Colombia’s highest administrative court has dealt a real blow to the regulator’s enforcement powers, suspending key provisions of a 2023 resolution that imposed strict advertising and sponsorship requirements on licensed online gaming operators. The decision effectively halts a controversial 20% advertising spend cap tied to gross gaming revenue, at least for now and pending a final ruling.

Economic Freedom Trumps Regulatory Authority

The Council of State found that Coljuegos had overstepped its legal mandate in several critical areas. Most notably, the court ruled that the advertising investment cap constituted an unjustified restriction on economic freedom, finding no statutory basis for the regulator to impose such financial limitations through administrative resolution alone. The judges emphasised that only Colombia’s legislature could adopt measures with such significant implications for economic activity and monopoly revenue generation.

Four Major Provisions Blocked

The suspension affects a broader range of controls beyond the advertising cap. The court paused enforcement of reporting requirements that obliged operators to submit detailed annual advertising plans and quarterly records, viewing these as an overreach into commercially sensitive business information. Additionally, sanctioning provisions tied to unauthorised trademark usage and share transfer approval requirements have been suspended pending final adjudication.

Worth noting: the court recognised the distinction between regulating advertising content and imposing financial constraints on marketing spend. Coljuegos retains authority to ensure transparency in how operators promote themselves and to pursue illegal gaming providers under existing statutory powers. The regulator’s ability to combat unlicensed competition remains intact.

A Turning Point for Industry Relations

The ruling matters not just for its immediate effect but for its constitutional reasoning. The court’s emphasis on protecting commercial confidentiality and limiting regulatory overreach suggests future challenges to aggressive compliance requirements may succeed. For an industry already navigating elevated taxation, including a 19% VAT on player deposits introduced this year and a new 16% levy tied to national recovery efforts, the decision offers some relief from administrative burden.

Gaming operators have contributed substantially to Colombia’s public finances under President Gustavo Petro’s administration, with over COP4 trillion ($970 million) directed to healthcare since 2022. The sector’s revenue significance gives it considerable importance in policy discussions, and this court decision reflects recognition that regulatory frameworks must remain proportionate.

The Council of State will issue its final judgment on whether the challenged provisions should be permanently annulled. Should that occur, any reintroduction of similar measures would require explicit legislative authority, fundamentally reshaping the regulatory landscape.

What the team thinks

Sheena McAllister says:

While the court’s decision highlights a genuine tension between regulatory overreach and legitimate operator interests, the outcome risks undermining Colombia’s credibility as it develops its competitive regulated market. From a compliance perspective, what’s notably absent here is discussion of whether Coljuegos might have achieved its player protection objectives through less restrictive means, such as spend caps tied to player loss limits rather than operator revenue, which would have withstood legal scrutiny while preserving the regulator’s authority to act. The real regulatory lesson isn’t that advertising controls are inherently unlawful, but that Latin American regulators need to ground their enforcement decisions in clearer statutory language and proportionality assessments from the outset, rather than learning these boundaries through costly litigation that delays market development.