Latin American News Round-Up

Congressman Proposes Charging Entrance Fees to Casinos
Argentine Congressman Fabián Peralta has called for plans to introduce entrance fees to casinos in order to prevent addiction to gambling. The legislator, who presides over the Committee of Addiction Prevention and Narcotics Control in the Lower House, has for some time been extremely critical of the gaming sector in Argentina, especially in his home province of Rosario.

According to the proposed law, customers visiting casinos would have to pay an entrance fee, which would amount to the equivalent of the minimum bet possible on a roulette table. If the gambling establishment does not offer roulette to its customers, then the minimum entrance fee would be 50 times the minimum bet on a slot machine. Customers would also be charged to enter racetracks and bingo halls.

Peralta explained: “We believe that given the growing proliferation of casinos and bingos in our country, many of which are located in sumptuous hotel complexes which offer services for all the family … it has become necessary to implement urgent measures to protect the health of an addict and that of his family, as well as those closest to them.”
In the text of the proposal, casinos would also have to set aside a percentage of their annual income in order to fund government projects to combat gambling addiction. Peralta is also actively lobbying the government to ban the use of credit cards in casinos and bingo halls and has proposed that casinos by law would have to put up signs warning of the dangers of gambling addiction.

Ex-Head of Gaming Regulatory Body Arrested
In Colombia, the tax income generated from casinos and gaming parlors all goes to the health sector, and casinos and slot parlors are controlled and regulated by a company called ETESA (The Empresa Territorial para Salud). ETESA was granted extra powers in 2008 to inspect and close down slot parlors and casinos that were found to be operating without a license.

After a number of high-profile crackdowns and seizures of illegal slot machines, ETESA seemed to be creating a more stable gaming environment and began to collect record tax revenue for Colombia’s stricken health sector. With around 300 casinos and 3,000 slot parlors nationwide, gaming in Colombia has been on the increase for some time now. It looked as if its gaming sector was set to continue to improve within this regulatory framework.

However, ETESA has been rocked by a series of stories that began to emerge in late 2009 in local daily newspaper El Tiempo. The articles, which were backed up by over 1,200 hours of tape recordings, reported that members of ETESA were regularly receiving bribes from illegal casino owners in return for looking the other way.

Several high-profile arrests were made, and the scandal deepened when, in January, the newspaper also claimed that Congressmen were receiving large amounts of cash in return for providing illegal casino owners with permits to operate. Then the president of Colombia, Álvaro Uribe, had no choice but to disband the organization and formally announced its dissolving in January of this year.

The corruption scandal is ongoing and the arrests have continued, the latest being that of the ex-head of ETESA, Mery Luz Londoño and her husband, Raúl Quintana.

The pair were arrested in September and face charges from the prosecutor’s office of taking money that was destined for the health fund, taking bribes from slot parlor owners and even forcing members of ETESA to give them money so they would not be fired. Both have been declared “a danger to Colombian society” and, as such, are both currently in jail while they await trial.

Costa Rica
New Gaming Law Flounders
As reported last month, part of Costa Rican President Laura Chinchilla’s election platform was raising tax on gaming in order to combat rising crime. The bill no. 17.551 seeks to raise taxes on casinos from 3 percent to 15 percent on gross income per year and seeks to raise between U.S. $30 and U.S. $40 million annually.

The law is already being criticized by opposition parties, the Partido Unidad Social Cristiana (The United Christian Social Party) and the Partido Acción Ciudadana (The Party for Citizen Action), and is fast losing ground in the Congress.

A particularly vociferous critic has been the ex-vice president of Costa Rica, Congressman Luis Fishman, who has been particularly outspoken because the legislation as it currently stands allows for free-standing slot parlors and casinos outside of hotels. In terms set out in current legislation, gaming establishments can only be attached to hotels, and Fishman has warned that the new law is unclear and would lead to an unacceptable proliferation of gaming.

Ex-Treasury Minister Guillermo Zúñiga, who is a member of Chinchilla’s party, has also expressed his doubts about the current legislation. Zúñiga has reiterated his concerns over the fact that in its present form it will be the Ministry of Government and not the Treasury Department that will be responsible for collecting the taxation from the casinos. He has also announced that under current proposals it will be difficult to raise the predicted tax revenue.

Casino Law Could be Modified for Cruise Ships
Legislators in Chile are considering making an important amendment to Chile’s casino law (Ley N°19.995). The law, which was passed in January 2005, allowed for the construction of 18 additional large-scale casinos, but it also made it illegal for casinos on cruise ships to open their doors to their passengers while either docked in Chilean ports or while sailing in Chilean waters.

Plans to amend this have been put forward by the sub-secretary for regional development, coming after it was revealed that the number of cruise ships arriving in Chile has dropped dramatically ever since Chile imposed the ban on casinos on cruise ships back in 2005.
Sen. Francisco Chahuán, a member of the Renovación Nacional party (the National Renewal Party), has expressed his concern over the fall in the number of cruise ships docking in Chile’s harbors and has come out in support of the proposal. The senator has argued that the ban on casinos in cruise ships has had a knock-on effect on the local economy as it has significantly reduced tourist numbers visiting Chile.

According to Chahuán, current estimates indicate that in 2011, 155 cruise ships will arrive in Chile compared to 228 in 2009. That accounts for 20,000 fewer passengers compared to the years before the ban.

The lifting of the ban will not be welcomed by casinos already operating in coastal resorts in Chile. According to Chahuán’s proposals, the law could be modified along with another amendment that would grant Chile’s older casinos (the majority of which are located in resort towns) a 20-year extension of their licenses.

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