Operator News

Panama – Gambling down in Panama as cash withdrawal tax halts play

By Phil - 31 October 2019

Panama’s controversial 5.5 per cent tax on all cash withdrawals made in casinos, slot parlours, bingo halls and sports betting shops and tracks has coincided with a fall in revenue of 3.1 per cent for the first eight months of the year.

Indeed since the tax was introduced, revenues from table gaming have dropped by a massive 47 per cent. Manuel Sánchez Ortega, Executive Secretary of the JCJ, said the 47 per cent drop in gambling table bets since the tax was established four years ago has led in turn to job losses. According to the Association of Managers of Gaming (ASAJA), the industry is still struggling to cope.

The industry has seen falling revenues and thousands of layoffs over recent years. As many 7,000 people have already lost their jobs due to increased taxes and decreasing tourist numbers.

In order to attract foreign players to Panama, in September the government announced plans to eliminate the controversial 5.5 per cent tax on gambling. The official clarified however that only the tax on table betting (which is only permitted in casinos in a hotel with at least 300 rooms) will be eliminated. The tax on slots in casinos, slot parlours and sports betting will remain in place.

Between January and August in Panama, a total of US$1,425m was wagered, a difference of US$45,000 compared to the same period last year, according to data released by the Gaming Control Board (JCJ). Of the total wagered until August, US$1,116m was paid in prizes, leaving a gross income for gambling operators of $259.6m.

Operators say that the 5.5 per cent tax that was established in 2015 on prizes to finance pension funds has discouraged international investment and players.

Annually, the state receives around US$53m for the application of the additional tax on gambling. With the exemption that will now be made for table games it is estimated that collection will fall by about US$3m.

Of the amount wagered until August, US$ 75.6m was bet on table games. The figure reflects a year-on-year fall of 15 per cent, while wagering on type A slot machines (slot machines which do not have a payout ceiling) fell 2.6 per cent to $ 1,277 million. Of all the types of gambling which come under the regulation of the JCJ, the only vertical that registered a positive balance was sports betting which increased by 13.2 per cent to US$33.6m.