Colombia has reintroduced a tax on online gambling deposits following severe flooding across eight provinces. It’s the latest chapter in the country’s turbulent fiscal relationship with its licensed gambling sector, and frankly, operators must be getting tired of this.

President Gustavo Petro signed emergency decrees last Thursday establishing a 16% consumption tax on cash deposits made to online games of chance. The levy applies to all operators serving the Colombian market, regardless of where they’re based. It comes as the outgoing administration scrambles to shore up funding for disaster relief.

The move forms part of a broader emergency package aimed at injecting an additional COP8.6 trillion (around $2.3 billion) into the nation’s 2026 budget. According to government statements, the revised budget allocation proved “insufficient for the annual provision for disaster and public calamity relief” following the flooding crisis.

Budget Battles and Emergency Powers

The emergency tax comes against a backdrop of significant political friction over Colombia’s fiscal planning. Petro, whose four-year term ends ahead of May elections, suffered a major setback in late 2025 when his original 2026 budget proposal was rejected outright.

The subsequently approved revision came in COP10 trillion lower than the initial projection. The government now characterises this as a critical funding gap.

For Colombia’s licensed gambling operators, the deposit tax represents another layer of fiscal burden on top of the standard 15% gambling tax. The sector has experienced considerable regulatory whiplash over the past year, with tax policy shifting repeatedly in response to various government emergencies. In practice, operators are dealing with a moving target.

A Pattern of Emergency Taxation

This isn’t the first time Colombian authorities have turned to gambling taxation to address urgent funding needs. In February 2025, the government introduced a 19% value-added tax on deposits following civil disturbances in the Catatumbo region.

That measure proved deeply problematic for the sector.

By April 2025, the Colombian Federation of Gambling Entrepreneurs reported that online gross gaming revenue had fallen 30% since the VAT’s introduction. The decline carried wider implications beyond operator balance sheets. The Colombian health sector, which received COP990 billion from gambling taxes in 2024, faced a substantial revenue shortfall.

The government’s subsequent attempts to make that VAT permanent failed when the Senate’s Fourth Committee rejected the related Financing Law in December. An emergency decree shifting the tax from deposits to gross gaming revenue was then suspended by the Constitutional Court in January over concerns about its constitutionality.

Legal and Industry Questions

The new 16% deposit tax now faces potential scrutiny on similar constitutional grounds. The government has pre-emptively defended its position, though, arguing that invoking emergency taxation powers in response to flooding constitutes a legally distinct action from previous measures.

“The adoption of tax measures in a previous emergency does not prevent the national government from using them again in a subsequent exceptional situation to address a different crisis,” the decree states.

Whether this interpretation will satisfy the Constitutional Court remains an open question. For Colombia’s gambling operators, the immediate reality is clear. Another tax layer has been added to an already complex and shifting regulatory landscape, just as the sector was beginning to recover from the impacts of the previous levy.

With Petro’s presidency entering its final months and elections approaching, the long-term stability of Colombia’s gambling tax framework remains uncertain. What is certain is that operators serving the Colombian market will need to factor yet another fiscal variable into their strategic planning for 2026 and beyond.

What the team thinks

Sheena McAllister says:

While emergency taxation during natural disasters is understandable from a fiscal perspective, implementing a 16% deposit tax on such short notice creates significant compliance headaches for operators and risks pushing players toward unlicensed alternatives. The real concern here is whether Colombia’s regulatory framework can maintain market integrity when emergency measures override the stability that licensed operators need to invest in the market long term. This approach of treating gambling as an easy revenue tap during crises, rather than building sustainable tax policy, threatens to undermine the very licensing regime that Colombia worked hard to establish.