Latin American Round-Up

Senate Passes Major Reform to Stamp out Illegal Gambling
The Paraguayan Senate has approved a bill that seeks to put an end to illegal gambling. Under previous laws, only the Paraguayan gaming control board, El Comisión Nacional de Juegos de Azar (CONAJZAR), was entitled to investigate an illegal gaming center. Due to the small number of staff employed by the gaming control board, illegal gaming proliferated, largely unchecked.

The new law, which was first submitted to the Lower House in May, will allow citizens to report any illegal gambling activity directly, either to the police, the prosecutors office or CONAJZAR for investigation. Illegal gaming offenses have now been written into Paraguay’s criminal code and, as a result, those found guilty of running an illegal gaming establishment now face much stiffer fines and jail terms of up to five years. The law was passed unanimously by the Senate at the end of July.

In Paraguay, the gaming sector is relatively underdeveloped and small-scale compared to many of its neighbors, and illegal gambling is widespread. Over the last 10 years, illegal gaming parlors have sprung up all around the country. Slot parlors illegally running gaming tables—poker in particular—are becoming increasingly common, especially in the capital Asunción. According to CONAJZAR officials, the state is losing half of its annual gaming tax revenue due to the proliferation of illegal gaming.

It is hoped that once illegal gaming is stamped out, the gaming industry in Paraguay will start to develop on a much larger scale. Although the tender process for a number of new casinos has been fraught with difficulties and delays, it is believed that CONAJZAR will be offering a significant number of new licenses for large-scale casinos and resorts in the near future.

Second Attack on Casino in Monterrey
Masked gunmen have launched another terrifying attack on a casino located in the northern Mexican city of Monterrey. A group of seven armed men unleashed a hail of gunfire on one of the city’s biggest casinos—the Casino Revolución—on a Friday afternoon and then threw two grenades, one of which entered the casino. Luckily it failed to detonate and no one was hurt. This is the second time the casino has been a target for armed gangs. In April 2011, 200 people had to evacuate the premises when gunmen launched a similar attack.

This latest attack comes almost a year after a group of armed men attacked and then set fire to another casino located in an affluent part of the city—the Casino Royale. In one of the most violent episodes in Mexico’s growing drug wars, the attack left 52 people dead. It is believed that both casinos may have been targeted because their owners refused to pay protection money to gangs.

The attack on the Casino Royale has led Mexico’s Interior Ministry to keep a closer control over casinos in the region, especially since the fire exits in the Casino Royale were reportedly blocked at the time of the attack. A few days before the latest attack on the Casino Revolución, officials from the Ministry, along with police and military personnel, carried out three simultaneous on-site inspections to make sure that safety regulations were being met and that owners were following the terms set out in their licenses.

In light of this situation, local leaders are demanding that the government provide additional security to the casinos in the city or close them down altogether. This is because, despite the obvious dangers, the Casino Revolución remains open and much like most of the other casinos in the city, is still doing a reportedly brisk trade.

Governor of Buenos Aires Province Extends 14 Bingo Licenses
The governor of Buenos Aires, Daniel Scioli, has signed a decree that grants license extensions to 14 bingo licenses until 2027. Scioli signed the decree in order to raise revenue to meet the recent shortfall in cash for annual bonuses for state workers. Due to the deepening economic crisis now affecting the province, failure to deliver the bonus on time has led to two 48-hour strikes by state workers, effectively paralyzing the province. Despite being given 1 billion pesos (about $218 million) by the federal government, Scioli claimed that there was still a huge shortfall he needed to fill in order to pay salaries, and thus turned to the gaming industry to raise more revenue.

The decree ratifies the decision of the Provincial Lottery to extend the licenses of 14 bingo halls in the province. In all, the license fees will amount to 1.1 billion pesos (about $240 million). Initial tax revenue for licensing fees comes in the form of a payment of 600 million pesos (about $132 million), all payable before Aug. 3, with the remaining amount payable in installments.

Scioli’s decision to extend the licenses has been met with strong criticism from followers of President Cristina Fernández de Kirchner. Relations between the governor and the president have become increasingly strained of late, especially since Scioli announced that he would be standing for office in the presidential elections of 2015.

In the wake of the decree, pro-Kirchner officials put forward legislation that could nullify Scioli’s actions. Provincial Deputy Mario Caputo announced that he would seek to nationalize bingo halls and gaming in the state. Although there has been no official word, it is believed that the Kirchner administration supports this and could soon move to make all gaming operation in the province of Buenos Aires state-owned and state-run.

Chile and Peru
Gaming Boards Sign Agreement
The heads of the Chilean and Peruvian gaming control boards have both signed an agreement of mutual cooperation, after a delegation from Peru visited Chile to understand ways in which the Chilean gaming control board now controls and regulates the casino industry.

The delegation visited Chile to see how the industry has developed under the Chilean gaming control board since casinos were first permitted in 2005. The agreement called for more research to be carried out jointly, as well as the promotion of training and work exchange programs on special projects. During their stay, Peruvian officials also looked into how the Chilean gaming control board regulated and taxed casinos, calculated license fees and provided overall transparency for the industry.

The gaming industry in both Chile and Peru has seen vast improvement over the last eight years. In 2005, Act N° 19.995 gave the green light for 18 large-scale casinos in Chile and created an independent gaming commission called the Superintendencia de Casinos de Juego (SCJ). Since then, casinos have become increasingly popular as part of larger entertainment centers. According to the latest statistics released by the gaming control board, gross gaming income is now up by over 12 percent in the first six months of this year, compared to the same period in 2011.

The Peruvian gaming control board has also made significant headway in creating a more regulated market, and has transformed gaming—an industry that was almost completely unregulated before 2007—into one of the region’s bright spots with significant growth. Both sides have agreed to work closely in the future in order to further develop the industry and come up with ways to better regulate and tax gaming in their respective jurisdictions.

Leave a Comment