Colombia’s Constitutional Court has ruled that President Gustavo Petro’s emergency economic decree was unconstitutional, ending a 13-month effort to impose new taxes on the country’s online gambling sector through executive action. The decision means any future gambling-related tax, including measures affecting crypto-funded activity, must now be approved through Congress.
Executive route shut down by the court
At the center of the dispute was Decree 1390, signed by Petro’s cabinet in December. The court found that the decree exceeded the president’s constitutional authority during an emergency. The measure was part of a wider fiscal package worth about $3.1 billion, which also included a 19% VAT on online gambling gross gaming revenue, higher VAT on alcohol, a surcharge on financial institutions, and taxes on luxury goods.
The tax battle began in February 2025, when the government first imposed a temporary 19% VAT on online gambling deposits to help finance the response to unrest in Catatumbo. Industry group Fecoljuegos said the tax led to a 30% drop in online gross gaming revenue within months, while some platforms saw deposits and player activity fall by nearly 50%. Monthly transfers from the gambling sector to Colombia’s healthcare system also reportedly declined from around $9 million to $6.1 million.
Crypto deposits entered the tax language
After the Senate’s economic committee rejected a bill to make the tax permanent by a 9-4 vote, the Petro administration kept trying to preserve the measure through decrees. The Constitutional Court had already suspended the plan on January 29 in a 6-2 vote. In March, the government introduced Decree 0240, replacing the VAT approach with a 16% consumption tax on digital gambling platforms.
That decree was notable because it explicitly defined taxable deposits as those made using “cash, money transfers, or cryptocurrencies,” whether from inside or outside Colombia. According to the source material, this marked the first time Colombian legislation expressly brought crypto-funded gambling activity into the tax framework. With the court now shutting down the emergency-decree path, that mechanism has lost its immediate legal footing as well.
Relief for operators, uncertainty for tax policy
The market reaction was relatively positive, with Colombia’s COLCAP index rising after the ruling as investors interpreted it as evidence that institutional checks remain intact. For licensed operators, the judgment offers short-term relief and returns the sector to the standard 15% tax on gross gaming revenue.
Still, the broader fiscal problem remains. The report says the rejection of the financing bill left Petro’s government with an uncovered 2026 budget gap of more than 16 trillion Colombian pesos. That leaves the administration facing a choice between spending cuts worth roughly 2.5% of GDP or passing new legislation. With less than seven weeks before the presidential election, legal experts cited in the report consider it unlikely that a new gambling tax bill will pass in time. For the crypto sector, the case highlights a key point: Colombia has already attempted to formally tax gambling deposits made with digital assets, but any durable framework now depends on a conventional legislative process.