Paddy Power has been rapped by the Advertising Standards Authority for its Oscar Pistorius trial betting advert offering "money off if he walks" away from killing girlfriend Reeva Steenkamp.
The Irish bookmaker's ad became the most complained-about UK advert of all time two weeks ago when it drew a record 5,525 complaints.
Now the regulator has ruled it brought advertising into disrepute.
It appeared once in The Sun on Sunday, showing an image similar to an Oscar statuette with the face of Pistorius, next to text stating: "It's Oscar Time. Money back if he walks. We will refund all losing bets on the Oscar Pistorius trial if he is found not guilty."
The ad sparked fury on the opening day of Oscar Pistorius's murder trial. Growing protests, including a petition on Change.org, branded it as "sick" and produced calls for any money raised so far to be donated to groups which tackle violence against women.
The Advertising Standards Authority (ASA) took the unusual step of ordering that the ad be immediately withdrawn while it investigated the complaints that it trivialised the issues surrounding a murder trial, the death of a woman and also disability.
Others complained that the ad was likely to cause serious or widespread offence and the ASA challenged whether it brought advertising into disrepute.
Paddy Power said that in the context of the high level of media coverage of the trial, it was "unsurprising" that complaints had been received.
However, it "strongly believed" that offering a market on a leading news story did not trivialise the issues surrounding the murder trial, death or disability.
It said the ad was a reflection of public interest, which was perhaps led by the media, and was not a commentary on death, violence or disability.
And while it accepted that there was a double meaning to "if he walks", it did not go so far as to cause serious or widespread offence, but instead was an inoffensive and relevant play on words - adding that the company supported several sporting events that involved disabled athletes.
The Sun on Sunday said it had taken the decision to publish the ad in good faith and did not intend to cause offence to readers, but regretted that offence had been caused.
It said it would ensure the concerns raised were taken into account in relevant future decisions.
The ASA acknowledged that the ad made no explicit reference to death or violence.
But advertising rules stated that references to anyone who was dead must be handled with particular care, saying the ad was likely to be interpreted as making light of the issues surrounding the trial, which included the death of a woman who had been shot by her boyfriend.
It also considered that the text "money back if he walks" and the refund offer was likely to be seen as making light of the serious decision-making process involved in the trial, while references to Pistorius's disability were also likely to cause serious or widespread offence.
The ASA said: "We acknowledged that the ad had appeared in the context of a high profile murder trial that had received extensive media coverage and was of interest to the public.
"We considered it would therefore have been reasonable to foresee that serious or widespread offence was likely to be caused by placing an ad that sought commercial advantage based on that trial and which made light of the sensitive issues involved.
"Given the content of the ad, and the prevailing circumstances at the time of its publication, we concluded that it brought advertising into disrepute."
The ASA ruled that the ad must not appear again in its current form, adding: "We told Paddy Power to ensure their future ads did not cause serious or widespread offence and did not bring advertising into disrepute."