Colombia’s Gambling Revenue Craps Out: 30% Decline Following New Tax Implementation
A $100 Deposit Leaves Only About $84 in Gambling Funds
Folding on Revenue
Operators of online casinos and sportsbooks in Colombia have seen their chip stack shrink drastically, with gross gaming revenue (GGR) tumbling 30%. The introduction of a 19% value-added tax (VAT) back in February is responsible for the drop, according to the Colombian Federation of Entrepreneurs in Games of Chance and Luck (Fecoljuegos).
This new online gambling regulation, enacted through Decree No. 0175, has hit some platforms particularly hard, with metrics like deposits and average bet amounts folding by as much as 50% during the initial period, added the industry body.
A High-Stakes Tax
Before the measure took effect on February 21, 2025, mobile gambling apps in Colombia benefited from an exemption that kept deposit fees low. Previously, operators had been operating under a tiered tax structure of 15-17% on GGR, conditional on maintaining return-to-player rates above 83%.
Under the new rules, a $100 deposit leaves only about $84 available for gambling.
This change has reduced the amount players are willing to spend, with average monthly deposits dropping by as much as 50% among casual bettors, explained Fecoljuegos chief Evert Montero in a recent interview with Colombian business outlet Portafolio.
Before the new gambling regulation was introduced, the average monthly spend per user was between $35 and $59, according to recent casino news.
Since Colombia became the trendsetter for the region back in 2016, other countries have since followed suit such as Paraguay and Argentina. However, there is one country that is on the verge of also approving an online gambling bill – Uruguay.
— Casino Compendium (@CasinoCasCom) January 24, 2023
Operators Showing Their Hand
In an attempt to keep players at the table, several operators have implemented creative but unsustainable strategies. Some platforms, including Stake, have been crediting players with temporary “VAT-back” bonuses to offset the tax burden.
This approach essentially means operators are doubling down on their costs by absorbing the tax impact.
“This strategy has avoided an immediate loss of customers, but it represents an economic effort that cannot be sustained over time,” Montero cautioned. “If the tax policy continues, the financial capacity of operators will be severely affected, compromising formal operations and resources allocated to health.”
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Health Funding Facing a Bad Beat
One of the potential casualties of this regulatory shift is the funding of Colombia’s healthcare program. The country’s gambling taxes are directly allocated to national public health projects, with the sector contributing approximately about $233 million in 2024.
The Colombian government implemented the VAT as part of an economic and social emergency decree to address urgent needs in conflict-affected areas, particularly the Catatumbo region. Here, around 30,000 Colombians have been displaced due to violence.
The measure is currently set to remain in effect until December 31, 2025. However, industry groups are actively pushing for the government to reconsider the approach.
As Colombia’s online bet platforms continue to struggle with this new tax reality, the big question remains whether the government will recognize that its regulatory gamble may ultimately result in diminishing returns for both the industry and public coffers alike.
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