Operator News
Puerto Rico – New licence fees will lead to job losses in Puerto Rico
By Phil - 4 August 2017
Slot operators located in northern Puerto Rico have warned the Financial Oversight and Management Board that if it increases the cost of licenses for slot machines then at least 9,000 employees in the sector could lose their jobs.
According to a statement released by the coordinator of machine operators, Anibal Villafañe, if House Bill 1142 is approved, which would increase the cost of licenses from US$100 to US$3,000, the government will also fail to reap the US$80m it expects to from the new act.
“There is no way in which operators can pay the licenses of each machine at that price. The increase included in the project will be impossible to satisfy,” Villafañe said. Villafañe went onto say that the project proposed by Governor Ricardo Rosselló, who was sworn into office earlier this year, “is not in line with the economic situation of Puerto Rico and is another attempt to harm our entertainment machine industry . . . The expected projections following the approval of the project are false, ridiculous and out of all budgetary reality,” he said.
According to Villafañe, this is the second time in less than 60 days that the Executive has tried to push the bill through the Legislature, which he said “contains serious errors and excessive increases,” for the licenses of all types of gaming machines.
The Gaming Division of The Puerto Rico Tourism Company (PRTC) regulates all administrative processes regarding licensing, franchise concession, supervision, and management of gaming operations in Puerto Rico. Casino revenue is a vital source of funding for the PRTC as well as the biggest state university on the island. Under present rules casino revenue is divided equally between the operator and the state. 45.45 per cent of gaming revenue goes the University of Puerto Rico, the largest public university on the island, 15.15 per cent goes the Treasury, 25.8 per cent to the PRTC and 13.6 per cent to the Committee for the Development of the Tourism Industry. As well as taxes on gaming income, the government also taxes an additional 2 per cent on hotel rooms when the hotel is attached to a casino.
Since 2005 Puerto Rico’s economy has shrunk by about 10 percent, unemployment stands at over 12 per cent and the country has now run up a bond debt of over US$70bn. In order to address the crisis in June 2016 the American Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) a federal law which allowed for the creation of a Financial Oversight & Management Board (FOMB) with the authority to restructure Puerto Rico’s debt. It will be key in identifying reforms to improve the country’s economic future.
