Bolivia
New Gaming Law Could Cause Casinos to Close
A new gaming law that imposes a 15 percent tax on players has been passed by the Bolivian government. The law, which received a two-thirds majority in the Bolivian Senate, was passed in the early hours of Nov. 17. The law will create a new governing body, which will be responsible for monitoring and taxing casinos, and also imposes a 30 percent tax on casinos. Once the act has received presidential approval, the new law will go into effect within 120 days.
The Bolivian government hopes to gain an additional $27 million in gaming tax revenue, as the new law not only increases tax on players and operators, but also paves the way for full-fledged casinos. According to Article Nine of the new law, table gaming, including roulette, will now be permitted.
The new legislation has had operators and casino workers up in arms, as many industry insiders feel that the additional taxes could lead to several imminent closures.
The tax on players is a further blow to the casino industry in Bolivia, as it will be imposed directly the moment the buyer buys chips or credits for slot machines from the casino.
The new law has also received criticism from many local politicians, as they argue that it favors the central government at the expense of local municipalities. The new law gives the central government almost total control over gaming, and it will now be the central government and not the local municipalities where the casinos are based that will reap most of the benefits.
Under previous legislation in Bolivia, the municipalities took 85 percent of gaming revenue. According to the new law, 100 percent of the 30 percent tax payable by the casinos will be destined for the National Treasury. Of the 15 percent tax payable by the players, 15 percent will go to the local state, 15 percent to the municipality where the casino is located, and 70 percent to the central government.
Mexico
1,000% Cost Increase for Casino Bar Licenses
According to local newspaper El Occidental, the Mexican Finance Committee of Guadalajara has approved increasing the rates for licensing bars in casinos. The new charges will go into effect in 2011, and the new fees will affect casinos located in the Guadalajara metropolitan area, namely in the municipalities of Guadalajara, Tlaquepaque, Tonalá and Tlajomulco.
At present, each bar license in the region costs from 4,000 pesos (around $320) to 25,000 pesos ($2,000) per year, depending where the bar and casino is located. According to the new legislation, the new license fee could increase up to 540,000 pesos per year ($43,000).
Law makers have justified the move by arguing that the casinos located in bars in Mexico are currently enjoying large profits and that the new tax will help control the expansion of gaming in Mexico. However, the new law has been criticized by opposition members who argue that the rise is excessive given the fact that starting next year casinos in Mexico could also have to pay a fee of 5,000 pesos per year ($400) per slot machine on the premises.
Critics of the new law also argue that the new rise in licensing fees is unjustifiable and unconstitutional, as it is excessive and therefore in contravention of Mexico’s fiscal laws. It is believed that if the new taxes are finally put into place, then many bars with casinos will battle against the new taxes in local courts.
Argentina
Locals Force Government to End Casino Project
A neighborhood consisting of 300 people has forced the local government to cancel the building of a large-scale casino and entertainment center. Locals from the neighborhood of Los Pescadores, located near the banks of the Parana River in the province of Chaco, clashed with supporters of the new project put forward by state Gov. K. Jorge Capitanich.
The new complex was set to overlook the river and house a casino, shops, cinema and restaurants. Environmental activists, along with locals, argued that the casino would have a negative effect on the local community and environment.
Locals, the majority of whom are fishermen, became angry when they were not allowed entry into a meeting organized by the State Lottery Organization and the local government to discuss the new project. This was despite the fact that they had applied for and had been given permission to attend the event. As scenes became increasingly violent, local infantry had to be called in to immediately set up a cordon around the building where the meeting was being held.
Since the demonstration, opposition to the project, which is known as “Antequerita,” has grown considerably and the local state representative of Chacon, Alicai Terada, has also publicly voiced her opposition to the project. As a consequence of the growing controversy surrounding the project, Capitanich announced in November that he will order the Local Lottery Commission to cancel the proposed casino.
In statements to press, Capitanich said, “To try and impose a decision without the consensus of the locals is not practical … if in the future the locals see a way that the project can work and it has a high level of consensus, then we should look into the feasibility of carrying it out.”
Chile
Casino Visitor Numbers on the Rise
According to figures released this month by the gaming commission in Chile, the Superintendencia de Casinos de Juego (SCJ), visitor numbers to the new casinos in Chile increased in October compared to the previous month. As reported in America Economia during October, the 15 casinos now in operation in Chile received 547,646 visitors compared to 502,863 in September, an increase of 8.1 percent.
The increase in number of visitors has, according to the SCJ, led to both an increase in gross income and the tax revenue generated by the casinos. Gross income in September amounted to U.S. $34.87 million and increased by 11.58 percent, to U.S. $38.91million in October, while gaming tax revenue reached $6.50 million for the 15 municipalities and 10 regional governments where the casinos are located. At the same time, the state collected a further $2.96 million from a tax on entrance fees and in the same month casino operators also paid a further $6.21million in VAT.
However, while visitor numbers have gone up, so have the number of complaints. According to local newspaper La Tercera, the SCJ received a hundred official complaints between January and September from disgruntled clients who have complained of defects in slot machines and of table games suddenly closing. Although relatively speaking the number of complaints is very small—during the same period the casinos received more than 3 million visitors—each case has to be investigated. According to La Tercera, the majority of complaints have been made about slot machines, and after carrying out their investigations, the SCJ found that 80 percent of the complaints were unjustified.
James Marrison has been covering the casino industry in Latin America for over seven years and has written in-depth features on every country in the region. Marrison has worked as a research contributor for Global Betting and Gaming Consultants and serves as a consultant for industry professionals for the Gerson Lehrman Group. Marrison is also a researcher into the online gaming markets in Europe.