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Colombian regulator Coljuegos has published a draft resolution that would cap advertising spend of gambling operators based on reported revenue, while banning sports-betting sponsorships by unlicensed operators.
Colombia has long been considered the north star for online gambling regulation in Latin America, having regulated the industry back in 2016.
But with the market now in its seventh year amid a trend toward tighter regulation in Spain and other European jurisdictions, Coljuegos is proposing tighter restrictions on advertising and responsible gambling.
The regulator's resolution is still in draft form, having been published on Monday (September 25) with a feedback window of five days.
Article 5 of the draft sets new limits on the maximum amount that gambling operators can spend on advertising and sponsorship, corresponding to the amount of revenue-based taxes paid to the regulator the previous year. The more an operator pays, the higher their permissible marketing budget for the coming year.
Operators who outspend their allowable limit will be fined up to 100 percent of the excess spend, according to the draft.
Operators would be responsible for presenting an investment plan for advertising for the coming year to ensure it falls within the authorised range.
Meanwhile, newly licensed operators would only spend up to a maximum of 80,000 legal monthly salaries (roughly US$23m), and would not be allowed to enter the market with an unlimited advertising budget.
Another provision of the draft resolution prohibits professional sports teams in Colombia from entering into advertising contracts or agreements with an unlicensed gambling operator.
Lawyer Juan Camilo Carrasco of Asensi Abogados in Bogotá said this provision could be legally problematic, because “even though the spirit of this drafting makes sense, [Coljuegos] do not have the power over private entities to decide with whom or not they can sign agreements.”
Carrasco said a recent Supreme Administrative Court ruling found that Coljuegos does not have the power to publish resolutions that could be construed as interpreting the law. That power lies exclusively with Congress, it said.
Another problem lies in the vague language of the draft resolution, he said.
“Most of the conditions are not defined in the draft and leave the door open for subjective interpretations,” he told Vixio GamblingCompliance.
These include, for example, “concepts about responsible gambling and risk behaviours, without defining the scope of those elements”, and “some reporting obligations about safer gambling measures, without defining or specifying such conditions”.
The final article of the draft would require all Colombian operators to establish “mechanisms and protocols” to analyse risky user behaviour, including objective criteria such as volume, frequency and varieties of gambling or depositing.
A transition period for compliance with the new standards, should they be approved, is not specified in the draft resolution.
The proposed regulation comes amid a spate of changes to advertising rules across Latin America.
Neighbouring Ecuador last month banned all advertising by unregulated online betting platforms, while Chile has similarly proposed banning all sports partnerships with online gambling sponsors, recently ordering the National Association of Professional Football to terminate such contracts.
