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After publishing a draft resolution two weeks ago, Colombian regulator Coljuegos has approved the final version of a resolution to restrict online gambling advertising that comes into effect from January 1, 2024.
Of note are the limits that will now be placed on advertising spending by licensed online gambling operators in Colombia.
According to the resolution, adopted on Friday (October 20), new caps to limit gambling advertising spend will be imposed based on an individual operator's gross gaming revenue for the year prior.
According to Article 5 of the resolution, operators' maximum advertising spend as of 2024 can be one of two options: a total maximum of 11,000 Colombian monthly minimum salaries (SMMLV), which is about $3m; or 20 percent of their prior-year revenue after deduction of taxes and regulatory fees paid.
The second figure will be calculated by subtracting 15 percent of operating rights and 0.15 percent of administration fees from the operators' total annual gross gaming revenue (GGR).
Operators new to the Colombian market will no longer be able to spend whatever they choose to capture market share, with the new resolution seemingly a natural deterrent for those considering entry to Colombia.
A new operator's spending will be limited in the first six months to either 20 percent of the GGR projected for each contractual year of their concession or a total of 8,000 SMMLV (approximately $2.5m). After six months, the regular rules will apply.
In the original draft resolution, published at the end of September, the advertising spending limits were calculated differently. Spending limits were in bracket ranges, based on the amount paid for operating rights the year before.
It should be noted that new entrants under the initial draft could have an initial ad budget of up to 80,000 SMMLV — ten times the limit in the final version.
Juan Camilo Carrasco, a lawyer at Asensi Abogados in Bogotá, told Vixio GamblingCompliance that he is “very surprised with the content of the document” due to its differences from the original draft and scope.
The previous draft was written "in such a way that exceeds the powers to create rules”. The new version is, by his estimation, even more egregious.
Under the new regulations, Coljuegos will have tight control of marketing budgets.
According to Article 7, each operator must submit their marketing investment plan with estimated investments every year. Coljuegos reserves the right to request numbers every quarter, down to every invoice for advertising.
An article governing sponsorship contracts with sports teams remains unchanged from the initial draft resolution. It allows for operators to have unlimited contracts and sponsorships, as long as they remain within spending limits and are approved by Coljuegos.
Other provisions of the advertising resolution will require operators to ensure marketing via social and digital media cannot be accessed by minors.
Online gambling operators will also have to deploy mechanisms to deduct potentially risky behaviour on the part of their users. Any flagged players should no longer receive marketing communications, with operators required to report annually to Coljuegos on the number of identified players and the protocols put in place to comply with the advertising restrictions.
Further provisions will also require operators to refuse multiple deposits made by credit card, or deposits made by credit cards not belonging to the player.
Additional reporting by James Kilsby.
