The governor of the province of Buenos Aires Maria Eugenia Vidal and the mayor of Buenos Aires Horacio Rodríguez Larreta will officially announce new gambling taxes this week.
The new tax will be imposed on slot machines in both the city limits and the province of Buenos Aires. The new tax on player winnings will help make up for cuts which both Vidal and Larreta have had to make in the face of Argentina’s worsening economic crisis and increasing pressure from the International Monetary Fund (IMF).
Both Vidal and Larreta’s administrations were the most affected by spending cuts which the Government of Mauricio Macri will impose next year. In September, the government announced sweeping new austerity measures in an attempt to stem its unfolding currency crisis, ahead of receiving US$50bn of funding from the IMF. The cuts will amount to $6,500 million for the City of Buenos Aires and close to $35,000 million for the government of the province of Buenos Aires. According to national daily La Nacion, the City Lottery authority and the Lottery and Casinos Institute for Buenos Aires Province have agreed on a new tax, which will automatically be deducted from slot machine winnings.
Gambling establishments will withhold the tax, which will vary between two and five per cent. According to local sources, this could create a windfall of $2,000 million for the City and $5,000,000 for the Buenos Aires province. It is believed that the new tax could go into place as early as March. Talking to news channel TN, Vidal who has long been openly opposed to gambling, confirmed the new tax on prizes last week.
The gaming industry could be heading for turbulent times. Not only will the new tax be met with fierce resistance amongst operators, the future of the so-called floating casino in Buenos Aires remains uncertain.
Larreta is looking at a number of options when it comes to the future of the casino moored to the harbour in Buenos Aires as it is an important source of income for the city finances as the local economy continues to shrink. However, any move to extend the deadline will be met with fierce opposition from National Deputy for Buenos Aires and leader of the social liberal Civic Coalition ARI party Elisa Carrió. But drastic spending cuts are set for next year, and the licence for the floating casino, which generates a significant amount of government revenue, expires in October 2019.