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Dominican Republic – Dominican Republic needs to take action against illegal lottery outlets

By - 15 June 2017

Illegal lottery gaming is on the rise and costing the government millions of dollars every year according to the Dominican Tax Office (DGII).

According to the DGII illegal gaming via unlicensed lottery outlets will cost the state a total of U$S63,638,730 this year and there could be as many as 70,000 illegal outlets now in operation nationwide.

President of The National Federation of Lottery Betting Parlors FENEBANCA, Wilson de los Santos speaking to local press said that the country only needed a relatively small number of lottery outlets in order to generate revenue for the state. “We have said in the past that with no more than 6,000 (outlets) throughout the country we could operate in a normal way, be profitable and the state could receive a lot more resources for works of social good. . .The situation is out of control,” he said.

Deputy Mario Hidalgo, who has introduced a new law which would reduce the number of illegal lottery outlets, proposes reducing the number of draws so that they are only drawn twice weekly as opposed to every day of the week. Meanwhile former Commercial Director of the National Lottery and country representative to CIBELAE (Corporation Iberoamericana de Loterías y Apuestas del Estado) Tiburcio Perdomo told press that the Dominican Republic now ranks highest in the world when it comes to gambling per capita. It is estimated that gambling per year now stands at around $3.2bn with lotteries accounting for the vast amount of the total market share.

There are only 30,750 registered lottery outlets registered with the Ministry of Finance compared to an estimated 70,000 illegal lottery outlets meaning that the government is only receiving a fraction of what it should receive in gaming tax revenue.

Illegal sports betting is even more widespread. Due to the lack of information it is practically impossible to estimate the levels of tax evasion when it comes to illegal sports betting and the exact number illegal sports betting shops is unknown.

Illegal gaming has been a persistent issue yet the government has done little to tackle the growth of illegal sports betting shops and lottery outlets. In 2015 FENEBANCA reiterated its calls on the government to address the issue of illegal gaming as a matter or urgency and argued that the Ministry of Finance as the regulatory body had not met its legal requirements as set out by law. In addition FENEBANCA called for the creation of a new entity which would be responsible for regulating the industry. In July 2016 a government committee heard the opinions held by those involved in the gaming industry over a new bill which aimed to provide stricter control over gambling in the Dominican Republic. The bill seeks to regulate gambling, provide strict player protection measures, combat fraud and promote responsible gambling.

However the bill has yet to be passed and very little action has been taken to tackle the growth of illegal gaming. In February FENABANCA demanded that President Danilo Medina take urgent action in order to combat the rise of illegal lottery outlets and sports betting shops. In a statement the organisation said: “The permissiveness of the authorities is so overwhelming that they (illegal lottery outlets) are now in shops, chemists, workshops and any establishment, and even minors have posts to sell lotteries.”

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