The Constitutional Court of Colombia declared Legislative Decree 1390 of December 22, 2025, unconstitutional, through which the government of Gustavo Petro had decreed a State of Economic, Social, and Ecological Emergency throughout the national territory for a period of 30 days. With this decision, the regulation definitively loses its validity and ceases to produce legal effects, closing the path to an ambitious package of fiscal measures that the Executive sought to implement without going through Congress.
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What the decree sought and why online gambling was in the crosshairs
The now-annulled decree granted the Executive the power to issue regulations with the force of law under the argument of a fiscal and social crisis. The objective was clear: to collect nearly 11 trillion Colombian pesos through a battery of wide-ranging tax measures.
Among them, the increase in VAT on liquors from 5% to 19%, a 15% increase in income tax for financial entities (raising the rate up to 50%), the imposition of 19% VAT on luxury goods such as yachts and high-displacement motorcycles, and the application of that same percentage to income generated by online gambling stood out. This last point directly impacted betting operators and digital casinos operating in the country, raising alarms in the industry due to its possible effects on competitiveness and migration toward unregulated platforms.
The Court’s argument: limits on exceptional power
Magistrate Carlos Camargo Assis, rapporteur of the decision, maintained that Decree 1390 violated essential principles such as the separation of powers and the democratic order. According to the ruling, the Executive assumed powers belonging to the Legislative branch without meeting the strict requirements demanded by the Constitution to declare a state of emergency.
The Court emphasized that the facts invoked by the Government did not meet the criteria of unpredictability and extraordinary gravity necessary to justify this type of measure. Along those lines, the magistrate went further by pointing out that the decree responded, in essence, to a political deadlock resulting from the lack of support from Congress for the proposed fiscal reforms, rather than an exceptional crisis that would enable the use of extraordinary powers.
From provisional halt to final ruling
The outcome was, to a large extent, predictable. The decree had already been provisionally suspended on January 29, 2026, following a vote of six magistrates in favor and two against. The final decision did nothing more than confirm that majority and close the process definitively.
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Likewise, the Plenary Chamber ruled on derived regulations. Legislative Decrees 1474 of 2025 and 044 of 2026, issued in development of the main decree, will remain without effect until the Court issues a substantive ruling on their constitutionality. With this, the legal framework that supported the Government’s fiscal package remains, for now, completely dismantled.
Colombia, at the same fiscal crossroads as Mexico and South Africa
The ruling once again brings to the table a recurring tension in Latin America and other emerging markets: how to increase tax collection without compromising the sustainability of regulated industries such as gambling. Recent cases, such as the 50% tax burden on GGR in Mexico or regulatory strategies in South Africa, reflect a common pattern: the greater the fiscal pressure, the greater the risk of expansion of the illegal market.
In Colombia, the discussion does not disappear, but it changes setting. Any attempt to tax online gambling more intensely (including a potential VAT) must now follow the ordinary legislative path, with political debate, negotiation, and greater technical scrutiny.
A ruling that redefines the board
Beyond the immediate impact, the Constitutional Court’s decision sets a key precedent regarding the limits of executive power in contexts of fiscal tension. It also sends a clear signal to the markets: regulatory stability cannot be built on legal shortcuts.
For the gambling industry, the message is double. On the one hand, a tax burden that threatened its competitiveness is avoided (at least temporarily). On the other, a period of uncertainty opens up in which the debate on taxes, regulation, and market control
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