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Puerto Rico – Court threat hits Puerto Rico’s VLT plan

By - 10 June 2015

The Association of Hotels and Tourism of Puerto Rico has not ruled out going to court, if lawmakers amend Treasury Department rules which would legalise video lotteries (VLT’s).

Treasury Secretary Juan Zaragoza has justified the decision saying that new rules would legalise between 20 and 25 thousand machines in three years.

Mr. Zaragoza said that machines now operating in illegal casinos, bars, bakeries and even shopping malls, could join the network of legalised VLT’s if changes to gaming legislation are made.
“It is currently estimated that there are about 40,000 illegal machines. This activity has been investigated by the Department of Justice, which has carried out a number of operations to eradicate them,” Mr. Zaragoza said. “Under the (new) video lottery system, machines that meet the technical requirements that will eventually be established will be able to be integrated into the system,” he said.

A Board convened to look into the issue published a report in March announcing that it would amend lottery regulation to include video lottery games. This matter must now be evaluated by the Legislature which has until July 4 to halt changes to the countries gaming laws.

However, groups such as the Association of Hotels and Tourism are opposed to this change on the grounds that will affect the income of casinos in hotels.

Miguel Vega, President of the Board of Directors of the Association of Hotels and Tourism said that they will continue to lobby against the new law and warned that should lawmakers go ahead and give the bill the green light then it would lead to a battle in court. This is because according to law only the Legislature may make changes to gaming laws and gaming legislation should and be cannot be approved by the Ministry of Finance.

Zaragoza however defended the new measures arguing that the video lotteries appeal to a different audience to casinos.

“We have concluded that video lottery games serve a different casino market, so we anticipate that hotel operations will not be effected,” he said. In addition he said that the negative effects of illegal slot machines far outweighed any effects that a properly regulated video lottery system might have on the casino industry. He also pointed out that it would be the legislature which would have the final vote on the matter.

Mr Vega though warned that the Association of Hotels and Tourism was prepared “to see it through to the end.” And went onto say that VLT’s “have proven to be bad for Puerto Rico, it is bad for our industry and puts 70, 000 jobs in the tourism industry at risk illegal machines could further undermine casino revenues.” As evidence of this he pointed out that six casinos have already been forced to close their doors due to the rise of illegal slot machines.

In addition he said the government had not presented any evidence that showed that VLT’s would generate more money for the treasury and suggested that the primary purpose behind the new law was to legalise those slot machines that are currently operating without a licence. However the Treasury estimates that allowing VLT’s would bring in additional US$100m per year to government coffers.

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