Colombia’s Petro Makes Last-Ditch Push for Permanent Online Gambling VAT Before Leaving Office

Key Points

• Colombia’s outgoing Petro government submitted a new tax reform bill on Monday seeking a permanent 19% VAT on online gambling deposits, with inauguration of successor Abelardo de la Espriella set for 7 August 2026.
• The bill projects COP1.7 trillion ($530.8 million) in tax revenue from online gambling in 2027, though Fecoljuegos previously reported a 30% GGR crash within two months of the VAT’s February 2025 introduction.
• Baker McKenzie confirms the proposed permanent VAT would revert to a deposit-based calculation, the same structure the industry calls fundamentally flawed and unsustainable.

Petro’s Parting Shot at the Online Gambling Sector

Colombia’s President Gustavo Petro has weeks left in office. His replacement, Abelardo de la Espriella, is set for inauguration on 7 August 2026. Yet before his four-year tenure closes, the Petro administration has filed one more attempt to permanently cement a 19% value-added tax on online gambling operators, submitting a fresh tax reform bill to Congress on 24 July.

Most outgoing administrations conserve political capital. Petro, by contrast, has spent the last year fighting industry resistance, congressional vetoes, and court suspensions in pursuit of this one measure. The latest bill is his administration’s most direct attempt yet, a permanent structure rather than another emergency decree.

According to global law firm Baker McKenzie, which published a detailed analysis of the 2026 tax reform bill on 24 July, the proposed VAT would apply at Colombia’s general 19% rate on online gambling, with the taxable base being the value of the deposit made by each bettor. Cryptocurrency payments are explicitly included. Operators, including those based abroad, would be liable for collection.

That deposit-based structure is the crux of the industry’s frustration, and the government is reviving it despite consistent objections.

Why a Deposit Tax Is the Industry’s Flashpoint?

Fecoljuegos, the Colombian Federation of Gambling Entrepreneurs, has been unequivocal in its opposition to this specific model. In a statement responding to the latest proposal, the federation described the 19% VAT applied to deposits as being “based on fictitious grounds, not a real business variable.”

The logic is stark. Player deposits are recycled through a platform multiple times. Fecoljuegos estimates that approximately 94% returns to players as prizes, leaving the operator’s gross gaming revenue at around 6% of total deposits. Applying a 19% tax to the deposit total, rather than to that 6% margin, generates a tax burden that dwarfs the operator’s actual earnings.

“It’s comparable to applying this tax to deposits made in the financial sector,” the federation said. “The money enters the system, is reused several times, but does not in itself constitute added value or capital income.”

Juan Carlos Restrepo, president of the Colombian Association of Gaming Operators (Asojuegos), was direct about the downstream consequences. “What the trend has shown in recent months is that the transfer to healthcare that was made directly has decreased. Even the VAT itself that has been collected has lost strength,” Restrepo told Mañanas Blu.

The government disputes this reading. The bill itself states there is “no evidence of significant deterioration in the sector that would justify terminating or scaling back the measure.” That claim directly conflicts with data from Fecoljuegos, which reported a 30% fall in online GGR within two months of the VAT’s first introduction in April 2025. Some operators recorded declines of close to 50% across deposits and average deposit amounts per player.

A Timeline Built on Emergency Decrees and Congressional Defeats

The history of this tax is, at this point, almost as contentious as the tax itself. Understanding what Petro is now attempting requires a clear picture of how the previous efforts collapsed.

• February 2025: The VAT was first introduced on an emergency basis following civil disturbances in the Catatumbo region, invoking Article 213 of Colombia’s Political Constitution. It was set at 19% on player deposits.
• December 2025: The Petro government attempted to make the VAT permanent through a Financing Law. The Senate’s Fourth Committee defeated the bill by a 9-4 vote, described by Finance Minister Germán Ávila as “strictly political, defeatist and disconnected from the country’s fiscal and social reality.”
• January 2026: After the VAT structure was shifted from deposits to gross gaming revenue, Colombia’s Constitutional Court suspended the relevant emergency decree, citing constitutionality concerns. Juan Camilo Carrasco, managing partner of Sora Lawyers, described the court’s intervention as “unprecedented,” marking the first time in Colombia’s constitutional history that such a decree had been provisionally suspended.
• March 2026: A fresh emergency decree reintroduced a 16% consumption tax on deposits in response to severe flooding across eight provinces, adding yet another layer of emergency-driven taxation.

Now, in the administration’s final days, the bill attempts to bypass emergency powers entirely and push the 19% deposit VAT through Congress as permanent legislation. Baker McKenzie’s analysis confirms the measure seeks COP21.9 trillion in total revenue across multiple sectors for 2027, with online gambling’s taxable base reverted to deposits.

The Revenue Argument and Its Weak Foundation

The government’s projections are significant. The bill estimates that online gambling alone could generate COP1.7 trillion ($530.8 million) in tax revenue during 2027 if the VAT is enacted. The broader reform aims to generate 1.0% of Colombia’s GDP in additional revenue for 2027.

Those numbers are built on assumptions that the industry and some economists find difficult to accept. Fedesarrollo director Luis Fernando Mejía had previously noted that the COP16.3 trillion sought in the defeated 2025 Financing Law represented less than 3% of Colombia’s national budget, arguing the fiscal emergency framing was overstated.

The government’s own logic on the gambling side also carries a degree of internal tension. If online GGR genuinely collapsed by 30% under the first iteration of the VAT, as Fecoljuegos reported, projecting COP1.7 trillion in stable 2027 revenue requires assuming operators will absorb the tax rather than shrink further or exit. The bill does not address how it reconciles those two positions.

The government has, however, offered a horizontal equity argument. Land-based casinos already face a 19% VAT. Without applying the same rate to online platforms from 1 January 2027, the bill argues, digital gambling operators would receive “preferential treatment compared to physical gambling establishments.” The bill states directly that “applying the general VAT rate to online platforms reduces the differential treatment afforded to the consumption of goods and services.”

What the Incoming Government Inherits?

Petro’s successor, Abelardo de la Espriella, takes office on 7 August. The incoming administration will inherit a Congress that has twice rejected or had courts suspend efforts to make this tax permanent. It will also inherit a gambling sector that has spent over 18 months absorbing emergency levies, shifting its systems, and in some cases pulling back from the market.

Codere Online indicated following its Q3 2025 earnings that Colombia would not feature in its short-to-medium-term strategy. That followed its CEO’s post-Q2 statement signalling a market retreat. Rush Street Interactive took a more measured view, with CEO Richard Schwartz stating he expected any new gambling tax to be scrapped and telling investors on a post-Q3 earnings call: “Our strong operational performance in Colombia positions us well for meaningful upside when normal tax conditions resume.”

Whether the new administration pursues, renegotiates, or quietly shelves this bill remains an open question. What is clear is that the Petro government has structured the bill in a way that leaves its successor an immediate decision to make.