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Uruguay – Uruguay debating bill over licence fee distribution

By - 19 June 2019

A bill presented in the House of Representatives aims to change the way gambling revenue is distributed throughout the state. New proposals would send 40 per cent generated by licence fees directly to the department where any future casino is located (Uruguay consists of 19 departments).

The initiative put forward by Deputy Andrés Carrasco proposes that 40 per cent will go directly to infrastructure projects in each respective department, while the remaining 60 per cent will be set aside for general government revenues.

The change would be a major shake up to the way gambling is regulated by the state. Originally, the departmental governments received 40 per cent of the licence fees generated by private casinos or from the profits of the state casinos, but in the five year budget plan of 2005, the destination of resources was changed to a fixed percentage of the resources for every departmental government.

Impetus for the new bill is being driven by the opening of a new casino in Punta del Este in the government department of Maldono. Deputy of the Independent Party for the Maldonado department Andrés Carrasco is seeking for a quick approval for the bill in order to capitalise on the building of a new privately run casino.

The President of Uruguay, Tabaré Vázquez, has accepted the initiative put forward by the investment group headed by businessman Giuseppe Cipriani to build a casino in the San Rafael hotel in Punta del Este. Both the Ministry of Economy and Tourism have issued reports in favour of the new initiative as well.

According to local casino legislation, however, the licence holder for the new casino must pay a fee equal to or greater than that paid by Enjoy Punta del Este, currently equivalent to approximately US$7,500,000m.

The proposed regulatory change would mean that Maldonado would receive a huge windfall of approximately US$ 16m in a five-year period. Lawmakers in other departments could well seek to approve new casino licences as they would receive 40 per cent of licence fees going forward.

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