Colombia, one of Latin America’s most advanced and regulated online gambling markets, is facing a major regulatory shift after the Constitutional Court led by magister Paola Andrea Meneses Mosquera struck down an emergency tax on digital betting and ordered the government to return collected funds.
In Ruling C-079 of 2026, with Justice Juan Carlos Cortés González as rapporteur, the Court declared unconstitutional Legislative Decree 1474 of 2025, which had imposed a 19% VAT on online gambling operations. The decision was unanimous (8-0) and followed the earlier annulment of the emergency framework itself under Ruling C-075 of 2026, which invalidated Decree 1390 of 2025. The Court found that the government failed to demonstrate an unforeseen crisis, instead attempting to address structural fiscal issues through extraordinary powers.
Paola Andrea Meneses Mosquera
The ruling instructs Colombia’s tax authority, the DIAN, led by Carlos Emilio Betancourt Galeano, to refund taxes collected during the decree’s validity, including indirect taxes affecting online gambling, provided taxpayers can prove payment. Initial estimates place total refunds at around COP 25 billion (≈US$6 million), although no official breakdown confirms how much relates specifically to the online betting sector.
The decision carries weight for a market that has become a regional benchmark. Under the oversight of Coljuegos, chaired by Marco Emilio Hincapié Ramírez, Colombia operates a licensed online gambling system with 14 authorized operators, governed by Law 643 of 2001, which establishes gambling as a state-controlled monopoly funding public healthcare. In 2025 alone, the sector generated over COP 1.1 trillion in transfers, while online betting exceeded COP 10 trillion in turnover, accounting for roughly 47% of total gambling revenues nationwide.
However, the ruling does not remove fiscal pressure on the industry. Following the VAT repeal, the government introduced a new levy through Decree 0240 of 2026, establishing a 16% national consumption tax on online gambling, keeping the sector at the center of Colombia’s tax strategy.
The Court's decision establishes a clear path for the limits of the Executive Branch in fiscal matters and sends a message at the continental level, even in high-growth, highly regulated markets like Colombia, fiscal expansion must rely on solid legal frameworks rather than emergency powers. For the global gambling industry, the outcome underscores a critical shift — regulatory stability remains intact, but taxation is becoming more contested, closely scrutinized, and structurally decisive for market evolution.
