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Uruguay – Uruguay’s new gaming could harm free competition

By - 3 May 2016

The Finance Committee in the Chamber of Deputies has been told that the new gaming act could harm free competition and would create a complete monopoly over gaming.

Members of the decentralised body the Commission for the Promotion and Protection of Competition, while positive regarding many aspects of the new act, criticised certain aspects as it would “expand” the current monopoly by suppressing the expansion of slot machines and electronic gaming machines in different locations.

According to Javier Gomensoro: “If the initiative is intended to ensure that gaming is a lawful activity, they must be careful not to set up a curtailment of gaming.”

A number of concerns are arising from the wording of the text especially around the explanatory memorandum which underlines that it is the state which will retain the full monopoly over gaming. According to the new act: “Gambling in public or in public places is banned on principle, except when it is exploited directly by the state, via the exercise of the monopoly that it holds, or through operators expressly authorised for this purpose.” The new law also puts heavy fines in place for those found to be breaking the new law including jail terms.

According to Gomensoro, the bill presents a situation which is clearly prejudicial to the marketplace operating in a dynamic manner and that the private sector needs guarantees in order to be able to develop their activities freely. Other legislators and industry insiders also voiced their concerns during the hearing.

The new law aims to provide a comprehensive framework which would see a major restructure when it comes to the way gaming is controlled by the state. According to the draft of the new law, the government seeks to create a new governing body called the National Management of State Gambling and Casinos (Administración Nacional de Casinos y Juegos de Apuestas del Estado) which would exercise state control over all types of gambling.

The new proposals also seek to create a new Betting and Gaming National Comptroller’s Office (Dirección Nacional de Contralor de Apuestas y Juegos de Azar) which would be responsible for the supervision of the quality of accounting and financial reporting of State Lotteries. This body would replace the Uruguayan Board of Lotteries and Pools Betting (Dirección Nacional de Loterías y Quinielas).

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