Latin American News Round-Up

Court Rules that Casinos Located in Buenos Aires Come Under City Control
In a historic decision, Argentina’s highest court has ruled that the floating casinos docked in the city harbor and the racino located in Palermo come under the jurisdiction of the city government, not the state. Legally speaking, casinos are banned in Argentina’s capital. Nonetheless, there are three large-scale casinos in Buenos Aires.

The largest casino in Buenos Aires is located beneath one of the most famous landmarks in the city—the Palermo racetrack. The other two are boats moored permanently to the city harbor. As the casinos occupied national territory, i.e., the River Plate, and not the city’s boundaries, the federal government argued that they were legally entitled to run games of chance and that the federal government should reap the tax. The racino in Palermo has been allowed to operate since 2003 via the National Lottery Commission, which granted the Palermo racetrack the right to house slot machines.

Until now, the city government’s attempts to collect additional tax revenue from gaming have been unsuccessful, as court rulings stated that casinos come under federal, not city jurisdiction. However, Argentina’s Supreme Court has ruled that the operations come under jurisdiction of the city government, and as such, owe the city government 12 years in back taxes. According to officials from the city tax collection agency, it will take inspectors at least six months to calculate the exact sum owed to them. Local media sources report that tax inspectors have already been in touch with the casinos’ owners in order to begin their inspections. It is believed that each of the 5,600 slot machines in the racetrack and floating casinos earn in profit around $300 per day. Consequently, the casinos combined could owe around $50 million a year in back taxes.

Regional Lottery Sectors Call for More Transparency and State Control
Heads of the leading state lotteries in South America have joined together to push for more transparency and control over online gambling and sports betting. The announcement was made by the regional organization for lotteries in South America, El Corporación Iberoamericana de Loterías y Apuestas del Estado (CIBELAE) at its 13th annual conference this year in Rio de Janeiro.

The call for transparency and more control was issued as part of the so-called “Rio de Janeiro Declaration,” which emphasized the need for governments in the region “to provide its citizens with a gambling industry that is both ordered and transparent and safeguards the protection of the participants.” And the announcement came in the wake of the Argentine National Lottery decision in September to strive to work more closely with other national lotteries and CIBELAE in order to formulate a homogenous cross-border policy when it comes to gaming. The declaration also urged governments in the region to adopt a modern policy in regards to new gambling technologies such as online gaming which, according to CIBELAE, should be controlled and undertaken exclusively by the state.

The vice president of CIBELAE also made an important announcement regarding the future of sports and online betting in the region. Speaking at the conference, current vice president of CIBELAE and current head of the Mexican National Lottery, Benjamín Gonzalez Roaro, said that it was up to local governments to regulate online gambling and sports betting in order to provide funds for social welfare programs. In order to combat money laundering and terrorism, Roaro said that it was essential for the state to enforce its regulatory role in the “gaming sector in all of its aspects.”

Reforms on the Way in Wake of Massacre
Major reforms in the Mexican casino industry look increasingly likely in the aftermath of the attack on the Casino Royale. The attack, which took place in the state of Nuevo Lyon in August and left 52 people dead, has not only led to calls for changes to the granting of licenses, but has prompted demands for major reform both on a local and national level.

In the state of Nuevo Lyon, local lawmakers are currently drafting a bill that will prevent the granting of anymore licenses in the state, while those casinos already operating under a license will be subject to much closer government scrutiny. The state government is also seeking to have current gaming legislation revised so that licenses granted by the central government will also have to be sanctioned first by the state where the casino is located.

Calls for changes to the outdated Betting and Raffles Law of 1947 are also being echoed by local politicians in neighboring states, while other proposed reforms are being put forward nationwide. The latest proposal has been made by the mayor of Monterrey, Fernando Larrazaba, where the attack took place. After it was announced that all casinos in the city will be closed down, Larrazaba proposed that casinos should be restricted to beach resorts such as Cancun and Acapulco. Larrazaba’s suggestions harken back to draft legislation dating back almost 10 years ago in Mexico, which would limit casinos to Las Vegas-type gaming in tourist hotspots in order to provide a further impetus to the tourist industry.

Meanwhile, the secretary of government (SEGOB), Mexico’s interior ministry, has announced that it will grant no more licenses and will focus on regulating the estimated 560 slot parlors currently operating legally. The ministry also announced that in the future, local state governments will have far more control over the granting of licenses in their respective territories. Criticism has been mounting within the government against the 1947 Betting and Raffles Law with increasing vocal calls for reform. Head of SEGOB, Francisco Blake Mora, told local press that it is now abundantly clear that the 1947 act was “completely out of touch with reality.”

Government Approves Online Monitoring of Gaming
The Peruvian gaming industry is becoming increasingly regulated in Peru, with the passing of a new act that allows the government to monitor all gambling transactions by a central government-controlled server. Minister for the Exterior and Tourism José Luis Silva Martinot has announced that the Council of Ministers has approved an amendment to the gaming act of 2007, which will be put before Congress for a vote.

According to statements released by Martinot, there are approximately 800 sites that have slot machines on the premises, and the new act seeks to formalize the information that the government receives from them. It is also hoped that tax income generated by slot machines will significantly increase, due to the setting up of a central server in real time.

By using an online server, the government will not only have immediate access to how much is being bet, but they will also know the number of bets made. This is the latest move in a long-running effort by the government to more closely regulate the market. The Peruvian gaming market has seen a dramatic transformation since 2007, when the Peruvian government initiated a wide-sweeping crackdown on illegal gaming. Since then, the gaming industry in Peru has changed from an industry where only 4 percent of slot parlors and casinos were registered with the government to an industry that is now 100 percent regulated by the government.

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