Puerto Rico Signals Intent For US-Type Gambling Regulatory Framework

Puerto Rico has announced its intentions to develop a regulatory framework for gambling operations by issuing a request for proposals for consultation services for the Puerto Rico Gaming Commission.

US-Type Framework Needed

The Fiscal Agency and Financial Advisory Authority /AAFAF/ has issued a request for proposals /RFP/ seeking legal advice for issues related to drafting regulations that would govern operations of the agency, as well as consultation services regarding industry and activities under Act 81 of 2019, among which are sports betting, fantasy sports contests and e-sports.

The firm that will be selected to provide consultation services will also bear responsibility in terms of the future procedures of AAFAF regarding their level of compatibility with similar processes in other states, and even model the agency’s operations on the processes employed by regulators in other US jurisdictions.

The successful bidder will also have to inform the Puerto Rico regulator on an interim basis by submitting progress reports, and every candidate may apply with a proposal until the deadline of March 13, 2020.

Legalization Halted

The legal situation in Puerto Rico is currently in a state of limbo, as even though in July 2019 Governor Ricardo Rosselló had signed the Betting Committee Act, before resigning from his position days later, the approved legislation was halted and the legalization of sports betting postponed.

Betting on sports events, horse races, fantasy sports contests and e-sports would have been legalized at casinos, at the single race course on the island, as well as at off-track betting parlours and online, had the Betting Committee Act been approved.

As per bill PC2038 which the outgoing governor signed, operators will have to pay a 7% tax on gross gaming revenue /GGR/ for land-based facilities and 12% duty for online operations, and licenses will cost from $2,500 to $50,000 depending on the size of the operation.

Sports betting revenue is estimated to generate up to $87 million, with most of it to support pension funds, education and health programmes, with a portion of it going towards funding treatment of gambling addictions.

Important detail in the bill regarding sports betting facilities is that they cannot be made available near educational and religious locations, or close to sites offering treatment for gambling problems.

Ever since Governor Rosselló has resigned, the future of sports betting on the island is unclear, with new Governor Wanda Vázquez Garced keeping silent, until recently when she has expressed her intent for a total overhaul of the gambling industry, in a desperate attempt to revitalize the state’s economy.