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Paraguay – Comptroller General finds serious irregularities in sports betting tender

By - 23 February 2018

The Comptroller General of the Republic of Paraguay (CGR) has recommended that the bidding process for sports betting be declared void.

The CGR made its recommendations after finding a number of inconsistencies during the licensing process and has asked that the licence awarded to Daruma Sam (Apostala) be revoked. The decree giving the company the right to offer sports betting throughout Paraguay was signed by President Horacio Cartes last week.

The notification sent on Friday 16 by the Comptroller José Enrique Garcia to the Head of the Gaming Commission Javier Balbuena (CONAJZAR) states that the tender was monopolistic in design and is therefore incompatible with the constitution. The CGR also criticised the gaming board for ignoring the recommendation to immediately suspend the licensing process until it had issued its opinion on the issue. In April last year, the CGR had suggested ending the process. In November – the same month the envelopes of the tender were opened – the Comptroller’s Office requested that the process be stopped, but this request was ignored by CONAJZAR. The CGR went onto say that the process went against the government’s own objectives of opening up the betting market to more than one operator.

Daruma Sam was given the exclusive licence to offer sports betting throughout Paraguay for five years. Speaking to local press before the licence was awarded Balbuena said that sports betting could generate a minimum of G800m per month, although he said that projections indicate that by the middle of next year, this figure could easily climb to as much as G3,000 million per month. In addition, Balbuena told press that the new licence would generate about US$2m a month to the new licence holder minus prizes and taxes payable to the state.

Ilse González, General Director of Control of Public Contracting of the CGR, said that the latest recommendations put forward by the CGR are mandatory as they are enshrined in the National Constitution. For this reason, she urged CONAJZAR to obey the new provisions and to initiate a new tender.

Eighteen companies bought the terms of conditions and two companies the Jockey Club of Paraguay and Daruma Sam SA (Apostala) put forward a bid. However, the process has been plagued with controversy, as three complaints have been put forward alleging that the bidding process had been prepared with the intention of favouring one of the participants over the others. Accusations allege that the tender process was stacked in favour of Daruma Sam SA, which has ties to local government officials as well as members of the gaming board itself, according to local news sources.

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