Operator News
Panama – Panama suffers 150 job losses as casinos continue to decline
By Phil - 2 May 2018
According to the Association of Managers of Gaming (ASAJA), more than 150 job losses were recorded in the gaming industry in April.
ASAJA President Antonio Alfaro told local press that every casino in Panama is now operating with the minimum number of staff possible and two closures are now causing considerable concern within the industry.
The industry is currently facing a number of setbacks and obstacles to growth including increased taxation on the consumer, money laundering fears and a decline in tourism, which began in 2008 with the arrival of the global economic crisis.
The new tax went into effect in May 2015 and applied a tax on cash withdrawals from casinos, slot parlours, bingo halls and sports betting shops of 5.5 per cent. The tax has an especially detrimental effect on the casino industry. The previous law stated that seven per cent was payable on payouts of US$300 or more via slot machines. However, the 5.5 per cent tax applies now to all cash withdrawals.
Alfaro blamed the current situation squarely on the new tax. More than 2,500 people have been laid off in the gaming industry since 2015. “We are very concerned about the situation and we have done everything possible, sending reports and studies to the plenary of the Games Control Board (JCJ), to the minister so that they reconsider a law – a law that does not exist anywhere else in the world, ” he said. Alfaro added that the ASAJA was willing to discuss the issue with the government in order to find a solution to end the current crisis.
The JCJ revoked the licence of the Veneto Hotel & Casino three years ago, as the owners of the hotel owed wages, as well as social security contributions worth several millions of dollars. The hotel had continued to operate under the administration of the JCJ. However, on Friday (April 27th) employees were told that the hotel had closed and on Saturday, the power supply to the building was cut off. Workers protested near the establishment, demanding the payment of salaries and benefits. Meanwhile Alfaro said that the Casino Princess, also in Panama City, was scheduled to close on April 30th while many other casinos were struggling to keep afloat.
The tax has not only affected the gaming industry, but has also affected the government’s own revenues, since between 2014 and 2016, tax collection from the industry has decreased by 17.7 per cent – equivalent to US$17m. However, the government has consistently defended its decision to raise taxes in order to combat gambling addiction and raise US$60m of the US$74.8m needed to increase pensions.
