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Panama – Revenues down in Panama due to new tax say operators
By Phil - 16 November 2015
Revenues are down for the gaming industry in Panama with operators putting the blame squarely on a new tax which was first put into place in May.
Between July and August gaming revenue fell by 9.1 per cent after experiencing an increase since the beginning of the year of 5 per cent, according to figures just released. The new tax applies a tax on cash withdrawals from casinos of 5.5 per cent.
There has been growing confusion over the new tax as it penalises those who do not play. 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 made in casinos, slot parlours, bingo halls and sports betting shops and tracks and includes tips to employees, who have already expressed their complaints on the grounds that tips form part of their salary. Complicating the matter further is the fact that tax deductions are made even if the customer cashes in chips without winning. The new tax was approved in order to fund US$60m of the US$74.8m needed to increase pensions.
Manager of The Association of Managers of Gaming Panama (ASAJA) Antonio Alfaro said: “Win or lose, gamblers are subject to the tax, which decreases the flow to the gaming halls.”
According to the Panama’s National Comptroller’s Office, revenue generated by race tracks in August fell by 1.8 per cent, while so far it has fallen by 0.4 per cent generating U.S31.393m this year. Revenue grew in 2014 by 6.5 per cent.
Activity in bingo halls continued its downward trend this year after falling 85.7 per cent and totalling just U.S2.4m so far. This compared to 2014 when revenue grew by 558 per cent and stood at over US$17m.
Meanwhile table game revenue has also fallen by one per cent this year, declining as much as 28.4 per cent in August alone. However slot machines located in casinos have reported an increase of 7 per cent and revenues for the sports betting are also on the up and reported growth of 18.4 per so far in 2015.
