Colombia’s 19% Gambling VAT Sparks 30% Revenue Decline and Industry Alarm

The figures raise fresh concerns about the viability of licensed gambling operations under the current tax regime. Speaking to Portafolio, Fecoljuegos president Evert Montero said operators are being forced into unsustainable stopgaps just to retain users.

“This strategy has avoided an immediate loss of customers, but it represents an economic effort that cannot be sustained over time.”

Operators like Stake have attempted to absorb the VAT impact by offering bonuses equivalent to the tax amount — effectively refunding players’ losses. But as Montero warned, the margin pressure is untenable. And the wider implications are now coming into focus.

Policy Misfire?

The government’s decision to apply the 19% VAT to deposit values — rather than net spend or GGR — has drawn particular criticism. The mechanism means users effectively lose a fifth of their playable funds upfront, discouraging engagement and shrinking deposit volumes almost overnight.

Fecoljuegos said that some operators saw deposit volumes and average transaction sizes fall by nearly 50% in the first days after the tax went live. For context, Colombian bettors were previously spending COP150,000–COP250,000 per month on average.

“The tax burden substantially alters user behaviour,” Montero noted, “forcing operators into short-term loyalty strategies and eroding the competitiveness of the formal market.”

A Gift to the Black Market?

The drop in regulated activity is only half the problem. Fecoljuegos is warning that Colombia may be inadvertently boosting illegal gambling by pricing out its compliant operators.

“The implementation of VAT has made the gaming experience in the formal market more expensive, creating an incentive for players to seek unregulated alternatives, where no taxes or controls are applied,”

the federation said in a statement.

That shift could be particularly damaging given Colombia’s reliance on gambling revenue to fund its healthcare system. Legal operators contributed nearly COP1 trillion in 2024 — funding that may now be at risk.

Sector Seeks Policy Reset

Fecoljuegos is calling for a recalibration of the tax policy, urging the government to base future decisions on “technical criteria” and in consultation with stakeholders who meet their compliance obligations.

For now, Colombia’s regulated gambling market finds itself in a familiar bind: squeezed between ambitious tax collection goals and the realities of consumer behaviour.

Without a rethink, the long-term sustainability of the licensed sector — and the public benefits it funds — remains in serious doubt.