Colombia’s Constitutional Court ruled on April 9 that President Gustavo Petro’s emergency tax decree was unconstitutional, dealing a major blow to the government’s attempt to impose new taxes on the online gambling sector through executive action. The decision means any future gambling tax must go through Congress rather than be enacted by presidential emergency powers.
A $3.1 Billion Revenue Plan Falls Apart
The overturned measure, known as Decree 1390, was part of a broader fiscal package designed to raise about $3.1 billion, or roughly 12 trillion Colombian pesos. It included a 19% VAT on online gambling gross gaming revenue, higher VAT on alcoholic drinks, a surcharge on financial institutions, taxes on luxury goods, and revised wealth assessments. The court found that the government had overstepped constitutional limits after its legislative tax proposal had already been rejected in Congress.
Industry Pressure and the Crypto Tax Angle
The dispute began in February 2025, when Petro’s administration first introduced a 19% VAT on online gambling deposits as a temporary emergency measure. According to industry group Fecoljuegos, the tax caused online gross gaming revenue to fall by 30%, while some operators saw deposits and user activity drop by nearly 50%. Monthly transfers from the gambling sector to Colombia’s healthcare system also declined from $9 million to $6.1 million.
After the Senate’s Fourth Economic Committee voted 9-4 against making the measure permanent, the government tried again through executive decrees. In March, it introduced Decree 0240, replacing VAT with a 16% consumption tax on digital gambling platforms and explicitly defining deposits made via cash, remittances, or cryptocurrency as taxable. That made it the first Colombian legal measure to clearly bring crypto-funded gambling activity into the tax framework.
Next Step Likely Runs Through Congress
The court had already suspended Decree 1390 in a 6-2 vote on January 29, then later nullified the initial emergency route before formally declaring the decree unconstitutional. Together, those rulings largely closed the government’s administrative path for pushing through gambling taxes. With an estimated 16 trillion peso budget gap for 2026 after earlier fiscal setbacks, the administration must now either cut spending or return to Congress with a new bill.
Markets reacted positively, with the COLCAP index rising after the decision, suggesting investors viewed the ruling as evidence that institutional checks remain intact. Legal analysts say a new gambling tax bill is unlikely to advance before the presidential election. For licensed operators, the judgment offers short-term relief, but the long-term tax treatment of digital gambling, especially where cryptocurrency payments are involved, remains unresolved.