Colombia court strikes down 19% gambling tax in major win for licensed operators

Colombia’s Constitutional Court has annulled the emergency 19% VAT applied to online betting, removing a major tax burden from licensed operators and opening the door to refunds for amounts collected while the measure was in force.

Colombia’s regulated online gambling sector has secured a major legal victory after the Constitutional Court struck down the emergency tax package that had imposed a 19% VAT on online betting. The decision removes one of the most controversial fiscal measures affecting licensed operators and restores the sector to its previous tax structure.

The ruling was issued under Sentence C-079/2026, in which the Court declared unconstitutional Decree 1474 of 2025. That decree had introduced tax measures under the economic emergency declared by the government in December 2025, including the 19% VAT on online games of chance and betting activity.

The Court found that the tax decree could not remain in force because it depended on the broader emergency decree that had already been declared unconstitutional. As a result, the legal basis for the temporary VAT disappeared, forcing the measure out of Colombia’s legal system.

For licensed operators, the decision is especially important because the 19% VAT had added a heavy new cost on top of the existing gambling tax framework. Colombia’s online gambling market has long been considered one of the most mature regulated markets in Latin America, and operators argued that the emergency tax risked weakening legal platforms while giving illegal or offshore competitors a stronger advantage.

The ruling also creates a refund issue. The Court ordered that taxes collected under the invalidated decree should be returned under the applicable rules, and Colombia’s tax authority, DIAN, is expected to establish mechanisms for handling reimbursements. Industry reports estimate that the government may need to return about COP 25 billion collected during the short period when the measure was active.

The case is also politically significant. The government had used emergency powers to introduce fast fiscal measures, but the Court’s decision limits that route and sends a clear message that major gambling tax changes must follow proper constitutional and legislative procedures. For the betting sector, it reduces immediate fiscal pressure but does not end the debate over how online gambling should be taxed.

Licensed operators will now continue under the standard regulatory and tax framework, including the existing levy on gross gaming revenue. However, the government may still seek new tax measures through Congress, especially as gambling remains a politically sensitive source of potential public revenue.

For Colombia’s gambling market, the ruling brings short-term relief and greater legal certainty. At the same time, it shows that taxation, constitutional limits and market sustainability will remain central issues in the country’s gambling policy. The next stage will depend on how quickly DIAN implements refunds and whether the government chooses to pursue a new tax proposal through ordinary legislation.