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Colombian gambling regulator Coljuegos is being challenged in court over its controversial advertising resolution that caps the amount that operators can spend on marketing according to their reported annual revenue.
The resolution came into effect in January and was most notable for the restriction on annual advertising spending, which critics said would favour Colombia's largest operators such as BetPlay.
In late July, Colombian lawyer Juan Carlos Ospina Calvo filed a legal action against the resolution in court, also asking for a provisional suspension.
Although Ospina Calvo is a qualified lawyer, he filed the lawsuit as a general citizen, as is allowed under Colombian law.
According to the resolution, licensed online operators cannot spend more than 20 percent of their revenue from the prior-year net of taxes on marketing and advertising.
Operators must also send their advertising plans to Coljuegos every year to ensure compliance.
Operators can continue to sponsor Colombian sports teams but their contracts must fall within the spending limits.
When the final version of the resolution was first published last October, the industry expressed concern that the spending limits outlined in an initial draft had been reduced up to tenfold in certain circumstances.
At the time, Juan Camilo Carrasco, a lawyer at Asensi Abogados in Bogota, told Vixio GamblingCompliance he was “very surprised with the content of the document” due to several errors and the change in allowed marketing budgets.
He also commented that the resolution demonstrates excessive power to create new rules that Coljuegos does not legally possess.
Colombian national media association (Asomedios) referenced the advertising resolution as part of a statement on its negotiations with the government on wider policies: “The conversation revolved around the challenges of the economic sustainability of the media in the country, the difficulties of monetizing advertising in the digital environment, the regulatory asymmetries between broadcasters and digital platforms, the needs for a modernization of the legal frameworks and the importance of recognizing fair and equitable payments for copyright and related media ownership.”
Critics claim the advertising resolution could discourage interest from new market entrants in Colombia, as spending is also capped for the first six months at either 20 percent of the estimated gross gaming revenue for each year of the operator's concession or 8,000 monthly minimum salaries (approximately $2.5m).
After six months, the regular rules will apply and maximum advertising spend will be based on reported revenue.
A final decision in the legal challenge is expected in the next five to seven months.
