Fecoljuegos warns new tax measures threaten Colombia’s online gambling industry

Online gambling companies in Colombia have transferred $1.1 trillion to the nation since 2017, but new tax measures threaten their operations, according to industry representatives. The government’s Decree 0175, issued to address the crisis in Catatumbo, eliminates the VAT exemption for online gambling, raising concerns about the sector’s viability. The Colombian Federation of Gambling Entrepreneurs (Fecoljuegos) warns that the tax burden will leave operators with only 29% of their recorded income, making their operations unsustainable.

The decree, part of the state of emergency measures, has sparked fears of economic and legal challenges for thousands of Colombians. Fecoljuegos argues that the new tax will increase operational costs, pushing the sector’s tax burden to 70.5%, and could lead to partial or total suspension of activities. The federation also highlights the insufficient five-day deadline for implementing the changes, calling it unrealistic given the technical adjustments required in billing, payment, and tax reporting systems.

The industry warns that the new tax could drive users to unregulated platforms, undermining financial stability and player safety. Fecoljuegos emphasizes that the measure could reduce funding for public health, as the sector has contributed significantly to social projects. They urge the government to reconsider the immediate application of the decree and establish a transition plan to mitigate negative impacts.

Additionally, the federation points out that only five accredited laboratories in Colombia can certify the technical changes needed to implement the VAT, potentially causing delays. Without proper certification, operators face operational blockages and possible paralysis of activities. Fecoljuegos stresses that a balanced approach is needed to ensure the sector’s sustainability and continued contribution to public welfare.