark illustration of the market’s sensitivity to fiscal intervention.

Colombia’s Constitutional Court ultimately blocked the government’s attempt to make the deposit tax permanent. Still, the administration maintains it has solid legal grounds for this latest measure. The presidency has framed the flooding crisis as an unprecedented emergency requiring immediate fiscal action. Temporary measures targeting high-growth sectors, they argue, represent a necessary response to climate-related catastrophe.

Broader Fiscal Reforms

The emergency budget extends beyond the betting sector. It includes temporary relief provisions such as reduced penalties and interest charges for taxpayers with outstanding debts to the National Tax and Customs Directorate (DIAN). Plus, the package introduces a complementary 19% tax on undeclared assets effective from April 2026, alongside revised taxation rules for foreign companies and subsidiaries operating within Colombian jurisdiction.

Market Implications

The long-term sustainability of Colombia’s regulated betting market under repeated fiscal strain remains an open question. The sector has shown resilience and growth, admittedly. But the cumulative impact of successive tax hikes could erode operator margins. Worse, it might drive activity towards unlicensed competitors. The challenge for policymakers will be balancing immediate revenue needs against the risk of undermining a sector that has, until recently, been a success story for regulated expansion.

For international operators with Colombian exposure, the pattern of ad hoc taxation introduces real uncertainty into medium-term planning. The market’s regulatory stability, once considered a regional benchmark, now appears subject to shifting political priorities and fiscal demands.