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Argentina: provinces single out igaming to turn around fortunes

By - 19 November 2020

Casino licenses in Argentina fall under provincial jurisdiction and as such land- based casinos are licensed by each province. The majority are located in hotels and are designed to increase tourism in the area. On a national level casinos are less controversial than they are in the capital and they have been increasing steadily, especially in the provinces of Rosario and Mendoza. Bingo halls in Buenos Aires, meanwhile, are often large scale housing in some cases hundreds of Class III slot machines on the premises.

Although casinos are banned by law there are still two large scale casinos in the capital. These are the ‘floating casinos’ docked permanently to the harbour, while the second is under the racetrack in the neighbourhood of Palermo downtown. Since 2003, the number of slot machines at the Palermo racetrack has expanded greatly, and today the casino now houses approximately 4,000 slot machines.

In August 2018, it was revealed that city Mayor Horacio Rodríguez Larreta was looking at a number of options when it comes to the future of the floating casino in Buenos Aires. The casino is an important source of income for the city finances as the local economy continues to shrink. Once the licence ends for the floating casino it may not be renewed as set down by the Buenos Aires Constitution.

The future of the floating casino has been left to the Supreme Court. The highest court must decide whether to accept a complaint filed by the Government of Buenos Aires against a judicial measure that allows the operating company of the floating gambling halls to continue operating the business even though their contract expired in October.

In Argentina, online gaming has been permitted since 2006, but only on a province-to-province basis and there is no national law in place that regulates online gaming. At present, seven Argentine provinces are looking at new regulations to allow for online gambling, while Chaco, Misiones, San Luis, Tucumán, Neuquén, Río Negro, Entre Ríos and the province of Buenos Aires now all allow it.

THE IMPACT

In March 20, with 128 active cases in the country and three deaths, the government put in place one of the strictest quarantines in the region. “You can recover from a drop in the GDP, but you can’t recover from death,” President Alberto Fernández said and instituted a tough lockdown early in the pandemic to limit the spread of COVID-19. So began one of the world’s longest and strictest nationwide lockdowns.

Responses to the outbreak have included restrictions on commerce and movement, closure of borders, and the shutting of schools and educational institutions. The vast majority of Argentines are supportive of the lockdown, according to polls.

With about 14 million inhabitants, the Buenos Aires metropolitan area (AMBA), concentrates 90 per cent of all cases registered to date. Fernández says his priority is a venture involving the coronavirus vaccine being developed by AstraZeneca with the UK’s Oxford University that would be manufactured in Argentina and Mexico, which he hopes will put the country’s economy back on track.

In March, Buenos Aires Minister of Health, Fernán Quirós, initially announced that the closing of casinos and racetracks in the city of Buenos Aires would be ordered, as a preventive measure to prevent the spread of the coronavirus in the region. “Although some may not like this situation, they are measures that we have to take,” Quirós explained at a press conference.

Among the new measures announced by the city government, after the coronavirus was first classified as a pandemic, was the ban on all events for 40 or more people. As the country went into lockdown every casino in the country was closed.

Casinos in a number of provinces in the country’s interior were gradually able to open their doors for a time. However, casinos in La Rioja had to close again subsequently as the number of infections began to rise. Since then an increasing number have been granted permission to open in provinces such as Santa Cruz San Juan, Catamarca and Chubut and once again in La Rioja, with strict safety measures in place. The six casinos in the province of San Juan, for example, have been granted permission to reopen with reduced staff, restricted numbers of customers and with no table games allowed.

POST-COVID OUTLOOK

When the first case of COVID-19 in Argentina was confirmed at the beginning of March, the Férnandez administration was beginning its fourth month in office and was in the middle of a sovereign debt renegotiation. The government reached a deal on August 4 with creditors who are owed $65bn, roughly 20 per cent of the nation’s $323bn total debt. The agreement gives some short-term relief by avoiding another default.

However, Argentina will need to reverse three straight years of economic contraction, including what JP Morgan forecasts will be a 13.5 per cent plunge this year amid the coronavirus lockdown, meaning that Argentina is on track for the worst one-year decline on record, along with inflation above 40 per cent and double-digit unemployment.

The peso has fallen 75 per cent since the end of 2017. According to the Federation of Commerce and Industry of Buenos Aires, one in five businesses in the capital have shut down since the coronavirus began. In April, Argentina’s economy fell by 26.4 per cent from the year before, and in May, the economy plummeted by 20.6 per cent from the year prior. More than a third of the country’s population of 44 million now live in poverty. Faced with economic uncertainty the government needs to raise revenue and create jobs.

The government will allow the Palermo Racecourse and the casino located in the port of Puerto Madero to offer online gambling, which will be launched before the end of the year. The newly launched online sites could generate as much as $500m pesos in municipal taxes.

The Buenos Aires government is looking to compensate the casinos for the temporary closure of the gaming rooms, due to the quarantine, which has left as many as 3,000 jobless. In September, the Buenos Aires Legislature modified online gambling rules in the City of Buenos Aires, meaning that the casinos in the city will now be able to offer online gambling.

Online casinos could also be given the green light in Mendoza. The Mendoza government is looking at ways to restrict online gambling sites, so that only those pages that have provincial authorisation can be accessed. Only seven will be allowed.

While the government does not know the exact amount of money being gambled online, unlicensed sites have used the crisis to attract gamblers while casinos were closed.

In Mendoza, the text that will be discussed in the Senate is the result of the accumulation of projects by Marcelo Rubio and Mercedes Rus, who presented initiatives in the first four months of the year. Gaming law in Mendoza allows for casinos in hotels in order to boost tourism.

The number of licences will stand between two and seven, after a public tender. The bidders must be located in the province once the law is approved and the established licenses are in place. Unlicensed operators will be blocked through requests to the National Communications Agency (Ena. com).

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