Colorado is Coming for Video Game Microtransactions and Teen Social Media Feeds

The Bottom Line

If your kids play Fortnite or scroll TikTok, this bill changes how those platforms operate in Colorado. It forces gaming and social media companies to enact strict privacy defaults for minors, bans late-night push notifications, and slaps a 5% state fee on digital video game purchases to fund public schools.

What This Bill Actually Does

HB26-1148 introduces a minimum duty of care for online gaming platforms that operate in Colorado. Essentially, if a company makes most of its revenue online and offers games that kids play, it must ensure its design doesn't cause emotional distress or compulsive use. The bill mandates that gaming accounts for minors be set to the highest privacy settings by default. This means no direct messaging with adults, no location tracking, no search engine indexing, and absolutely no push notifications between midnight and 6:00 a.m. Companies are also required to give users a simple, responsive tool to delete their accounts within 15 days.

It's not just video games; social media platforms face new rules, too. The bill requires these platforms to pull back the curtain on their algorithmic recommendation systems. They have to publish exactly how their algorithms work, what data they collect from minors, and how that data influences what users see in their feeds. Most notably, social media platforms are strictly banned from using algorithms to push or sell illicit substances—which the bill specifically defines to include unauthorized high-THC hemp products and controlled substances—to minors.

Beyond privacy, the state is targeting the "microtransaction" economy. The bill requires gaming platforms to list all in-game purchases in actual U.S. dollars, stripping away confusing in-game currencies that obscure how much money is actually being spent. On top of that, it slaps a 5% state fee on all add-on transactions made by minors. Every time a kid buys a digital skin, an upgrade, or a battle pass, a portion of that sale goes directly to the state's public education system.

What It Means for You

If you are a parent, this bill acts as a digital safety net for your kids, targeting the exact features designed to keep them glued to their screens. Starting December 1, 2026, you won't have to spend hours digging through settings menus to protect your child's data. By default, adults won't be able to search for, message, or track the location of your kids on gaming platforms unless you or your child explicitly change the settings. You'll also get a reprieve from late-night digital nudges—platforms are legally banned from sending push notifications to minors between midnight and 6:00 a.m., which could help enforce bedtime boundaries.

From a financial standpoint, you will see a direct change in how digital purchases work. First, the bill outlaws the mental gymnastics of converting real money into fictional video game currency; all purchases aimed at minors must be listed in plain U.S. dollars at the point of sale. However, those digital purchases will get a little more expensive. A 5% fee will be applied to every add-on transaction your kid makes in a game. If they spend $20 on a new character skin, an extra dollar is added to the bill to fund the state's schools. It might sound small, but for households where microtransactions are a frequent reward, it will add up.

You and your teens should also expect more friction when signing up for new accounts. Because platforms are on the hook to identify who is and isn't a minor, you will likely see an increase in age assurance prompts—meaning you might need to upload an ID or use third-party age verification software just to access certain games or social media features. The bill does require companies to delete this sensitive verification data immediately after checking it, but the extra step will become a routine part of your family's digital life.

What It Means for Your Business

At first glance, this looks like a headache strictly for tech giants like Epic Games or Meta, but the definition of a covered business is broad enough to catch local Colorado tech startups and mid-sized developers, too. If your company operates as a sole proprietorship, LLC, or corporation, generates the majority of its revenue from online services, and offers games or features reasonably likely to be accessed by minors, you are in the crosshairs. You will need to fundamentally overhaul how your platforms process data, defaulting all minor accounts to maximum privacy and disabling interface designs (often called "dark patterns") that encourage compulsive use.

The operational shifts required here are massive. If you run a platform that falls under the bill, by December 1, 2026, you must rebuild your payment gateways to list prices in U.S. dollars for minors and build the infrastructure to collect and remit the 5% add-on transaction fee to the State Treasurer. You also have to implement strict age assurance protocols to figure out who your minor users are, followed immediately by automated systems to delete that verification data so you aren't storing sensitive identity documents. Violating these rules isn't just a regulatory slap on the wrist; it constitutes a deceptive trade practice under Colorado law, opening you up to civil penalties of up to $20,000 per violation.

For businesses that don't build software but rely heavily on social media marketing—especially those in the hemp, wellness, or CBD space—pay attention to the algorithmic restrictions. Social media platforms will be legally barred from using their recommendation engines to show illicit substances to minors, and the bill explicitly includes certain hemp products (like those with specific CBD-to-THC ratios) in that definition. While you shouldn't be marketing those to minors anyway, platforms are going to severely tighten their algorithmic filters to avoid liability. Expect broader shadow-bans or stricter content review processes for any marketing related to hemp, supplements, or age-restricted products as platforms over-correct to stay compliant.

Follow the Money

This bill is a significant revenue generator for the state, entirely driven by the 5% fee on video game microtransactions. According to the fiscal note, Colorado expects to pull in up to $20 million in its first year, growing to roughly $22.8 million annually by FY 2027-28. Every dollar of this fee revenue is earmarked for the State Public School Fund, meaning digital game purchases will become a dedicated funding stream for K-12 education. Because these fees are subject to TABOR, they will count against the state's overall revenue cap, potentially impacting future taxpayer refunds.

On the expense side, the state will spend roughly $146,000 in the first year to get this program off the ground. The Treasury Department needs to hire a full-time accountant and spend about $45,000 on custom IT programming to build out an accounting system capable of accepting and tracking these new microtransaction fees from tech companies. The Attorney General's office and the state's court system will also absorb some new, ongoing workload to draft rules, field consumer complaints, and pursue enforcement actions against companies that fail to comply with the privacy mandates.

Where This Bill Stands

HB26-1148 is currently Dead. The latest official action came on 04/07/2026: House Committee on Judiciary Postpone Indefinitely.

That means the bill is no longer advancing this session. In practice, measures that are postponed indefinitely or otherwise declared lost generally stay dead unless they are reintroduced in a future session.