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summary 06
February
The London charm ICE 2018
14 38 In Colombia
Improvements in investments
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Entertainment in America Challenges of the gaming market
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Peruvian Gaming The regulation in the market
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Exclusive casinos The offer in Panama
Brazil´s Possibilities The legalization of gaming
64 Bets grow
Peruvian market
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Resorts and beach
Casinos in the Caribbean
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Cover SPECIAL LATIN AMERICA
LATIN AMERICA, A GREAT MARKET For a long time, CASINO Magazine has been focused on the information about the gaming market in Peru. Over time, the need of the market made the publication expand its contents beyond its territories. Production
MCA Publicaciones S.A.C. Calle Luis Mannarelli 181 Of. A 2do Piso Magdalena del Mar - Perú Teléf. (511) 264 4314 E-mail: info@revistacasinoperu.com Manager Director
María Victoria Cabrera I. mariavictoria@revistacasinoperu.com mariavictoria@mcapublicaciones.com.pe
The possibility of knowing different realities allowed the staff of this publishing house to gain a general outlook of the gaming sector in Latin America. With pleasure, we noticed that, at a macro level, the region arouses curiosity in local and foreign investors. Establishments in the countries of this region have similar characteristics and challenges. At the same time, governments try to reduce illegality in the sector and to update its regulations, so as to go hand in hand with the new technologies.
Administration
administración@mcapublicaciones.com.pe Marco Cabrera
Editorial Committee
Gustavo Pichilingue Hadassá Castillo Eder Guardamino
There are also differences that make them be unique. For example, while in some countries gaming rooms only work in the hotels, in others, in addition, there are establishments for slot machines. On this occasion, CASINO Magazine is pleased to present for Europe market a especial edition about Latin America, with all its strengths and weaknesses. The publication pretends to be some kind of a guide for those that want to know it in depth or make incursions in the gaming market in one of its countries.
Correction
Javier Ágreda Designers
Mayra Martinez Loza Korita Upiachihua Silvano Correspondent in Mexico
Kind regards,
Pamela Carrión Photography
Nasim Mubarak
Rapidity Communications Ltd Citybridge House 235-245 Goswell Road London EC1V 7JD © Reproduction in whole or in part is prohibited without the authorization of the publishing company. The signed articles are from responsibility of its authors, as well as the advertising designs of the contracting companies. Made the legal deposit in the National Library of Peru 2006 - 5723
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THE LONDON
CHARM
London Is one of the destinations of the Old Continent with the greatest presence in the tourist, financial and entertainment schedule of travelers. 6
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it counts with the largest metropolitan area of Europe, this city generates the 20% of the Gross Domestic Product (GDP), which makes it one of the main financial centers of the world. Since the middle of 2007, this development allowed 325 thousand people to be working on business and finances with 480 foreign banks. Tourism, on its part, contributes US$15 trillion in incomes from state coffers, while it offers 228 thousand jobs according to The World Travel & Tourism Council (WTTC).
According to The World Travel & Tourism Council, London, with Istanbul and Barcelona, will be consolidated as the destinations with the greatest tourist expense in Europe for the next years. In a report of this organization, London, with Istanbul and Barcelona, will be consolidated as the destinations with the greatest tourist expense in Europe for the next years. Its solid economy, cultural diversity and the broad range of attractions draw even demanding travelers, visionary investors and eccentric personalities that want to be part of the imaginary that was built in this insular corner of the first world.
A CITY OF TRADE SHOWS
O
n the shores of the Thames River, London closes a tiny world. This is something understandable if every year almost 30 million of tourists from different parts of the world walk around it, seduced by its sophisticated towns and modern suburbs with cosmopolitan essence.
In fact, it is possible to hear even 300 different languages in this metropolis with multiple nationalities and cultures. And, even though the geopolitical estrangement of the United Kingdom with the European Union (EU), which is called “Brexit�, slowly continues, the British capital city makes huge progresses. As
Maybe for all those reasons it is not a surprise that London can be able to congregate so many versatile and dynamic sectors. The presence of fairground enclosures to develop events of great magnitude like the Olympia Exhibition Centre, in Hammersmith Road; the prestigious Earls Court, in Warwick Road; the Excel London, in One Western Gateway Royal Victoria Dock; or the Business Design Centre, in Islington confirm this. While the new edition of ICE Totally Gaming is coming, the city had FEBRUARY 2018
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ExCeL (Exhibition Centre London) is an exhibitions and international convention centre in Custom House, London Borough of Newham.
celebrated the Olympia Horse Show, a trade show about equestrian sports equipment, the London Boat Show, an exhibition about nautical sports and engineering, and the EAG Expo, which is dedicated to the popular electronic games. On next January, the doors of Learning Technologies will be opened: an event about computer education and technology in educational institutions. On their part, the great investors participated on The British & International Franchise Exhibition, an event that is aimed at famous franchises and global trade marks, or the Global Custody Forum, an important forum about the latest trends for businesses. And, even, an exhibition about tourist trade shows, called The Telegraph Outdoor Adventure & Travel Show.
ACCOMPLISHED GOALS A quick look at ICE 2017 could easily confirm this premise. An independent auditing firm revealed an attendance of more than 30 thousand visitors that came from 151 different countries to the facilities of ExCel in London. This number exceeded the first expectations and it represented an increase of an 18% in relation to the previous edition. Foreigners represented the 66% (20 thousand attendants) of the total audience, and the most of them came from Malta (1478 visitors), Germany (1133), 8
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United States (921), Italy (853) and Spain (784). The development of the trade show´ space was also evident: there were 41 thousand square meters in 2017, when the net area in 2012 barely reached the 21 thousand square meters.
After official reports of this organization, 17 companies from United Kingdom, 13 from the island of Malta, 6 from United States participated on the last edition. “These numbers show the work and the commitment of all our interest groups and, above all, the exhibitors community of ICE, who contribute with energy, enthusiasm and creativity in each presentation”, said Kate Chambers, General Director at Clarion Events, the organizing firms of this meeting. Almost all the business world was present at this trade show.
THE GLOBAL ÉLITE After official reports of this organization, 17 companies from United
Kingdom, 13 from the island of Malta, 6 from United States participated on the last edition. The business variety included manufacturers, certifying authorities and operators from such exotic latitudes like Belize, British Virgin Islands, Curacao and Canada. Besides, ICE attracted some firms from the Old Continent like Cyprus, Spain, Serbia, Czech Republic, Poland, Russia, Slovenia, Moldavia, Switzerland, Sweden, Ukraine, Armenian, Estonia, Belgium, Bulgaria, France, Germany, Ireland, Israel, Italy and Lithuania. From Asia, the unstoppable sector of Hong Kong, China, Taiwan, Malaysia, Philippines and Cambodia arrived. Some exhibitor companies grabbed the situation to celebrate their annivaersary with members of the sector. It was the case of Gamesman (20 years), Suzo Happ (30 years), Bell-Fruit Group (40 years), PST (50 years) and Merkur Gaming (60 years).
UNITED MARKETS Thinking about this idea would not be so absurd. During the last years, the sectors of the region have reached a significant degree of financial strength, strategic development and legal maturity which were something unimaginable some decades ago. The new Chilean industry is one of the most laudable examples because of its planning, which is financially supervised and geographically profitable. Annually, the reports of the Superintendence of Casinos (SCJ) collects more than numbers in blue: it has integrated the reliable development of the gaming activities with the progress of the regions and the Chilean communes. Colombia and Uruguay closely follow this philosophy, allocating percentages for public health, education or sports with clearer procedures. Despite its federal regulation, Argentina is one of the most efficient markets of South America. However, this situation does not exempt it from certain internal problems (political and economic ones) which always come back even stronger since 2000. The Peruvian industry and its affinity for the automated control and management
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systems have outlined a totally regulated, reliable and attractive sector for entrepreneurs and users. Close to the Caribbean, Panama seduces travelers and investors with its offer. While the first ones look for entertainment in racetracks with slot machine rooms or hotels with live gaming tables, the others study the opportunity of managing businesses that go with the tourist flow, always protected by the legal security.
have invested on the development of a tool for the meeting planning, which was one of the most important requests from our exhibitors and which will be available this year”, she said. Under this competitive request, the renewed interface now offers the exhibitors the opportunity of exhibiting their brands and products through a friendlier way, with the possibility of contacting potential visitors, months before the trade show opens its doors. This is a direct im-
pact measure that shows the relevance of ICE in the gaming calendar. Furthermore, Clarion Events has announced the launch of ICE Africa for October 2018. “We will develop and organize a professional trade show of which Africa will be proud and in which we will show the same level of commitment as in ICE London”, said an enthusiastic Chambers about the first incursion of her brand outside London.
A BRIGHTER FUTURE While the gaming actors of Latin America analyze the advantages of participating in a trade show like the one in London, ICE Totally Gaming does not sleep. With confirmed dates (from February 6th to 8th) and more than 60 countries that will be present in its booths, ICE 2018 will display a comprehensive offer on 43.500 square meters of the traditional ExCel Conventions Center. For this edition, Chambers has confirmed the development of ICE VOX. In 2017, this successful platform gathered more than 100 opinion leaders that offered 70 hours of training about networking opportunities for the attendants. The ICE VOX 2018 will have two events that should not be missed: The eSports Conference (February 6th) and Blockchain (February 7th), which will be about virtual transactions without banking intermediaries. Among those who were present we can stand out Jim Allen, President at Hard Rock, Sarah Harrison, CEO at the Gaming Commission of United Kingdom, and Jodie Fullagar, Head of the Entertainment Department at the M&C Saatchi Sport & Entertainment. “The great B2B events like ICE provide a valuable opportunity to expand horizons and build new contacts”, said the Clarion Events´ Director.
NEW PROJECTS And, as to complete the success of this future edition, the organization has launched the new website: icetotallygaming.com. Besides presenting improvements on the browsing procedures and the access to the news, “we
THE INFINITE WALKS The British capital city has routes for all types of travelers. Due to its surroundings, you can discover the enclaves that have been declared as “Heritage of Humanity”, like the famous Tower of London —which once held the Crown Jewels— or Greenwich, a municipality that is crossed by the meridian that establishes the Coordinated Universal Time (UTC). Art lovers can choose among more than 3 thousand museums and galleries. With its 5 million of visits every year, the British Museum leads the list that includes, of course, the Madam Tussaud´s Wax Museum, the Tate Modern and the Tate Britain (with rooms that are dedicated to contemporary art), the Victoria and Albert Museum and the National Gallery. The bohemian London — which includes the cinemas, bars, clubs, theaters and restaurants— is in the West End, among places like Trafalgar Square, Hyde Park Corner or Piccadilly Circus. Some streets further, the Palace and the Abbey of Westminster distill the glamour of the coronations and weddings of the royalty next to the Royal Palace of Buckingham, the official residence of the Queen.
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The local gaming industry
ENTERTAINMENT IN AMERICA Strengths, opportunities and some of the challenges of the gaming market in the entire continent.
By José Miguel Chueca, General Director at JMC Gaming Consultants
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he entertainment industry is, in my opinion, the accurate expression to talk about betting and games of chance. And this is because, nowadays, casinos, as an individual offer, are not the business model nor the economic activity that will endure over time. It does not matter the size of the establishment, neither its location; the expected demand is focused in the concept of a comprehensive entertain-
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ment, a leisure place or a playground. In this way, every casino includes, to a greater or lesser extent, a supplementary offer for gaming: orchestras and assorted shows, buffets and drinks, and even integrated resorts. This development is not from nowadays, but it has made huge progresses in the last years because of the “threat” of the millennials and the Z Generation. So, how did the markets respond in the
American continent to this new paradigm? Depending on where we focus, the answer is different. United States, maybe the mecca of the regulation, it is certainly leading the way. The concept and the perception of authority in the northern country is very strong. It is not necessary to see it to respect the rules, because we know that this is about a strong and solid system, which we cannot avoid.
Foto: © Andrés Valle/Presidencia Perú
Nobody can take advantage of a business if it is not appropriately regulated first, which certainly favors an organized growth of the sectors. This is how, for example, live gaming, slot machines, sportsbetting and now, with a lot of efforts, the online gaming got their regulation. Curiously, and supporting what it was previously said, Las Vegas —one of the cities that is considered as a brand in the United States— did not have a professional football team, because the investors and the authorities could not be sure about the transparency that could be got, regarding the development of the games against the players´ bettings. However, in an environment like the one in the USA, this obstacle was defeated and, after a unanimous voting, the NFL included a team from Las Vegas in the 2018 season. ¿The result? A new stadium —a complete sport stadium— and the possibility of strongly increasing the internal tourism with local matches, which makes the increase of the expense and the benefit for the city. It means a winto-win wherever you look. This could be an ideal environment for many cases in which the growth is organized and controlled, having the respect for the authority, modernity and transparency on the existing and implemented rules as the basis; with the necessary consciousness about
In United States, it is not necessary to see the authority to respect the rules. The country counts with a strong and solid system. the multidisciplinary teams that “experience and feel” the activity, that like it and that are professionals in its different fields.
There is just one gaming room that is legally working in Bolivia. It is located in the city of La Paz.
Foto: © .happylowcost.com
“LAS VEGAS” MODEL
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Las Vegas counts with one of the best casino regulations of the entire region.
CENTRAL AMERICA AND THE CARIBBEAN However, we are in the middle of a similar regulated environment in the rest of the region. The main differences are the professional people and the experts that are necessary for an effective regulation and control. We cannot create experts by political appointments, not if they are not part of the industry. It is very important to have an open mind, the regulations´ flexibility and the political will towards the new technologies. In that line of thought, Central America and the Caribbean appear as the weakest regions. Even though the fact of being non-regulated markets, and even no-licensed ones, could be favorable from a certain point of view, this only ends on the proliferation of the rooms without order and control, going against the organized development of the industry. A separate remark should be made for Panama, the most organized and the most historical jurisdiction in the region, which has to fight against other types of problems. But regarding the gaming regulation, license and control is a regional example and a role model. It is true that it suffers the same that others, which is the obsolescence of the technical regulations; but it still finds the way to exercise a real authority over the industry. FEBRUARY 2018
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SOLID REGULATIONS In South America, Peru is the model, and not exactly for its modern regulations or their urgent implementation, but for the comprehensive procedure that they follow. Even though it would have got used to a practical and real environment long ago, forgetting about the “americanization� of certain technical requirements, it is true that the permission and registration process works. The deficit comes from the forensic audit, which is the necessary other side to warrant a clear and fair operation for the player, the entrepreneur and the State. And also the age of the regulations, which were created more than fifteen years ago and did not receive an appropriate modernization at the operational level. Chile is a jurisdiction where the greatest efforts to regulate the activity have been made. However, mistakes in the political calculation have caused the development of a huge parallel activity that, nowadays, is a real and serious problem. This is due to the lack of prediction on the reaction of those populations that were not benefitted with the tender of casinos.
COMPREHENSIVE BUSINESS We cannot forget that, as it was social and psychologically proved, gaming is something intrinsic to the human being. The need of risking and betting is not conditional on the social-economic or geopolitical level. So, if it is possible to play only in some regions, where you only have to go for that purpose, which means an amusement event for the foreign visitors and a social one for the local residents, what happens with the people that want to go to the casino but do not have the means or the time to set out on a journey? On the other side, a high favorable fact is that Chile is the first jurisdiction in the region where the concept of integrated resorts has been successfully applied. Every winning mega-project of the tender involves the full offer of entertainment that will be demanded in the future as a development alternative. 12
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In the region, only few nations legalized sportsbetting and online gaming. Antigua and Barbuda, Curazao and Colombia are an example of that.
COMPLEX MARKETS Colombia, for its part, as Argentina, is a semi-regulated market, with clear and well defined regulators, but with particular processes that go beyond the traditional ones. Not for this reason they stop being effective, but they are a little bit confusing.
so clear legal situation, in which the law indicates that the gaming tax is such that the operational cost exceeds the 100%, which makes any operation that pretends to be serious and formal be also impracticable. Unless some type of special court ruling can be obtained.
THE MAIN CHALLENGE
In South America, Peru is the model, and not exactly for its modern regulations, but for the comprehensive procedure that they follow. Particularly, this also happens in Argentina, a republic with a structure of strong provincial governments, where every one of them has the possibility of establishing their own regulations and requirements. This turns Argentina into many countries at the same time, as it happens in USA, which is potentially confusing if there is not a master regulatory line that can be followed at a national level. To finish with this general outlook, I would like to talk about Bolivia and Uruguay. The first one, which is lost in a not
Uruguay, for its part, is a state monopoly in which, in certain cases, the association with private operators is allowed. They are due to detailed situations that go beyond the budget capacity of the State for a direct implementation or operation. As you can see, our regions offer a varied outlook and with a lot of potential for the operation of amusement centers. The main obstacle is the regulatory security, which, in many cases, is missing and in others, restricted. It is a debt from all the regulatory bodies, except for EE. UU and Canada: to present the casinos as a formal, decent and efficiently controlled industry, in which corruption, money laundering and other crimes can only be memories from some movies, but not a reality. Socially, this business can be so accepted as any other. Population has to understand that this is about amusement options, like others can be, which do not incite or invite to the vice. That is a pending task.
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For Gaming in Colombia
The city of Bogota
NEW PLACES FOR INVESTMENTS
After some falls, the Colombian economy is on its way for getting recovered. Its tourist offer and its gaming industry promise to generate important incomes and to attract investments.
D
uring the last years, the economy in Colombia has been one of the most stable ones in the region, and many times it has exceeded the Latin American average growth. Even though the present has been affected by the fall in the international prices of oil, 14
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the phenomenon called “El Niño” and the currency´s devaluation, the responsible management of the Government has allowed the economy to continue on growing, even though in a smallest proportion. Its solid financial system, the expansion of the farming sector, the peace ac-
cord with the FARC and the reduction in the social gaps are just some of the strengths that Colombia has shown to design a better outlook for the future. Bettings and games of chance are part of the economic machinery of the country: they represent almost the 0.65%
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of the GDP. The activity does not only offer entertainment and generates jobs, but it also contributes with resources for the health of the Colombian people.
TOURISM AND GAMING It is globally known that Colombia is one of the best destinations due to its exceptional location, which is reflected in its natural areas: exotic beaches, mountains and jungles. The cities that gather the greatest number of rooms —Bogota, Medellin and Cali— are also the ones that receive important numbers of visitors.
The cities that gather the greatest number of rooms —Bogota, Medellin and Cali— are also the ones that receive more tourists. Coljuegos is the regulatory body and the administrator of this activity in the country, and its competence includes the “national games”, like the new ones (Baloto/Revancha, Súper Astro, the Deportivas and the games that are operated online), the localized games (casino tables, slot machines or MET, bingos, horse betting and virtual sports), the promotional ones and the national lotteries. For its part, the National Gaming Council (CNJSA), is in charge of the “territorial games” —like the lotteries, the Chance and the horse betting—, which depend on the departmental governments.
THE CURRENT NUMBERS In Colombia, more than $13.3 billion (US$4,389 million) are betted every year, according to Coljuegos. From the right of exploitation, $850,000 million (US$280.5 million) are redirected to the public health services, as well as the $750,000 million (US$247.5 million) from the value-added tax. During the first six months of 2017, $249.413 million (US$82.31 million) were obtained. As regards the tradi-
Agreements for the gaming´s legality The Colombian regulator started an intensive campaign to confront a famous enemy of the gaming industry: the illegality. In parallel, operations are being made in the entire country.
Juan B. Pérez Hidalgo, President at Coljuegos
A
greements for the legality are part of a great strategy of Coljuegos that is named “to play in a legal way is to bet on health” that tries to implement and promote a legitimacy culture in the gaming sector all over the national territory. This work is made through the interaction of the governments, the city halls, the National Police and the General Prosecuting Attorney. The strategy facilitates the protection of the State resources that are allocated for the health system, and contributes with the creation of a greater sense of belonging as regards the legal activities among the Colombian people.
THE FIRST ACTIONS Currently, the illegality phenomenon is still one of the main threats for the gaming sector because, in a good part of the national territory, there are establishments that still have machines
without the appropriate authorization of Coljuegos, or that carry out illegal betting activities. In this sense, the regulatory body has organized a great crusade against the illegality through the following actions: 1. Improving the efficiency and effectiveness in the control procedures. 2. Increasing the processes of the knowledge of the offence, with the support of the National Police and the General Prosecuting Attorney. 3. Making the citizens aware through a campaign, so they only bet in legal places. So far this year, four agreements for the legality has been signed with the departments of Valle del Cauca, Bolivar, Boyaca and Caldas, besides the Manizales city hall. And it will soon happen the same with the departments of Atlantico, La Guajira and Cundinamarca.
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tional games, incomes were increased from 2015 to 2016 in a 25%, the greatest growth in history. The most productive games and those with the best possibilities for investments in Colombia are the slot machines, casinos, bingos, the Chance, the lotteries and the Super Astro.
It is expected that, only during the first year, online gaming can generate $8,000 million (US$2.64 million). Other of the most popular modalities in the country is the Baloto which, since April, is ruled by a new regulation that tries to generate higher incomes, with which the authorities expect an increase of the 30% of the resources that they allocate for the healthcare sector. On the other side, this year it was published the resolution that defines the operation system of the MET that work in the establishments of which the commercial activity can be different to the games of chance, or the “slot machine route�. In this way, a new mar-
Above: In the top of the Nutibara hill, there is a replica of a traditional town in Antioquia, the Paisa, from where you can get a great view of Medellin.
The Salt Cathedral, which was built inside a salt mine in Zipaquira, Cundinamarca.
ket that tries to boost a different line of business for the sector is opened.
THE ONLINE REGULATION
The Lost City is an old town that is located in Sierra Nevada de Santa Maria.
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In 2016, Colombia became the first country in Latin America that regulated the online gaming. The regulation, which established a precedent in the region, allows to offer online poker, bingo, baccarat, black Jack, roulette and slots. And also, bets that are based on real events; sporting (soccer, tennis, golf, etc) and non-sporting ones (beauty contests, weather, and others). All of these contents can be offered in casinos, bars, bingos, hotels and related establishments.
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Wplay.co, which belongs to the operating company Aquila Global Group, was the first website that was authorized by the regulatory body. It is estimated that, this year, almost seven national and foreign companies would be able to start operating. “We have also started blocking websites. They are almost 80, from the 320 that we have identified as illegal websites. We want people to have legal platforms in which there is a guarantee that the prizes are going to be paid”, said Juan B. Pérez Hidalgo, president at Coljuegos, to the local media.
In Colombia, more than US$4,389 million are betted, and US$280.5 million are set aside for the public health system. This new market will provide the players with more security, and more incomes will be obtained for the healthcare sector. Only during the first year, it is expected that $8,000 million will be generated (US$2.64 million). In this way, Colombia presents itself as a destination that gathers all the requirements for the investors to develop their operations in a successful way and, above all, with stability.
THE SIZE OF THE MARKET
: 2,523 : 82,528 : 565
(bingo and keno included)
Legends
: rooms : slots : gaming tables Source: Coljuegos (updated information up to June 16th, 2017).
A solution before the previous concept The purpose that tries to finish with the requirement that has been issued by the city hall to ask for an authorization for the operation of localized games.
Evert Montero Cárdenas, President at Fecoljuegos
I
n the last years, the crisis in the localized games got exacerbated with the compliance of the “previous favorable concept”. The project about a regulatory chang that Coljuegos is proposing turns out to be a light in this difficult path that the entrepreneurs that have been operating for such a long time have to go through. This is also about a vital initiative for the new investors that are interested in being part of the sector with other localized games´ modalities.
POINTS IN FAVOR The project considers that, in the contracting process for the authorization, the “previous concept” or the “land use concept” could be adopted. In this way, it will be given, to the second option, the category of “equality” with respect to the first one, on the condition that this resource is issued by the competent officer. Currently, Coljuegos has inherited a wrong interpretation that gives a restrictive reaching to that regulation. In few words, without previously publicizing it among its recipients (operators and the town halls of the country). That unfortunate legacy that the current administration received has turned into a new requirement
that was unilaterally established by the regulator. This is not about being against the idea of the entity adopting a literal interpretation of what has been established in the legal system, but this change of interpretation had to be chosen and established in those years of the regulator´s presidency, as all the public administration´s decisions.
OBSTACLES TO THE CONTRACTS It was not taken into account that, during this year and the next one, a high percentage of the license contracts are being or will be renewed. This requirement is complicating, obstructing and, in some cases, preventing the operating authorizations. If we talk about the other existing and regulated localized games, as race and sportsbetting and route machines, the outlook results even worst. Currently, it was not possible to receive incomes from their operations, because this requirement is impracticable for them. It is very important to reiterate our labor-union support so that the regulation that we are reaching brings us definitive solutions to this matter, without only being a well written regulation, but inapplicable and ineffective for the gaming sector.
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For the game sector
CLEAR REGULATIONS IN PERU
The local market counts with one of the most solid and competitive regulations in the region. Currently, it is getting ready to legalize the iGaming market.
T
he Peruvian regulatory framework, which is famous at an international level, allowed the development of a highly competitive market. The legal certainty that it offers makes different in-
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ternational companies that are involved in the activity be interested in establishing and opening their offices in the national territory. Slot machines have a special process for their importation and
operation. The regulation also establishes the supervision system with which it regulates the activity through the General Direction of Casino Games and Slot Machines (DGJCMT).
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The information that is obtained is also sent to the National Superintendence of Customs and Tax Administration (SUNAT) and the Financial Intelligence Unit, which see the matters that are related to the tax collection and the detection of suspicious transactions —this last concept is part of its money laundering and terrorism financing prevention system—, respectively.
A STABLE MARKET Both entertainment areas have been working for a while. Casino rooms started their development before the 90´s, while slots at the beginning of that period. Currently, any of these two modalities can only work with a five-star restaurant or inside a three, four or five-star hotel, depending on the department it wants to operate. The 539 establishments that could not fulfill that requirement found shelter in the Territorial Organization Law. These spaces now comply with all the requirements and conditions of operation. All the illegal business that can appear in the Peruvian territory are closed immediately and their machines are broken. The same thing happens with the Chinese equipment and those for minors.
The opening of the first equipment room.
Lima has the higher number of establishments and gaming elements of the 24 departments of the country.
THE SIZE OF THE MARKET Number of rooms:
:18 : 732 : 316 Legends
: casinos : slot machines : tables
Source: DGJCMT (updated information up to June 2017).
The Mayor of San Borja making the first movement, in 1991.
THE MAIN NICHE The demand is basically local and, in the case of the slot machines, it is mostly formed by a female public. Lima has the higher number of establishments (401) and gaming elements (47,233 equipment and 295 tables) of the 24 departments of the country: more than the half of the total number, in both cases. In the city, slot machines businesses are distributed in 36 of the 43 districts that are part of it. Lima, San Juan de Lurigancho, Los Olivos, La Victoria and San Martin de Porres are the most popular districts and the ones with more slots. ON the other side, the places with more tables are in the most exclusive jurisdictions of the city: Miraflores (three), San Isidro, San Miguel and Magdalena del Mar (just one in every place). In the places that are next to Lima and the FEBRUARY 2018
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Casinos with the greatest demand are located in the most exclusive districts of the capital.
Constitutional Province of Callao you can only find slot machines rooms.
THE MAIN CONTRIBUTIONS Besides providing more than 45,000 direct and indirect jobs —according to the National Gaming Society, one of its main guilds—the activity complies with an annual gaming tax that is equal to a 12% of its net win. This tax collection has been always rising. According to the recent report of the Sunat, in 2016 it reached the US$90 million, which means a 7.36% increase in comparison with the revenues that have been registered a year before. The profits are distributed among the provincial and district city halls (a 30% for each one), the Peruvian Institute of Sports (10%), the Public Treasury (15%) and the Mincetur (15%) for their audit works. The authorities predict a greater collection —and, so, a greater contribution—, with the regulation of a new area: online gaming and sportsbetting. 20
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CHALLENGES OF THE INDUSTRY In reiterated interviews, the engineer Manuel San Román, General Director of Casino Games and Slot Machines, expressed the Peruvian Government´s interest in legalizing this activity. For that purpose, its direction is preparing a bill.
The Gaming tax collection has been always rising. In 2016, it reached the US$90 million. According to the proposal, the companies will be able to open establishments for sportsbetting, but not for online gaming —slot machines, poker, black jack, among others—; besides, they will have to have a ter-
minal server and a legal control in the national territory. With this measure, the State pretends to control, authorize and regulate that activity, as well as to verify the tax payment. But this is not the only challenge of the industry. Before the appearance of new products and gaming modalities, the regulator has seen the need of updating the regulation. The direction prepares, for example, a proposal to regulate the progressive systems called WAP or those that connect several rooms. In the same way, the Peruvian regulator expressed the need of making, at least in a long-term, a regulatory framework for other area that is making a strong entry into this sector: the ability games, which are headed by the hybrids of the slot machines with video games, in Las Vegas, and the eSports. For this purpose, claims San Román, it would be necessary that the Congress could give new authorizations to his direction.
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H
PAC-MAN FEVER
eadlining at ICE for Ainsworth will be PAC-MAN™ DYNAMIC EDITION. This title follows on the incredible success of PAC-MAN™ WILD EDITION, which has seen tremendous game performance in the Americas. The iconic PAC-MAN character is one of the most recognizable figures in arcade game history and was the basis for the most successful arcade game of all time. Now, PAC-MAN has chomped onto gaming floors on the A640® cabinet. PAC-MAN™ DYNAMIC EDITION adds even more of the fun that’s made PACMAN a global phenomenon with increased player interaction, thrilling bonus features and an enormous wheel that awards massive jackpots. Throughout the game PACMAN makes appearances offering players wilds and other fun ways to win. PAC-MAN™ WILD EDITION and PAC-MAN™ DYNAMIC EDITION are part of a strategic partnership between Ainsworth and BANDAI NAMCO Entertainment Inc.In addition to PAC-MAN, among the titles on display for the A640® will be the exciting new games Desert Dusk™ and Rio Riches™. Additionally, entirely new brands like Triple Challenge™ will debut at the show. These games take full advantage of the stunning A640®, which features optimal viewing on a 40-inch high-definition LCD game screen and an attractive design creating powerful game experiences with eye-catching game art. The cabinet comes standard with a touchscreen LCD button deck and a mechanical “bash button” to combine the ease of new technology with the excitement of traditional slot play. An optional 27-inch LCD topper will attract players across busy gaming floors.
BUILDING THE LIBRARY On the A600® cabinet line, trade show attendees will experience Hao Yun Dao, a new Asian-themed linked progressive series that stands out on gaming floors with customizable sign packages, two unique game experi-
Miguel Cuadros, president for Latin America of Ainsworth.
ences and world-class graphics. Several new brands can also be seen on the dual-screen A600® & A600® Slant Top, including Fire Power™, Fire Power Jackpots™, Big Hit Bonanza Jackpots™ and Raging Roosters Reloaded™. These game series offer new play mechanics and math models, along with improved sound and art packages, to take A600® content to the next level. The most popular Multi-Game brand from Ainsworth continues to evolve. More than 5 versions, from Multi Win 7 to Multi Win 15 will be displayed at ICE. Also, attendees will be able to experience Mega Choice Treasures™, Ainsworth’s new line of multi-games. Mega Choice Treasures™ takes the multi-game market segment to the next level with player-selectable options, such as: multi-line, multi-denomination, multiRTP and multi-language, all of which are integrated into a 2-level mystery progressive jackpot. Mega Choice Treasures™ offers an indispensable game package that encompasses many variations for all casinos.
Raging Roosters™ will make its comeback as Raging Roosters Reloaded™ in the A600® cabinet. Raging Roosters is considered the most successful Ainsworth game in Latin America and this newest version will undoubtedly assume its prestigious place in the venues across the region. The success of Raging Roosters Reloaded will be its exciting new game features and the inclusion of the AnyBet feature, which offers players the chance to win.
EXPONENTIAL GROWTH IN LATIN AMERICA Ainsworth recently reported financial results that show significant growth in Latin America. Progress in the sales area was very notable, as well as a strong improvement in the rental segment, positioning Ainsworth Latin America as one of the most important brands in the region. With a great portfolio of innovative and highly successful games and cabinets, Ainsworth is well positioned to provide a vast array of gaming solutions for the success of our customers. AUGUST 2017
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REGULATING THE INTERNET IN PERU A brief analysis about the legal situation of the betting and online gaming sector, and the benefits of their legalization. Carlos A. Fonseca Sarmiento, partner at Varela & Fonseca Abogados cfonseca@varelafonseca.com
O
nline betting games are divided into two classes: online games, when they are fully played on the internet (for example, the virtual cards games), and the games “with” internet, when they use the internet for the interaction between the operator and the user (for example, the sportsbetting). There are three conditions that are necessary for a game to be played on the internet: i) a remote access device, for example, a computer or a mobile phone, ii) a website where this device can be connected, and iii) a relation between the website´s operator and the player that has the device, which acts as a gaming contract, because the player bets and, depending on the game´s rules, the operator will pay the prize or the player will lose his bet. Currently, this is not a forbidden activity in Peru. We can offer it under the off shore (from abroad) or on shore modality (from Peru). They both have pros and cons. However, there is not a regulation and a specialized authority to issue the licenses and to supervise this activity. There is not also a specific taxation. It is necessary to establish an appropriate legal framework to generate tax resources, protection for the users, equal rules for all the suppliers, the creation of 22
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jobs and the attraction of foreign investment. A “win-win” formula.
SOME CONSIDERATIONS Under this purpose, the legal framework should consider, among others, the following aspects: 1. To take into account the four main plaintiffs of this industry: i) the operator, ii) the supplier of the software for the operator, iii) the laboratory that is in charge of verifying the technical requirements and iv) the player.
Currently, online betting games are not a forbidden activity in Peru. 2. The minimum technical requirements that the game´s system and the website should have, which should be verified by an international laboratory, as it currently happens in Peru with the slot machines. 3. A reasonable tax. This is a competition among the countries. The fee has to be attractive so the great international
operators can be interested in getting their gaming license from Peru. The international operator can continue operating from Malta, Alderney, etc; but if the tax is appropriate they can consider the centralization of their operations in Latin America from Peru, because for a long time, many countries of the region won´t have a regulation. The gaming license is the factor that makes the connection with the country to pay taxes.
THE MAIN BENEFITS On the other side, the approval of this law could benefit many sectors: — Advertising agencies. This activity is basically based on advertising; so, the advertising agencies, television channels, newspapers, etc, will be benefitted. — Professional soccer teams and élite athletes. Operators will try that their “brand” can be linked to soccer teams and famous athletes. — The payment processing companies. It is necessary to count with highly secure and specialized systems to receive the bets and to make the payment of the prizes. — The workers: call center operators, graphic designers, social network specialists and other activities that are related to the digital services, transfer price specialists, etc.
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AUGUST 2017
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SOUTH AMERICA Foto: Chile Travel
In South America
CHILE AND ITS GREAT GAMING COMPLEXES
The country counts with 17 multiservice establishments that are authorized by the regulator. The new challenge is to include the other seven that depend on the municipalities.
I
n Chile, you can find a complete and varied entertainment offer and, at the same time, comfort. In this country, great gaming complexes work, which are famous for counting with hotels, casinos and convention centers. The small 24
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slot machine rooms are not allowed. The demand is mostly local. According to the latest report about the casino industry, which was made by the Superintendence of Casinos (SCJ), a 60% of the clients that visit the amusement rooms are older
adults. However, to enter into the establishments, unlike other countries, there is a cost of entry. From the 347 communes that the country has, only 24 have gaming complexes, included the commercial casinos and those that depend on the
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LEADER OPERATORS The Chilean industry is leaded by two big companies. The Enjoy Group and Sun Dreams manage, approximately, the 80% of the market. To the competition, we must add the Marina Group, which got the authorization of the municipality of Chillán for the construction of a hotel, a convention center and a casino in the zone. Nicolás Imschenetzky, President of the group, said that the investment in the region is vital for the company, because
it will allow it to include two casinos of the Bio-Bio region, from the coast to the mountain range. With the creation of this establishment, it is planned to annually contribute with US$1.4 million for the municipality and the new region named Ñuble, which is located an hour and a quarter´s drive from the center of Bio-Bio.
MAIN OBJECTIVES One of the pending situations that Chile has is related to the regulation of the responsible gaming policy. Even Foto: Empresa Sun Dreams
municipalities, which are equal to the 30% of the market. The first ones are located in Calama, Antofagasta, Copiapó, Ovalle, Rinconada, San Antonio, Mostazal, Santa Cruz, Talca, Talcahuano, Los Ángeles, Temuco, Valdivia, Osorno, Castro, Coyhaique and Punta Arenas. The municipal rooms are in the jurisdictions of Natales, Puerto Varas, Pucón, Viña del Mar, Coquimbo, Iquique and Arica. In this last region, the investors can build more casinos or other projects as part of a policy that promotes the private investments so as to avoid the creation of extreme poverty situations.
The SCJ still has the pending situation of regulating the responsible gaming policy. The only procedure which it counts with is the one that is related to the selfopt-out contracts. The exterior of the Monticello complex, one of the biggest establishments of Sun Dreams.
The legal gaming industry started in January 2005 with the promulgation of the Law Nº 19.995, which establishes the authorization, operation, administration and inspection of casinos. Ten years later, the regulation was modified, and now it tries to integrate the seven municipal casinos to the regulatory framework of the SCJ. The basis determines the granting of permissions to those that present the better economic offer for the country and the municipalities. It is estimated an increase of a 46% in the government revenue, based on what has been established by the SCJ and the operators, and added to the tax of the activity of the 20% of their gross incomes. The funds will be distributed among the Government, the commune and the public treasury.
Foto: Chile Travel
THE LEGAL FRAMEWORK
The region offers different possibilities of entertainment.
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though there is not a regulation that establishes an order like this at a national level, the casinos are those that manage their own rules.
It is planned that the new casino in Chillán will annually contribute with US$1.4 million for the municipality and the new region named Ñuble.
A tender for the municipal casinos A brief analysis about the process, which has been paralyzed for several months, and its possible consequences. Rodrigo Gonzáles Ormazábal, partner at Proas Abogados
The SCJ plans to drive a study about the effects of compulsive gambling so as to apply a responsible gaming policy, which is a joint work that will be made with the National Service for the Prevention and Rehabilitation of Drug and Alcohol Use, and the Ministries of Health and Education. The only procedure with which it already counts with is the one that is related to the selfopt-out contracts.
THE SIZE OF THE MARKET
: 17 commmercial casinos 7 municipal casinos 2 under construction
: 13,901 : 704
(dice, cards and roulettes)
Legends
: casinos : slot machines : tables Source: SCJ (updated information up to February 2017).
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B
y mid-2016, the tender basis for the municipal casinos of Arica, Iquique, Coquimbo, Viña del Mar, Pucón, Puerto Varas and Puerto Natales were established. With the modifications in what was related to the way of applying for the operation permissions, in terms of the demanded conditions in every place of tender, the doors were opened for the establishment of the disproportionate requirements and expectations from the municipalities. This situation reduced the interest of the applicants because investing in these conditions is unviable, and it generated an important risk of lack of interest and participation in the process. However, what was expected to be a quick process by this time is still unresolved. The foundations were judicially demanded by several of those who were interested in applying, based on the fact that there were requests that were going beyond the law and the regulations that rule this matter.
PARALYZED PROCESS Well then, it has been more than a year since the tender process was started and it cannot
still get to be reactivated, even though when the Supreme Court of Justice resolved some of the constitutional resources that have been presented, without examining this situation in depth, and left an open door for the possibility of exercising new actions once the process is resumed. Apparently, which is more suitable in this stage is the possibility of modifying the law and starting to extend the current licenses for a prudent time, besides the legal action that could appear in the way as regards the current tender process, it is also judicially questioned the power of the Superintendence of Casinos to extend, by an administrative procedure, the licenses that expire on December 31st, 2017. In the case the court resolves that the superintendence does not have the power to extend the current licenses by an administrative resolution, on January 1st, 2018, the current licensees will not be able to work, so this would be a serious problem for the workers and the municipalities where the casinos that are tendered are located, causing considerable damages for these zones.
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Foto: © Henrik Dolle
Gaming in Argentina
The city of Buenos Aires
A MARKET WITH HUGE CHANGES An outlook of the entertainment industry in one of the countries with the biggest number of rooms and slot machines in the region.
A
rgentina stands out for being one of the biggest entertainment markets of the region. It has a great number of rooms, gaming elements —slot machines and casino tables (popularly known as “baizes”), among others— and a dense population with a strong gaming culture. Its reopening to the foreign trade has made the industry retake the flight. During its beginning, the activity was linked to the tourism. This situation changed in the 90´s, with the privatiza-
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tion of gaming, the appearance of the slot machines and, in consequence, the fast expansion of the rooms. The National State lost its participation and every province started to establish its own legislation to regulate the industry. Currently, there are 24 authorities —among lotteries, institutes and social funds— with this power, which belong to the capital of the country, the City of Buenos Aires (CABA) and the 23 provinces. However, sometimes there are policies that are approved for the entire
Argentinean territory, like the prohibition of greyhound races (which became effective last year).
A PLAYER TAX There is also a Reform of the Income Tax, which includes, among other measures, an increase from the 35% to the 41% of the Income Tax for operators, besides a tribute of a 2% for online bettings and a 0.75% for bettings in authorized games of chance. This policy was regulated by the col-
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Foto: © La Nueva
lecting authority at a national level in June. However, operators had to make the respective contributions from the fortnight of March. For this purpose, it was recommended the modification of the online management systems of the rooms that operate in the entire Argentinean territory, with the purpose of calculating what was collected. Suppliers of these platforms were urged to make those improvements. The other recommendation was related to calculate the money of the bets and the 0.95% tax.
The regulation against illegal gaming brought meetings and an increase in the operations against the illegal business. THE ILLEGAL MARKET The Reform of the Income Tax included a modification of the Penal Code that establishes strong penalties for the clandestine gaming. This brought meetings and an increase in the operations
za Above: Mendo its is famous for vineyards and , wines. In 2012 slot almost 5,000 e machines wer working in its territories. Below: one of g the two floatin to er Pu in os sin ca Madero.
Foto: © Bruna Tinoco
against the illegal business. The experience was almost similar in the rest of the country. In Cordoba, for example, the authority of the sector reported an increase in the official collection, due to the clandestine players started to visit the authorized places. “And, in other cases, some of these “bankers” (operators) have gone to the offices of the state company with the purpose of starting the procedures to get a legal agency”, said Raúl Costa, director and vice-president at the Lottery of Cordoba State Society, in a column that was published in El Diario.
REORGANIZATION
The neighborhood named La Boca, one of the main tourist attractions of the City of Buenos Aires.
In certain parts of Argentina casinos were also closing. In Mendoza, the administration has also been implementing this measure before the excess of rooms in its territory. This year, it closed two: the state casinos FEBRUARY 2018
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of Tunuyán and Tupungato, in a zone that is known as Valle de Uco. In the Province of Buenos Aires the authorities announced that they will not open more bingos and they will not authorize more slot machines, and the local lottery agencies will go through a reengineering process. These will be closed if it is discovered that they work in poor neighborhoods.
Only the Provinces of Misiones, San Luis, Entre Ríos, Neuquén, Río Negro, Chaco and Tucumán regulate the online gaming.
Progresses in Mendoza A recount of the measures that have been recently taken by the gaming regulator of the Province. Josefina Canale, President at the Provincial Institute of Games and Casinos of Mendoza (IPJyC)
Which is the scope of the Law against the Clandestine Gaming?
That is in addition to the transfer process of the gaming authority from the State to the CABA, which was official at the end of July. In this way, the authorities of the city assumed the control of the two floating casinos of Puerto Madero and the Racetrack of Palermo, in which there are also slot machines. Recently, it opened a supervision center to control their incomes.
We have a new national law (one of the few laws that has power in the entire Argentina) which fights against illegal gaming. It became effective on December and it suggests new penalties: it considers a prison sentence from three to six years for the organizer and not for the player. The idea is making the players come back to the legal gaming and those that administrate clandestine business, go to prison.
THE SIZE OF THE MARKET
In which way this policy has been driven?
: 415 : almost 80,000 : 1448 Legends
: rooms : slot machines : tables Source: ALEA (updated information up to July 2017).
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We are working to reduce illegality through conversations, among other things, and through trainings for public prosecutors, judges and the police. They really did not know about this regulation. The idea is to establish a joint work in which we can give the tools to know the regulation. We count with a 0-800 (a free telephone number) to make anonymous reports. We provide the police and the public prosecutors with the information so they can act.
How many private and public casinos does the Government of Mendoza plan to take?
This year, the license for five public casinos finally ended. So as to help the regional economies, we decided not to call for new tenders. So, we took eleven private and public casinos.
How many do you expect to collect this year? We do not have a financial relation with private casinos. We regulate them, but they directly pay to the province a tax of a, approximately, 21% of their gross incomes. We plan to collect, more or less, US$1 million every year with the other five casinos that are still open.
On the other side, what did you do to comply with the new national gaming tax? We understand that there are two ways of collecting it. On one hand, through a software that is previously installed in the machine. When the player introduces the bill, the equipment confirms the amount that he deposits minus the tax. As we did not have the time to develop the software, what we have done is, over the total bets, we make the discount. Then, the rest is payed to the operator, taxes and salaries are payed, etc. We thought that it was the most convenient way until the software is developed.
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AUGUST 2017
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NEW CASINOS FOR PARAGUAY
The city of Asuncion
The local market is getting ready to grant licenses for new rooms in four departments and to legalize the sportsbetting market.
P
araguay is one of the few countries of the region that allows all the betting and gaming modalities. Its more than 6.6 million of residents have access to the national lotteries, pools, casinos, bingos, horse racing betting and even cockfights. The first room was open during the 40´s, and the rest of the face-to-face modalities were legalized later. The 80´s and 90´s marked a milestone for the activity: there was a strong increase in the gaming rooms of the country. In the middle
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of this situation, it was born the National Gaming Commission (Conajzar), a body that depends on the Ministry of Finance, which regulates and administrates the local activity. In 2005, the Paraguayan Government strengthened the current laws to vigorously fight against illegal gaming. Many of the casinos that were operating at that moment were found clandestine and then, they were closed. From that time, there are only three establishments that are still working, and they are located
in Asunción —the Paraguayan capital—, Ciudad del Este and in San Bernandino. Currently, there is a strong policy against the clandestine entertainment market. “There is an expectation of a sentence that penalizes the informal businesses with even five years of prison. In this way, we are constantly developing operations with the public prosecutors and the Police in terms of finishing with the illegality”, said, to CASINO Magazine, Bladismir Arce, audit coordinator at Conajzar, on March.
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A BUSINESS MODEL The biggest operations are in the capital. Currently, the biggest room is the Casino of Asuncion, with 80 slot machines and 20 tables, approximately. The establishments that are located in the other provinces are smaller that than. Only a certain number of casinos is allowed in Paraguay. The Paraguayan State establishes the operation conditions and grants licenses for this spaces to local, private or foreign companies. Those who are interested must present, among other documents, a fixed fee proposal to the State. In the same way, and if their project is approved, these companies have to contribute with the 2% of their gross incomes to Conajzar. According to the official information, the tax collection has been very positive between 2014 and 2016. This last year, for example, the entity received more than 117,000 million of Guarani (more than US$21 million), a 9.41% increase regarding 2015.
NEW ESTABLISHMENTS Currently, the industry is facing big challenges. On one hand, the authorities are managing the installation of an online management system that connects all the slot machines that are working in the country. In the same way, a tender process for the new casinos in the departments of Amambay, Asunción, Central and Alto Paraná (where Ciudad del Este is) has been opened. These four establishments could bring important investments for in-
In the Carnaval Hotel Casino, slot machine rooms stay opened the 24 hours of the day and the casino tables, from 18:00 to 05:00 every day.
frastructure and the possibility of operating online games.
The Paraguayan State establishes the operation conditions and grants licenses to private, local and foreign companies. The room in Amambay was awarded this year, on March, to the firm Cerro Corá S.A. In that case, the tax that was negotiated was the 20% of their incomes and prizes; which, according
The Chinese Park is one of the emblematic places of Ciudad del Este.
to the plans that were made, supposes an average of 180 million of Guarani (US$32,400) per month during the five years of the contract. In the case of Alto Paraná, there was a series of problems due to the hotel and the casino were going to be built in the piece of land of the National Administration of Navigation and Ports. The opponents contended that the legislation forbids the sale of public entities´ lands. However, the tender process was recently approved by the State. The project received strong criticisms and there was even a neighboring protest that was organized against it.
PROJECTS IN MOTION By mid-June, during the recent edition of the international event Juegos Miami, Javier Balbuena, President at Conajzar, reported that the tender of the sportsbettings will be officially launched in the following months. If the respective resolution gets the approval, his entity could grant the only license for online and face-to-face operations. The authorities also presented a bill to establish a new percentage tax for the activity. “We consider that its implementation (the percentage tax) is more fair and equitable. The more collection that there will be, the more incomes will go for the State. So this is the new theme: to put the fixed tax aside and advance with the percentage one”, explained Bladismir Arce. FEBRUARY 2018
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Casinos in Uruguay
The city of Punta del Este
A MIXED BUSINESS MODEL
In this country, most of the rooms belong to the Uruguayan Government. Some of them are managed by its public servants; others, by private companies.
I
n Uruguay, there is a great fondness for classic games, like pool and lottery. They are followed by the most modern modalities: slot machines and table games, like poker, which is one of the most popular ones. In this regard, there are two types of establishments in the country: the most traditional ones, which function inside the hotels; and the amusement rooms, in which only roulettes and slot machines can be enjoyed. Except for the two establishments, all the authorized places belong to the 34
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Uruguayan Government and they are managed by the General Direction of Casinos (DGC), an executing unit of the Ministry of Economy; or they are administrated with the private sector, through a mixed operation system. In this last modality, the authorities call a public international tender for the construction of a four-star or more hotel. After building the room and equipping it with machines, the company signs a contract to operate the establishment for a period of
ten, fifteen, twenty or more years. It will also be in charge of the marketing area, cuisine and other services.
PUBLIC COMPANY The local authority of this sector is, at the same time, a public company. For this reason, it follows certain regulations of the central administration and it goes through a series of administrative controls that are exhaustive and strict. The entity is even under a supervision that includes default and significant periods.
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The purchase of the equipment is made through a public international tender that is controlled by the Ministry of Economy, the Court of Auditors —a body that is in charge of auditing the regularity of the accounts and the financial management of the public entities— and the Presidency. “During a tender, we buy 200 machines. Suppliers are going to be ten, eleven or eight. It depends on each product and if it is attractive or applicable to the Uruguayan market”, explained Javier Cha, General Director at State Casinos, during an interview for the local media, the Espectador Tv.
The purchase of the casino equipment is made through a public international tender.
Piriápolis, the city where it was opened a tender for a hotel that does not include a room. The authorities are thinking about changing it to another place.
PRIVATE BUSINESSES Most of the state casinos are focused on the local market, even though in some zones of the country the demand includes tourists. Inside that niche, we can find the Brazilians —the second group of visitors that comes the most to the country—, above all those people with high purchasing power, who find the rooms very attractive, because they are forbidden in their country. The possible opening of casinos in the South American Giant is seen as a threat for the local gaming and tourism sectors. The most affected ones will be the establishments that are located in the border area or in the tourist destinations where hundreds of Brazilians go. According to Cha, the impact would be felt by the two private casinos: the emblematic Hotel and Casino Conrad (in Punta del Este) and the Hotel and Casino Carrasco (Montevideo). The first one is operated by the Chilean Group Enjoy, which, on May, turned into its unique owner when it bought the 55% of the share of stocks
The International Park of the city of Rivera, which is shared by Uruguay and Brazil. In this zone, there is only one state casino working.
that belonged to the American Caesars Entertainment.
THE HISTORIC BUILDING The history of the Hotel and Casino Carrasco is different. The building, which dates from 1912, was, for a long time, an international role model of comfort and luxury because of its services, events and neoclassical and baroque
design. Years later, it would be abandoned and sent to tender to be remodeled and administrated. Carrasco Nobile S.A., the licensee that is composed of the Spanish transnational Codere and the Argentinean Gaming Group, reopened the establishment´s doors in 2012. This company would be in charge of the casino, while the French chain, Sofitel, of the accommodation. FEBRUARY 2018
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The room did not register the expected profits. For this reason, the Administration of Montevideo accepted to renegotiate the tax it was paying, from a fixed amount with other that changed according to its incomes, to just a variable one.
PROJECTS ON THE WAY Meanwhile, the Accountability Project is in the bicameral Parliament, which extends and fixes the conditions for the national budget of 2018. The package of measures, which was approved in a first instance, includes a rate of 3% over the total value of the tickets that have been sold by an authorized raffle or a similar process (pools, for example), and other tax of 5% to the prizes that are related to chance, horse racing and online gaming (if the bets are made from the Uruguayan territory and authorized spaces). The proposal also finds illegal the sportsbettings and other modalities that are offered from a distance, and gives power to the State to adopt the precautionary and penalizing corresponding measures: a blocked access to the websites that offer these services and the prohibition of commercial communication, sponsorship and advertising. Nowadays, the only company that administrates online gaming is Enjoy. Inside the Conrad Casino, visitors have access to an iPad that has titles of the supplying company Bally, only in a test
The Hotel and Casino Carrasco will have to pay, as a tax, a percentage of what it collects for the accommodation and gaming.
THE SIZE OF THE MARKET
: 30 state rooms
2 private rooms
:5 :2 Legends
: casinos : entertainment rooms : racetracks Note: The DGC also administrates the racetracks of Maroñas (a department of Montevideo) and Las Piedras (Canelones).
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The Conrad Casino has been venue of one of the most important poker tournaments of the world in several opportunities.
mode: you can enjoy several games, but you cannot bet nor win money.
CONTRIBUTIONS ON THE SOCIETY In general, casinos reported positive numbers. Conrad, for example, payed a total of US$70.6 million on September 2016, while Carrasco, US$15.2 million. For their part, the State rooms collected, approximately, US$204 million. The amounts are lower than other
years due to different reasons (some state rooms closed, for example). In this last case, profits go directly to the government. The Uruguayan sector also stands out for having an agreement with the Medical School of the Universidad de la República, for treating those people that choose to optout of the casinos. Currently, it counts with offices in Montevideo and Paisandú. Soon, there will be another one in Maldonado.
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AUGUST 2017
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The legalization of gaming
City of Rio de Janeiro
BRAZIL´S POSSIBILITIES
An outlook about the measures that are being processed to legalize the activity in the South American Giant.
B
razil is going through a complicated political and financial situation. In the middle of trials and investigations on civil servants for the Lava Jato case, the State has been driving different policies to reactivate the economy. In 2016, for example, the request for bids and privatization of certain public companies started. The package of measures includes the “exclusive instant lotteries” or Lotex, a product that, as others that are managed by the state bank Caixa
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Econômica Federal, is being commercialized all over the country. The lotteries — the federal and state ones (a property of the Government and the states that are part of the union, respectively) — are the only gaming modality that is allowed in Brazil. This is regulated, as other activities, by the Secretary of Economic Monitoring (SEAE in its acronym in Portuguese).
A NEW PRODUCT Regarding the Lotex, the basis is
still being evaluated. The Brazilian State plans to give the license to a company that counts with experience in the international market. In the same way, it has started to organize the activity and even to close the operation of products that do not work under the ticket modality and the amounts that are established by the law. The perspectives for the Lotex are quite optimistic. According to the licenses program of the Brazilian Government, almost R$2,200 million
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Foto: © Hebert Madeira/ Portal de Jornalismo IESB
(more than US$696 million) would enter to the Public Treasury by selling this product. “This will bring a series of actions from the private partner, like the creation of employment, the modernization of the lottery business in the country and, above all, an increase in the funds that are set aside for social programs”, explained Mansueto de Almeida, an Economic Monitoring secretary, during an interview for the news bulletin BNL Data.
A POTENTIAL MARKET The interest of the State that is related to regulate and legalize the gambling market of quota fixa —sportsbetting— is added to that tender, which has been reflected in the attendance of different civil servants to the trade shows and conferences of this industry.
The animal lotteries or Jogo do bicho move around US$3.7 billion and count with more points of sale than the legal lotteries.
The SEAE is preparing a bill to regulate the sportsbetting, which will be presented this year. The SEAE is preparing a bill for that, which, according to De Almeida, will be presented this year. The initiative replies the privatization and authorization procedures of the Lotex. However, it seeks to count with multiple operators. For now, the Ministry of Finance and Treasury continues on evaluating the market and, during its search of more resources, it has not dismissed this possibility. The legalization of sportsbetting is one of the most supported projects by the politicians and the population, due to its potential demand —207 million of potential players, if we take into account the total of number of residents— and the existing illegal market.
POSTPONED DISCUSSIONS The other modalities —like slot machines, table games, iGaming and, since 2004, the bingo— are still prohib-
It is possible that the Brazilian authorities legalize the sportsbetting before the casinos, because of the great fondness for sports.
ited. The debate around their legalization is a long-standing situation. In the bicameral Parliament of the Union there are two bills that try to regulate the entire gaming activity: the PL 442/19 of the ex-representative Renato Vianna and the PLS 186/14 of the senator Ciro Nogueira. They both were approved in the first instance. It only lacks a second voting in the plenary session of the chambers in which each bill is,
so these measures can be carried out. Due to the political crisis, the possibilities to get their approval in a short term seem to be limited.
FOCUSING ON CASINOS In the case of gaming rooms, the legalization counts with the support of the tourism entrepreneurs. “In my opinion, it would increase the competitiveness of the sector. When we give reaFEBRUARY 2018
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sons to the travelers to come, we just limit ourselves to the natural beauties, which are wonderful, but they cannot be our only offer”, explained Luiggi Rotunno, President, Director and CEO at the Brazilian Association of Resorts. According to the executive, the opening to gaming would attract important investments for the tourist complexes of the country. The initiatives are also supported by foreign entrepreneurs, because of their potential demand (the great number of residents and local and foreign tourists). Regarding gaming, there is an interest on driving a business model that is similar to the one in Singapore. Known as integrated resorts, these huge complexes include hotels, bars, restaurants, shopping centers and even theme parks, among other services.
FOREIGN INVESTORS During the latest years, important conferences and congresses have been made to inform the politicians and the involved sectors about the benefits of regulating gaming. At the same time, the authorities have received the visit of representatives from great foreign companies. That is the case of Sheldon Adelson, owner of Las Vegas Sands and entertainment complexes in Las Vegas, Macao and Singapore. During his meeting with the Brazilian politicians, the magnate
Foto: © lasmilmillas
SOUTH AMERICA
One of the Brazilian attractions is the high number of tourists. For example, the celebrations of the Carnival in Rio receive more than a million visitors.
In the bicameral Parliament of Brazil there are two bills that try to regulate the entire gaming activity. expressed his interest in investing on constructing great entertainment centers in Sao Paulo and Rio de Janeiro, on the condition that there will be a clear and serious legislation. There is also an interest from the Caesars Entertainment Group that is related to
open integrated resorts in both cities and Salvador de Bahia. According to Jan Jones, its Vice-President of Governmental Relations and Corporate Responibility, there will be an investment between US$1,000 million and US$5,000 million, and also several jobs before and after the construction.
A HARD COMPETITION “During the construction, we talk about, more or less, 2,000 to 4,000 jobs. When the place starts to work, the hospitality services, food, marketing and management, among others, will demand almost 3,000 direct jobs and 5,000 indirect ones. Besides, all the economy around the food, furniture, products and cleaning services suppliers move, every year, between US$100 and US$200 million”, explained the executive during an interview for Forbes Magazine. But they are not the only ones. Companies like MGM Resorts International (USA), Estoril Group (Portugal) and a state operating company from Austria also expressed their interest. Regarding the manufacturers, some of them have started to establish their offices inside the country, so as to be the first ones to offer their products, as soon as the market is opened. Sao Paulo is one of the destinations that attracts gaming investors the most, also with Rio de Janeiro.
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CENTRAL AMERICA
Panama
The city of Panama
MODERNITY AND ENTERTAINMENT
A country with a tropical weather and where the tourist offers mixes leisure and pleasure with its beautiful landscapes, idyllic beaches and exclusive casinos.
P
anama stands out for its geographic location, natural wealth —which attracts thousands of tourists— and its foreign trade. Its good air connectivity —there are routes with more than 90 destinations—, its impressive cannel, its banking history and its three free trade zones result at-
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tractive for the foreign entrepreneurs: potential clients for the hotels and the gaming rooms. In the country, raffles, transitional games —roulettes, choclo, alto y bajo, pinta—, transitional bingos, slot machine rooms, complete casinos and sportsbetting agencies are allowed,
among others. The Gaming Control Board (JCJ) is the institution that is in charge of controlling, regulating, authorizing and auditing the activity, since 1947. Even though the rooms work in hotels and casinos —which have “A type” machines— count with an online
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connection system, the pending task is related to those that are located on the streets: the “C type”. Operators expect that this year the interconnection among these equipments can start.
DISTINGUISHED ACTIONS In 2015 it was created the Administration for Supervision and Regulation of Non-Financial Subjects, which is in charge of supervising the nonfinancial obligated entities as regards the prevention of money laundering and terrorism financing. This entity is the responsible of offering the respective trainings for the casino operators. The administration also receives all the support and assistance for the regulator as regards the supervision.
The Central American country has new games in sight to attract a different public: the millennials. The actions that are directed to finish with illegality are another priority for the regulator. “When we receive some kind of complaint about the existence of rooms or other illegal operations, we
The International Airport of Tocumen, the main connection point of the country, has registered —during the last months of 2016— 5,900 weekly flights and 90 air connections to 34 nations of America and Europe.
Bocas del Toro is located in the Caribbean coast of Panama and it is considered as one of the best islander destinations in Central America. It counts with white sand and clear water beaches, besides an exotic forest that turns it into a real tropical paradise for the relax and adventure.
send it to our inspectors and make the corresponding raids”, explained Eric Ríos, general secretary at the JCJ. On the other side, some campaigns to encourage responsible gaming have been made in Panama. In this line, at the beginning of this year, the self-opt-out regulation for casinos was changed for the users that are addicted to gambling. In this new version, it is established a two-year validity of the opt-out, and the procedure in which the users with troubles will be able to sign themselves up to be easily identified at the entries. The cannel of Panama has contributed with the dynamism of the worldwide trade by cutting distances for the maritime transport. It has an approximate length of 80 km, between the Pacific and Atlantic oceans.
THE FUTURE OF GAMING The Central American country has new games in sight to attract a different FEBRUARY 2018
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public: the millennials. “The skill games and the eSports are more the present than the future. In Panama, we are trying to regulate them”, said Eric Ríos. Currently, there are operators that are asking for their participation in this new market, which is gaining access in the country and that tries to be the great driver of the sector. Some of them are thinking about new areas inside the casinos to use them as rooms for skill games. “This matter appeared as a need to increase, in some way, the returns of the operators and balance the impact of taxes”, the Panamanian regulator explained. The local amusement sector has been the most brilliant one of Central America in the last ten years. Its collection, however, fell in 2015, when it was added a new tax of the 5.5% of the bettings. For example, in the first six months of 2017 it was registered a fall of a 15%. Without taking into account what was collected by the Lotería Nacional de Beneficencia, the reports reached the US$935 million in this period. From the JCJ, it was pointed out that, despite the existence of this tax, applications for the opening of new casinos have been received, especially in the interior of the country, where the new investments are focused.
THE SIZE OF THE MARKET : 24 casinos : 29 “A class” slot machine rooms : 27 sportsbetting rooms : 1 bingo : 1 racetrack Source: MEF (updated information up to May 5th, 2017).
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Looking for new alternatives The actions that the Gaming Control Board (JCJ) is making before the gaming tax. Eric Ríos,
General Secretary at the JCJ
Operators point out that the decrease in the sector´s contributions are related to the gaming tax. Which is your point of view about that? They can be connected, but this is not strictly the only reason. Indeed, since the tax was implemented there was a decrease in the operators´ incomes. However, this has a direct impact on the JCJ´s collection. At a state level, this tax has generated, up to now, more than US$90 million. So, we are talking about a decrease of US$10 or US$15 million in a year or year and a half in the JCJ, versus the US$90 million that the tax generated. As State, we can say that the measure was positive for what the government was looking for.
What is being doing from your institution to avoid the sector from getting affected? We are not indifferent before the fact that the operators´ incomes have been decreased, so we show our support, because our function is making the industry be booming. In this sense, we are looking new alternatives for the operators so they can have other options, like the online gaming market.
As I pointed out, we are trying to reach the opening of this sector through the operators that are currently developing their activity in the country, so they can have an additional offer of gaming to offer their clients. For the moment, this is the most visible measure to increase the collection and the operators´ incomes.
However, not everybody has been harmed by this tax… Another point that is important to mention is that, since more than four months, the “A class” sector in Panama has been registering positive incomes. Even though since the 5.5% tax suffered a fall, it is currently reflecting an increase in its collection. This means that they have commercially reverted what was the reduction and have generated profits. For this reason, we cannot attribute the current situation of the industry only to the tax. This is also about how operators are commercially responding to that outlook. From that point of view, there will have to stand out the responses or the actions that the “A class” machine sector has taken.
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CENTRAL AMERICA
Gaming in Nicaragua
A DEVELOPING REGULATION
Most of the entertainment centers are located in the capital, and they have become the favorite places of tourists.
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n Nicaragua, games of chance existed since 1960, but they were forbidden between 1979 and 1991 by the Sandinista Government. The industry returned in 1996, with the arrival of a group of foreigners that decided to invest in the business and build modern casinos. As there was no specific law that regulated that activity, the National Police regulation was pursued. Later, the au46
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thorities would count with a specific legislation and different authorities, like the Nicaraguan Tourism Institute (Intur) and, currently, the Ministry of Finance and Public Credit (MHCP).
THE GAMING MARKET Along the entire territory there are almost 130 companies. Pharaohs is the most important chain of the country.
The biggest casino is located in the city of Masaya. It has 320 slot machines, 30 blackjack tables, dice, roulettes and poker games. It also counts with establishments in Managua (the capital city) and in the metropolis Bluefields, where there are not gaming tables. In Nicaragua there is not a defined public. There are some that arrive in the casino only to drink a beer or to dance.
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ADVANCES AND CONTRIBUTIONS To fight against the problem of money laundering is the biggest worry of the regulatory body. This year, the managing board of the Chamber of Authorized Gaming and Gambling Entrepreneurs (CEIJA) made an international forum with the purpose of informing the authorities about the challenges and difficulties of their activity. During the debate, it was accomplished the identification of warning signs against money laundering. For example, a client buying a certain number of tokens and changing them immediately without playing is sign that means that
Efforts of the sector Matters that are still pending in the gaming industry in Nicaragua.
Lic. Jonathan Chávez Lindo President at the CEIJA
Foto: © Bravo Multinational
Casinos became the favorite places for tourists. The greatest demand and offer of entertainment centers is in Managua. These establishments stand out for their additional services. For example, the Princess Casino offers live music and a weekly raffle all Fridays. The gaming space of the Hotel Barcelo Playa Montilimar has more than 107 slot machines, gaming tables and a bar for the weekends. Other casinos with a less number of equipments are the Marrueco and the Red Palace.
In Nicaragua, there are almost 130 companies. All of them offer a great variety of games.
his intention was not betting, but changing money for tokens to turn them into cash or checks. According to Jonathan Chávez, President at the CEIJA, the industry pays US$25 per slot machine every month to the General Direction of Incomes of the MHCP. It also contributes with the 2% of each purchase that exceeds the 1,000 Cordobas (US$33 dollars, approximately). On the other side, there is an Income Tax that only has to be paid if the annual incomes exceed the monthly contributions that
are made through the machine. In the same way, US$20 per machine are annually paid to the MHCP, besides the payments for the establishment license form. The autonomous city halls determine their own monthly taxes of the police certificates, one of the requirements to get the working permission. Games of chance in Nicaragua generate 13,000 direct Jobs and, approximately, 1,300 indirect ones. For its part, entrepreneurs make activities for the benefit of the population as part of their social responsibility policy.
Currently, the sector´s authority is the Ministry of Finance and Public Credit (MHCP). Which was your work as regards the previous entity, the Intur, that regulates the tourism?
With the emergence of the Law 793, it was created the Financial Analysis Unit (UAF), an institution that is in charge of preventing the money laundering and the terrorism financing. As it is a new entity, its public servants are experts in the regulation of the financial system, but with little experience in casinos. For that reason, their regulations are coherent with the financial activity, but not so much with the gaming industry. In 2016, the UAF dictated a resolution that used to match more or less with the sector. However, it would be better if the government, through its entities, could give us more resources to operate, because we do not have access to the risk centrals, we do not receive information that allows us to distinguish dangers that are beyond our rooms, we do not have accounts in the banks and the authorities do not do nothing in that regard.
In 2013, the authority started to be the MHCP, which had delays and difficulties to give answer to the operators´ processes. However, there is a huge effort for improving and implementing the law to avoid the illegal exploitation. It is important to point out that operators have been working with the authority for the facilitation of this process.
Which were the progresses as regards the money laundering prevention system for casinos and gaming rooms? Which are the improvements that you would add?
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NORTH AMERICA
In Mexico
The City of Mexico
A PROMISING MARKET
The gaming industry is waiting anxiously for the next approval of a new law that will strengthen and modernize the sector.
W
hen Donald Trump won the presidential elections in United States, Mexico was aware of the difficult year that was going to come. The foreign policy of the North American magnate, with other measures, warned about a strong impact for the neighboring country´s economy. However, seven months after Trump officially assumed, Mexico 48
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is growing in a greater rate than what was expected, and showing clear signs of strength in contrast to the beginning of the year. Against the odds, the Peso turned into the currency with the best performance in 2017, after its fall to the historic minimum during the previous days to the assumption of the North American governor. On the other side,
despite the uncertainty and volatility of the international context, the country bets on keeping the economic policies that have allowed it to count with a stable inflation. There is a sector that has showed a huge potential and that is the gaming one. The broad market that Mexico offers presents itself as a great opportunity for the arrival of new in-
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vestments. However, despite the sector generates 4,000 direct jobs and 140,000 of the indirect ones, there are still matters to work on.
Acapulco, one of the best summer destinations in Mexico.
A PENDING LAW With a great consensus at the end of 2014, the House of Representatives approved the bill of the Federal Law of Bettings and Raffles. Even though the initiative has not seen the light yet —it lacks the approval of the Senate—, operators expect that, after the presidential elections, clear regulations can be established. The current law has been effective in 1947, and that is the reason why it urges to adopt a new regulation that can be in line with the latest technological advances. In these moments, the General Direction of Games and Raffles of the Governmental Secretary is the regulatory body that is in charge of issuing the licenses for the operation of games and raffles, besides supervising and controlling the authorizations, and establishing the taxes for all the country. For this reason, there are regions along the Mexican territory — Nuevo León, Quintana Roo y Sinaloa, Kukulkán pyramid in Chichén
Itzá, the ancient Mayan city.
among other states— that have created new betting taxes or have closed gaming rooms. With the approval of the bill, it would be created the National Institute of Gaming, as a new authority with national power. Besides, the initiative will allow to regulate all the betting games and raffles, with the purpose of carrying them out in a responsible, safe and transparent way.
PRESENT AND FUTURE
The streets of Puebla are full of traditions, history and art.
If there is something to stand out of the “Trump effect” in the industry is that, during the first six months of the year, the visit of 2 million clients was received (a 40% more regarding the same period in 2016). “People is staying in Mexico and also in the casinos, (…) and we could FEBRUARY 2018
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reach the 4 million of visitors at the end of the year”, said Miguel Ángel Ochoa, President at the Association of Licensees, Entertainment Gambling & Gaming Industry Operators and Suppliers (Aieja) to the local media. On the other side, Mexico counts with a population that exceeds the 127 million of residents, more than 70 million of online users and 11 million of mobile phone contracts, which puts it among the ten countries with the best connections.
The “Trump” effect helped to receive, during the first six months of the year, the visit of 2 million clients in the casinos. In this context, the online gaming is also presented as a huge opportunity for investments. Even though the sector is authorized, the bill tries to give it new regulations and reorganize it for a normal operation in the market. There is a great expectation for the future of the Mexican gaming sector.
Gaming challenges in mexico AGEM analyzes the current gaming situation, its weaknesses and strengths, in a market that promises to be consolidated in the future. Carlos Carrión, President del Mexican Committee of the Association of Gaming Equipment Manufacturers (AGEM)
T
he main function of the Mexican Committee AGEM is properly representing the manufacturers in the country and opportunely informing our associates about the changes and situations that happen in this jurisdiction. During the last years, the participation of the manufacturers of the industry has been growing in a positive way, contributing with the authorities, licensees and gaming operators in an organized and efficient way.
DIFFICULTIES IN THE SECTOR THE SIZE OF THE MARKET
: 690 autorized rooms 319 in operation
: 90,000 Legends
: rooms : slot machines Source: Aieja (updated information up to March 1st, 2017).
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The worry that is currently among the manufacturers is the lack of approvals to open new rooms. In Mexico, there are many authorizations that were granted by the General Direction of Games and Raffles of the Governmental Secretary that still count with the possibility of opening new rooms. But the procedures became complicated and, in several cases, they are not resolved in a favorable way over time. In particular, we, the manufacturers, see ourselves affected by having allocated and installed equipment for those rooms, waiting for their approval and without the certainty about the possibility of starting operating them in a short term. The capital that was invested in these equipments is
stopped —and they have been already made and imported—, is very high, and this is affecting the finances in a direct and drastic way. Many companies had to reduce the number of employees for this type of situations, as they had assets that are not generating incomes to cover the operating costs. The lack of openings of new rooms is restricting the growth of sources of direct and indirect employment, as well as it also affects the collection of federal, state and municipal taxes in a direct way.
A BETTER FUTURE The gaming industry in Mexico is a reality and it contributes with the development of the country, in the same way that other entertainment and tourist sectors do. It is an industry with legal bases for a correct gaming regulation. Mexico is a country with a huge growing potential for this sector, and inhibiting the organized development is generating the emergence of illegal gaming rooms in some states of the Republic, where licensees and authorized operators cannot open their rooms and where there is a demand of gaming. This is directly affecting the industry and the society.
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THE CARIBBEAN
The Caribbean
GAMING IN THE CARIBBEAN
The islands that belong to this part of the region have accepted the gaming industry under different legal systems and as an ally of the tourism.
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uring the prohibition of gaming in the United States, tourists travelled the 144 kms that separated Cuba from Miami. Back then, the Caribbean island seduced travelers for its luxurious betting rooms and night life, without nobody that could indicate a different situation in the future, until January 1st in 1959. 52
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The assumption of Fidel Castro would mean the proscription of gaming: and inevitable episode in a story that have been sprinkled by progresses and prohibitions in the tropical region. The islander nation has reached six decades without the death of Castro and the pale rapprochement of Washington in 2015 could weaken this measure.
Far from the political ups and downs of the XX century, the industry knew how to reach other countries of the Caribbean neighborhood, and even with a better luck. Gaming has managed to consolidate itself in this new century thanks to the economic and tourist boost, and also with the technology and a greatest entertainment culture.
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LEGAL VARIETY According to Luis del Valle, a representative of Gaming Laboratories International (GLI) in Puerto Rico, this aspect is very important. “Thirty years ago, tourists used to travel to enjoy gaming. Now, however, more than the 85% of the players in all the Caribbean islands are local residents”, commented the expert to CASINO Magazine. With that, there is a legal and mixed mosaic in the region: regulated countries coexist with others that are not, and flexible legal systems with businesses that are available for foreign tourists. The Financial Action Task Force (FATF) has closely followed this process. This intergovernmental body, which was created by the G8 (an association that is formed of the eight most industrialized companies of the planet), observes and notifies the omissions and suggests corrective actions —establishing a Gaming Control Board or a Committee of Gaming Control and changes in its local legislation— in this sector. For that purpose, it makes regular audits in which the implementation of those measures is verified.
LEGAL COURSES
Casino — with 1,800 slot machines and 800 gaming tables—, which is located in Paradise Island, is one of the most visited establishments.
Before, tourists used to travel to play. Now, more than the 85% of the players in all the Caribbean islands are local. Even though there is a regulatory body, it will soon be established
a new committee to offset certain aspects about the money management. The countries that do not apply those actions would be put in a “grey list”. “They would be impeded to make commercial agreements with the biggest economies of the world”, explains Del Valle. This is the situation of Trinidad and Tobago, the non-regulated country that has more indications from the FATF. It is also the case of Barbados, where the casino games are not legal, but other modalities like the slot machines function —in restaurant chains like Lucky Horsehoe and Worthing—, lotteries and horse bettings, from the racetrack of Garrison Savannah function.
Foto: © xtns.org
Bahama reach to consolidate an industry that is destined to foreign tourists. To its insular beauty, it added a totally regulated market that counts with a diversified offer. The famous Atlantis
Saint John port, one of the two islands of the U.S. Virgin Islands with casinos.
The Paradise Island Resort, one of the most symbolic ones of the Caribbean. In its interior, it works the famous casino Atlantis, with more than 700 slot machines and 85 gaming tables.
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THE CARIBBEAN
THE REGULATION PROCESS In Aruba, home of the Caribbean Stud Poker, a popular type of poker, there is not a regulation, though it did not stop the advance of its gaming culture. In Alhambra, the most visited of its casino hotels, gaming tables offer Three Cards Poker, Black Jack, Dice, Double Draw Poker, Let It Ride, Mississippi Stud and Roullettes.
The business model is similar in all the islands: the rooms operate inside the resorts and hotels. In Antigua y Barbuda nobody regulates the mixed market. In its 280 square kilometers coexist the traditional casinos (land-based) and virtual ones, for the exclusive pleasure of the foreigners. While the San Martin island has, in the part that belongs to the Kingdom of Netherlands —the other part depends on the French government—, thirteen resorts which are visited by high rollers. However, there is not a regulator at sight. Identified by the FATF, these jurisdictions can go to the laboratories and certifying entities to rectify these requirements. “From GLI, people try that these countries can organize and establish a gaming commission. And the
THE SIZE OF THE MARKET :
20
: 10 (including the French part of San Martin) Total : 30 Legends : Countries with casinos : Countries without casinos Note: Countries or departments with territories in the American continent are not included.
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The Caribbean Stud Poker was born in 1968, in the Dutch island of Aruba. Nowadays, this department has eleven casinos that are open from midday to almost the sunrise.
basic knowledge is offered, so as the regulations against money laundering can be made”, claims Del Valle. A similar situation can be found in the territories that are part of what is called the Caribbean Netherlands — Bonaire, Sint Eustatius and Saba—, where there is a legislation, a regulation and an issuance of permissions that are approved by the Kingdom of Netherlands and the islander governments, but not a tax that charges the activity.
LEGAL MARKETS In two of the three territories that are part of the archipelago of the U.S. Virgin Islands —Saint Croix and Saint John— there are regulated gaming establishments, while in Curacao —one of the markets with the biggest openings in the Antilles— allows that foreigners and local residents bet on their landbased and online businesses.
Jamaica can be stood out in this circuit of formal competition. With a regulation that is effective since 2010, the Casino Gaming Commission of the Ministry of Finances and Public Services of this country shows a flexible role. “It is a regulator and also a facilitator, because it encourages the operators to invest, tries the games and then, subsequently, regulate them”, says the expert of GLI. Destinations like Puerto Rico and Dominican Republic can also be stood out, which are two of the biggest markets of this part of the world, where the activity is regulated since a long time ago. The business model is similar in all the islands: the slot machine rooms and casinos operate inside the resorts and hotels. A great part of the jurisdictions —departments or not— count with one or two casinos. Beach, restaurants and gaming. With this combination, who does not want to visit the Caribbean.
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THE CARIBBEAN
Antigua and Barbuda
AN OVERSEA DESTINATION
It is known for being the first country that legalized the gaming market and the online gaming. Even though it also stands out for its beach resorts with casinos and multiple services.
T
he traveler logbooks often talk about Antigua and Barbuda. Some of them chart ineffable routes of 365 beaches —one for each day of the year—, while others transmit the longing of “other times” if somebody gets lost among its buildings with red clay tiles, stony paths and its ivory facades. Probably, the 500,000 tourists that annually arrive in these two small islands of
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the Minor Antilles can decide about that. Since the arrival of Christopher Columbus in 1493 and the subsequent flood of people from Spain, France and England, this paradise has not stopped to receive travelers and adventurers from different parts of the world. Even though it is independent since 1981, the calm nation preserves a respectful bond with the British Crown.
Above this solid slope, Antigua and Barbuda has worked on an economy that is based on the experiential tourism and a diversified entertainment offer surrounded by white sands and Caribbean turquoise waters.
A GAMING CORNER As in the neighbor countries, the gaming industry of Antigua and Bar-
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The local casinos are authorized by the Ministry of Finances and Corporate Governance, and the operate in hotel complexes.
Besides receiving important cruise ships, Antigua and Barbuda has been positioned as a romantic destination. In its beaches, there are always a lot of marriage ceremonies. Foto: © kitesurfingmannar
buda emerged to encourage the tourist flow. The casinos that were authorized by the Ministry of Finances and Corporate Governance and operate from hotel complexes, preferentially for tourists. Currently, there are five in the capital city Saint John and one in Deep Bay. The government has been prudent with these establishments and it reached to establish a rate that is in accordance with the size of the business. The big hotels pay an annual license of US$300,000, while the smallest ones, US$100,000. The gaming tax is fixed in the 15% of the gaming profits. Even though the people from Antigua can bet in the casinos, it is forbidden the casinos´ advertising in the media. Besides, there are bingo rooms, horse betting from the racetracks and off-tracks (some decentralized points with televised races), a lottery and online sportsbetting.
Different water sports are developed in the beaches of Antigua and Barbuda. One of the most famous ones is kitesurfing.
A NEW TENDENCY In 1995, the two island nation took the leap with the appearance of the online gaming. Antigua and Barbuda would use the licenses for the first time and would establish a jurisprudence for a gaming modality that the most developed markets had avoid. Ironically, a great part of the business would come from U.S. travelers. In a short period of time, these operations were constituted as the second greatest employer source of the country: there were 93 companies, 1,900 employees and an attractive annual profit of US$7 billion. The “virtual” industry tried to expand itself beyond its borders without noticing the risks of that decision.
A GLOBAL CONTROVERSY Yet already in the new millenium, United States reached to refute the operations that were authorized by Antigua and Barbuda by exercising its right under the prohibition of online gaming towards these clients. The number of licenses drastically fell to 38 in 2002 and, a year later, in 2003, the 80% of the operators have already abandoned the island. This situation derived in an international trial. Before the World Trade Organization (WTO), Antingua and Barbuda alleged that the Interstate Horseracing Act of United States, said that online interstate games —in this
case, horsebetting— were legal and the operators from Antigua and Barbuda could promote them in its territory. In 2007, the WTO ruled in favor of the Antillean nation and ordered a compensation of US$21 million for each year of economic damage. United Sates appealed and, without solution aspects, rejected to comply with that judgement. After a decade, the North American debt exceeds the US$200 million. The arrival of Donald Trump could mark the end of this battle between David and Goliath. At least, that is what Sir Rodney Williams, the general governor of Antigua and Barbuda, thinks. FEBRUARY 2018
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Dominican Republic
LUXURY CASINOS
In the territory, there are 48 gaming establishments that operate inside the hotels and resorts. They all offer a good stay, comfort and entertainment to the public.
D
ominican Republic is the most visited destination of the Caribbean because of its beautiful beaches with clear and warm waters. In the region, there are big hotels and resorts that operate and offer a variety of games. Among the most popular ones are: three card poker, baccarat, blackjack, craps, mini baccarat, poker plus, roulettes, Texas Hold’em, and the Wheel of Fortune. In the entire country, there are 58
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48 casinos that are located in Santo Domingo (12), Santiago (5), Juan Dolio (1), Boca Chica (1), Samaná (2), Puerto Plata (6), La Romana (3) and Punta Cana (18). They all count with great gaming table and slot machine rooms. A complete service model can be found in the region. As they are inside tourist complexes, players have access to accommodation, pools, bars and restaurants.
A GREAT VARIETY In Punta Cana, one of the most important destinations of the country, you can find —for example— the Hard Rock Hotel & Casino. Besides its impressive room, it counts with fifteen pools, nine gourmet restaurants and environments with everything that is necessary for its guests to feel like a rock star. And the best part: it is only seven minutes away from one of the most exclusive beaches of the place.
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Other important tourist complexes with that same line of service are the Ocean World (Silver Port), the Jaragua Renaissance Hotel & Casino and the Hispaniola Hotel and Casino (both in Santo Domingo). The first one stands out for its huge amusement park, its popular lounge and discotheque Lighthouse —in which you can dance all night long—, and its varied offer of games and restaurants.
PROBLEMS The local amusement industry is going through two big challenges: the functioning of illegal slot machines and the regulation of the lotteries. The current legislation establishes that permissions will only be granted to rooms in which only adults can enter. The equipment that function in other establishments are going to be confiscated. The problem appeared in 2011 with promulgation of the Law 139, in which the lotteries and the sportsbettings were forbidden. Since then, there was an increase of this type of business. Nowadays, it is estimated that there are 100,000 illegal places. The Director of Casinos and Games of Chance (DCJA), Oscar Chalas, said that the institution plans to create a Project that helps to regulate the market. With that proposal, it is expected to collect the double amount of what has been generated by the gaming activity: US$880 million.
Punta Cana, the main tourist destination of the country, has big resorts with casinos.
Recently, the Executive Power promulgated the Law that fights against the money laundering and terrorism financing. A NEW LEGISLATION After an extensive debate, the Executive Power promulgated the Law 15517, which updated the current regulation that is related to the fight against money laundering and terrorism financing. This proposal includes, among other activities, the lotteries
and games of chance. In the same way, it establishes the following penalties: a minimum sentence of 10 years of prison, an economic penalty and a seizure of goods. For now, the ministries of Presidency and Finance, the Financial Analysis Unit of the Dominican Republic and the Center of Political Training and Management are offering trainings for the involved sectors. By this time, representatives from all the saving and credit cooperative partnerships, insurance companies and reinsurers, civil servants from the DCJA and representatives from the lottery and sport associations have participated, as well as members of the casinos that operate in the country.
The casino of Iberostar Dominicana is located in the lobby of the hotel and opens its doors during the sunset.
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LEISURE AND ADVENTURE IN PUERTO RICO Casinos appeared as a way of boosting the tourism in the island, which is privileged with a great variety of attractions.
W
hen many countries did not think about having casinos in their jurisdictions, Puerto Rico already counted with a regulated gaming industry. The initiative started in a context in which Cuba have been turned into the tourism mecca and, especially, the casino in the Caribbean. Since then, the Puerto Rican authorities decided to take a risk and open the first casino in 1948. Almost 25 years later, the Commonwealth of Puerto Rico already counted with twelve of these businesses. To enter in this gaming world, legislators took into account an 60
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important factor: the tourist competition. For that reason, the purpose of the Law 221 of May 15th, 1948, is to increase the offer of the tourist attractions so as to be more competitive in the market. Only the registered hotels, and with certain requirements, could get a license for a casino. Among those requirements are counting with at least 200 rooms, lobby, restaurant and a convention center.
THE ENGINE OF GROWTH Even though during the last years Puerto Rico did not have favorable
numbers in its economy, the tourism is the only sector that keeps its strength despite the crisis. Besides, it is an important source of employment creation: 11,200 direct jobs — between 2006 and 2015—, according to the research named “Tourism: the engine of the economic growth”, which was made by the expert Gustavo Vélez. Only the gaming industry generates annual incomes that are equal to US$264 million, which are allocated for the University of Puerto Rico, a special fund for the infrastruc-
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ture and another one for the restoration of the casinos. But the sector in Puerto Rico did not reach the consolidation from one day to the next. During all these years the legislation received multiple changes about the allowed games, the relevance and the operation of slot machines and the licensing, among other things. The relation between the tourist sector and the casinos is still current, apart from the fact that the 94% of the players are local residents.
Tourism is the only sector that kept its strength despite the crisis that the jurisdiction is going through. In the island, the Gaming Division of the Tourism Company is the only body that is in charge of auditing the operation of authorized gaming rooms. In 2014, it was confirmed that it had to be in charge of the supervision of the amusement machines for adults.
Above: a panoramic view of the walled city of San Juan, the capital of Puerto Rico. Right: The coastal paradise offers a variety of beaches for all tastes, in which you can camp, make water sports or even rest.
“It is a highly regulated industry. GLI (Gaming Laboratories International) has certified here almost the 95% of the machines that arrive in Puerto Rico�, confirmed Luis del Valle, a representative of GLI.
NEXT PROGRESSES
The traditional colorful streets of the Old San Juan.
Puerto Rico is in the initial analysis stage for the regulation of online gaming. The authorities are studying and observing the trends of the current markets, their regulation and the capacity of the current audits. In respect of the new gaming trends, like electronic or skill games, the regulatory body said that it is evaluating all the programs with the technical support of GLI. The purpose is that, after complying with all the evaluation procedures and the legal requirements, the regulatory body apFEBRUARY 2018
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proves them to keep the jurisdiction of those programs and, in this way, to avoid its illegal use. “I think that we all have to pay immediate attention to this situation, because if we leave this area free and open, some other people would come and fill it. That is a reality”, warned Jaime Irizarry, Director at the Gaming Division.
The relation between the tourist sector and the casinos is still current, apart from the fact that the 94% of the players are local residents. As regards the new investments for casinos, there are several entrepreneurs —local and foreign ones— that ask for information about the opportunities to operate gaming rooms. For the regulatory body, it is important that investments could be increased to the maximum, but avoiding to reach the point of saturation of the market.
THE SIZE OF THE MARKET
: 17 : 5,451 : 200 Leyendas
: casinos : slot machines : gaming tables Source: Tourism Company of Puerto Rico (updated information up to May 31st, 2017).
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A new view The steps that the maximum gaming authority of Puerto Rico plans to follow to boost the industry. Jaime Irizarry Delgado, director at Games of Chance of the Tourism Company of Puerto Rico.
I
n 1948 Puerto Rico became the second jurisdiction of United States in approving a Gaming Law. Our large experience inside the industry allowed us, in a certain moment of history, to turned into a role model for other countries. As an added value to that contribution, many Puerto Rican professionals got specialized to work as consultants in other Latin American countries, either in the public and in the private sector.
COMPLEXITY OF THE SECTOR The Gaming Law in Puerto Rico only regulates two activities: the casino rooms inside the authorized hotels and the amusement machines for adults, according to the Law 77 of 2014. As regards the bets of the traditional, special or electronic lotteries, horsebetting and roostersbetting, all of them are regulated by other agencies or institutions that are not related to games of
chance. Unfortunately, this creates a distortion among the tasks, the experience and the regulation, which has been recently reflected on the regulation of the amusement machines for adults.
A NEW LAW As a solution for this jurisdictional situation, the Gaming Division of the Tourism Company is considering a new Gaming Law for this year. A new version that allows to legalize games of chance in only one regulatory body that, in turn, gets tempered to a promoter model of investment in Puerto Rico. To achieve this conceptualization of the political sector of our island will be a greater challenge. According to the historical antecedents that are related to the regulation, it is frequent that, the more regulated economic activity is regulated, the biggest the growth rate is. In Puerto Rico, we are ready for a new view.
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REPORT
THE BETTING FEVER Peru, as the rest of the world, experienced an increase in the sports bettings at the end of the South American qualifying rounds of the 2018 FIFA World Cup Russia. According to the specialists, the future of the sector seems to be promising.
A
s the Peruvian national team was fighting for a place in the 2018 FIFA World Cup Russia, the expectations and the excitement grew in the most of its supporters. And with that, sports bettings started to take off. In this country, football takes the 90% of the bets. The tournament
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that receives the most of the bets is the local championship, which is followed by the Spanish football, the UEFA Champions League, and the Copa Libertadores, among others. The 60% of the market in Peru is developed in the establishments, while the other 40% is made in the online
cannel. Among the most famous sites and betting rooms we can find brands like Apuesta Total, Betcriss, Intralot, Betsson and Bwin. And, who are those that bet the most? Usually, young people between 18 and 35 years (60%) and adults between 36 and 55 years (25%).
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for this formats. On the other side, the access to the Internet has also been decisive for its development. “Now, it is much more massive. We have the possibility of playing things that we could not play before. We are living a worldwide boom, but this is just starting in Peru”, he said.
THE DEVELOPMENT OF THE MARKET Apuesta Total is the retail and online website of sports bettings that is being operated in Peru since 2015. The company counts with more than 120 establishments at a national level and it is the second operator of the country. “We integrate our own platform with different suppliers. We are the only operator in Peru that has developed this as regards the needs of the local market”, claimed Artieda. To access the website, the player will have to register himself with his ID card and confirm that he has reached the age of 18. The General Manager of Free Games said that the recharge can be made through different methods of payment, so then you can automatically make your bet. “Considering our competition in the retail and web area, we count with the best subscription of the market. And you can play from just one match
and from just one Peruvian Sol. We have a great portfolio, which includes the main leagues of the world and with the best betting options that you can find at a global level”, he claimed.
The growth of the sports bettings due to the next world cup should be between the 25% and the 30%, regarding 2017. SOUTH AMERICAN QUALIFYING ROUNDS The tournament, which has been developed since 2015, has given a boost to the sector; but, definitely, the last dates played a decisive role in the increase of the bets. “We have grown in a 15% as regards the previous match of Peru. Every time the national team played, there was a growth of almost 10% or 15% in the number of tickets”, said Fernando Artieda. In this way, the expectation of the Peruvian people for watching their country in a world cup was quickly
THE GROWTH OF THE SECTOR For most of the specialists it is not a novelty that bettings will have a better performance this 2018. “Before this stage, the market has been growing during the last years. Now, the world cup is going to empower it even more. I could not give a precise number, but the growth could be between the 25% and 30% as regards 2017”, said Fernando Artieda, General Manager at Free Games, owner of the brand Apuesta Total, during an interview for CASINO Magazine. The clearest evidence of this growth is the number of points of sales that can be seen in the supermarkets, sports bars and exclusive shops
Fernando Artieda, general manager of Free Games, brand owner Apuesta Total.
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REPORT
The betting houses achieved a considerable increase in the repechage dates.
The last phase of the World Cup qualifiers Russia 2018, Peruvians bet, mostly, for their selection.
reflected on the bets. For example, the match that was played against Argentina in the Bombonera, the clear favorite team was the one that was leaded by Lionel Messi. However, in Peru, nine out of ten bets trusted on their national team´s victory. (A victory paid 10.2 times the bet, a tie six times and a triumph of the Albiceleste 1.2).
Apuesta Total is the retail and online sports betting website that Peru operates since 2015 and it counts with more than 120 establishments at a national level. For the meeting with Colombia, the outlook was similar. No less could be expected: the result of that match determined the luck of Peru to make its dream come true. The Peruvian victory paid 2.29 times, and the bets in favor of this result reached the 95%. 66
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A DREAM COME TRUE In the final stages, Peru risked the classification with New Zealand in Wellington and in Lima. In Apuesta Total, 60,000 tickets were sold for these matches. “We plan to consolidate us in a strong way in 2018. We expect to count with the 30% of the Peruvian market in a retail level next year, a channel that is working quite well for companies and people that want to invest and generate additional
incomes with this type of business. We also look for reaching a growth of a 40% in the online market. We have plans of expansion in other countries this 2018”, Fernando Artieda announced. It is expected that, only during this year, the sector will move US$300 million (a 20% more than what was planned in 2016). The numbers that sports bettings would reach during the World Cup in 2018 will be another story.
AGOSTO 2017
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