Buenos Aires Grants Seven iGaming Licenses
In the first week of the new year, Buenos Aires announced that seven iGaming companies would receive coveted licenses to operate in the province. This announcement comes after a year of tremendous legislative development in Buenos Aires, and in Argentina more broadly, which had long waffled on the topic of expanding its legal gambling regulations. The companies which have received licenses include Intralot, Betsson, and Playtech.
Buenos Aires Government Releases Decision Just Before New Year
On December 31, the Buenos Aires provincial government announced via an official gazette the seven companies which had cleared the necessary hurdles to operate in Argentina’s capital province. According to reports, the groundwork for these licenses had been laid by Maria Eugenia Vidal, the former Governor of the region.
After Vidal Left Office, Future Of iGaming Uncertain
In October 2019, Buenos Aires Governor Maria Eugenia Vidal was ousted in a surprising election which saw an overwhelming turn toward leftist leadership in both provincial and federal elections. In addition to economic uncertainty brought by a plummeting peso, Vidal’s work to begin licensing iGaming in Buenos Aires was brought to a screeching halt.
Who Got Licenses?
The latest to come from Buenos Aires shows that seven companies have been granted permission to operate iGaming in the Argentine capital. This includes Betsson, Intralot, Playtech, 888 Holdings, Bet365, William Hill, and Pokerstars. These partnerships will take place as joint ventures with local companies.
As part of the licensing agreement, each company is expected to pay a single fixed payment totaling the equivalent of about $768,200 (USD), or ARS 65,000,000. Additionally, each company granted a license must pay an additional $307,300 (or ARS 26,000,000) once the licensing agreement has been signed.
Cementing Its Role In LatAm Gambling
Until now, Colombia was the leader of all matters iGaming in Latin America. After legalizing online gambling in the country in 2017, Colombia quickly sailed to the top of the region’s gambling industry, beating out countries with larger economies like Mexico, Brazil, and Argentina, which have not had such easy approval of gambling legislation.
Argentina boasts the third largest economy in Latin America after Mexico, with Brazil first, but neither country has managed to successfully establish an online gambling industry which can rival Colombia’s. In Brazil, efforts to legalize any form of gambling have routinely been stymied by longstanding cultural opposition to gambling.
Since Pandemic, Argentina Changes Its Tune
As the COVID-19 pandemic has continued, Argentina has adjusted its stance on legal gambling in real time. This has been, in large part, because the country has maintained one of the stricter approaches to the virus, which has included the mandated closure of casinos in Buenos Aires from March until December 14, 2020.
Financial Pressure Could Have Been Incentive
Across Latin America, countries have had to make the difficult decision to reopen their economies, risking the health and health care systems therein, or keep them closed, continuing or worsening preexisting financial precarity and hardship. It’s a lose-lose situation, one that has exacerbated existing financial strain for Argentina.
As of December 2020, inflation in Argentina had hit a staggering 40%, pairing ominously with steep loans the country had been loaned from the International Monetary Fund. A recent Forbes article revealed that Argentina’s economic officials expect the country’s economy to shrink in the double digits for 2020 — a record high.
As Shrinkage Continues, COVID-19 Cases Rise
Most recently, the financial strain in Argentina has been worsened as the COVID-19 crisis continues to escalate in the country. According to a December 16 report, Argentina reported a 10.2% contraction of the national economy, dovetailing with a tally of more than 41,200 deaths in the nation from the novel respiratory virus.
In Addition To iGaming, Argentina Raises iGaming Taxes
In late November, Argentinian officials approved the federal budget for the next year, which included a 150% increase on taxation for online gambling, raising the tax percentage from 2% to 5%. An additionally high tax rate will be placed on iGaming transactions taking place with iGaming platforms run by companies located outside of the country.
A Savvy Move: Raising Taxes Before Approving Licenses
Today, the decision on behalf of Argentina’s government to raise iGaming taxes significantly makes sense given late December’s reveal that the nation had approved seven companies to operate online gambling platforms in Buenos Aires. The combined factors of a higher tax rate and more available options will mean significant returns for the state.