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Argentina – Future of Buenos Aires’ floating casino uncertain

By - 17 August 2018

The Mayor of Buenos Aires Rodríguez Larreta is looking at a number of options when it comes to the future of the so-called floating casino in Buenos Aires.

The casino 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 Deputy Elisa Carrió National Deputy for Buenos Aires and leader of the social liberal Civic Coalition ARI party.

But drastic spending cuts are set for next year, which will amount to at least $ 10,000 million (more than US$335m) and the licence for the floating casino, which generates a significant amount of government revenue, expires in October 2019. By 2018, it is estimated that the floating casino and the racino will generate more than $ 4,000 million (about US$134m) in tax revenue for the Buenos Aires treasury.

According to an unnamed source talking to local news portal Big Bang News, the Mayor has decided to keep the floating casino open. The government could either nationalise it or offer the licence of the slot machines for tender while table games would be state run under current plans.

In July 2016, it was announced that the city of Buenos Aires would for the first time have total control over gaming within its territory and Larreta announced that the government had applied a gross income tax on gaming on the floating casinos for the first time in over ten years. The deal also encompassed the payment of back taxes, which had also long been a long running issue. The new agreement, which was hammered out in 2016, guaranteed that the floating casino could remain open until the end of 2019 as initially agreed.

However, after that the government almost immediately increased the fee that the state charges the floating casino from 20 per cent to 30 per cent putting it in line with the fee for the racino in downtown Buenos Aires.
In theory once the licence ends for the floating casino it may not be renewed as set down by the Buenos Aires Constitution. However in July 2017, it was revealed that the team in charge of carrying out negotiations for the transfer of control of gaming to the City were evaluating the possibility of nationalising the Floating Casino. Although not in line with the wider economic policy of the administration, it would arguably be preferable to the loss of 2000 jobs plus millions lost per year in tax revenue.

Either way any decision to extend the licence will come at a high political cost due to the likely opposition from some of Larreta’s more prominent political allies. Larreta hopes to be re-elected as mayor of Buenos Aires next year and needs to moderate any tension particularly with Carrió. In addition, Buenos Aires province Governor María Eugenia Vidal is against an expansion of gambling, as is Vice President of Argentina Gabriela Michetti.

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