July 31, 2012

Argentina’s government looks to nationalise casinos

The AFIP (Administración Federal de Ingresos Públicos) of Argentina last week requested that casinos and bingo halls nationwide supply their slot turnover to the government.

This raised speculation amongst employees that Argentina’s President Cristina Kirchner wants to nationalise gaming, as the AFIP already poses the requested information from the receipt of taxes.

The government has the power to automatically nationalise all casinos controlled by the national government. Under existing legislation, it includes cities that take the lion share collecting around us$70 million a year.

According to recent reports, the industry located inside the capital city’s limits would be subject to any new legislation.

There are three large gaming establishments in Buenos Aires, a racino in the upmarket area of Palermo, and two floating casinos permanently moored next to each other in the city centre.

Congressman Mario Daniel Caputo recently drafted legislation that would give the state “exploitation, regulation, control and administration” of gaming in the state, whilst banning “privatisation, awarding and outsourcing under any conditions.”

Mario Caputo, commented, “From the Chamber of Representatives of the Province of Buenos Aires, it is essential to revise the whole system to bring the regional government a legal instrument that enables to take the most of the resources generated by the games of chance.”

In the case of bingo and gaming halls in Argentina provinces, a bill first needs to be drafted and approved by local legislative leaders.

Privatisation of gaming in Argentina comes as a great shock to the country under Cristina Kirchner, who assumed presidency in 2007. The previous president and former husband of Cristina, the late Néstor Kirchner, had close ties to the gaming industry.

Casino Club, one of the country’s largest gaming operators and owned by a close friend of Mr. Kirchner, was granted permission to run three casinos in Santa Cruz in 2001. Two years later, Casino Club took over the slot machine operation at the Palermo racino and bought a significant share of the floating casinos from CIRSA.

However, things changed with the new President, who according to local media reports, is shutting all correspondence with the industry. The idea of nationalising the gaming industry seems to be gaining ground in Buenos Aires and a newly submitted draft would not renew existing casino and bingo licenses.

Nationalisation is still in the speculative stage and no concrete plans have been announced, but the industry is preparing for a possible change. This would include a central system that would license operators and collect gaming tax.

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