Online Gaming Frozen In Buenos Aires

A recent court decision in Argentina’s capital province means online gambling developments will stop in their tracks. As the coronavirus pandemic continues to unfold and communities worldwide are forced to bring operations to a halt, the gambling market has found salvation in the promise of online gambling. This decision, put forth by Buenos Aires’s new government, will offer a new existential challenge to the province’s gambling businesses.

Cars swirl around Buenos Aires’s famous Obelisco monument.

This is just the latest decision in a long series of regulations on the topic of legal gambling in Argentina. ©Willian Justen de Vasconcellos/Unsplash

A Decisive End To The Waffling

For a time, the status of legal online gambling in Buenos Aires was held in limbo between the gambling-friendly former administration, headed by María Eugenia Vidal, and the administration which has followed, led by left-wing leader and gambling opponent Axel Kicilof.

According to Buenos Aires newspaper Clarín, a federal judge ruled in favor of a land-based operator, who had petitioned the court to suspend ongoing applications for companies seeking licenses to operate online gambling in Buenos Aires. In effect, the judge overruled applications for legal online gambling in the city, determining the, no longer viable.

A Quandary Which Grew Out of Coronavirus

This latest decision in regards to online gambling in Buenos Aires came after the massive spread of the novel coronavirus, or COVID-19, which forced many brick-and-mortar casinos in Buenos Aires to shut their doors. According to the 2019 statute, land-based operators were barred from applying to operate online gambling, due to monopoly potential.

However, once the coronavirus brought city economies to a halt, casinos once barred from applying for iGaming licenses are now at a loss for business. This included the riverboat casinos in Buenos Aires’s Puerto Madero neighborhood and the Hipódromo Argentino de Palermo, a racetrack with slot machines.

Without income but ongoing bills to pay, the Puerto Madero casino and the Hipódromo Argentino de Palermo began the work to contest the Buenos Aires City Lottery’s ongoing application process. Initially, a trial court threw out the petition, but when appealed, a federal court ruled in favor of the struggling casinos.

According to the operators who filed the claim,

“the decision to hold an application process to grant supposed online gambling permits to private operators, would violate federal legislation that establishes that the regulation of gambling falls within the City of Buenos Aires.”

For A Time, Legal Gambling in Buenos Aires Had Promise

The decision by the Buenos Aires court resolved a number of years of questioning over the status of legal gambling in Buenos Aires. As the capital province of Argentina, what happens in the region generally indicates trends that can happen else where in the country, and gaming enthusiasts have hoped a wave of gaming regulations could follow.

Prior to the summer of 2019, it seemed that a number of decisions regarding legal gambling were on the cusp of being made by then-Governor María Eurgenia Vidal. In 2018, Vidal had passed Decree 181, a law which stipulated that online and live casino gambling was effectively legal, including slots, sports betting, and horseracing.

Following the passage of Decree 181, Buenos Aires established a thorough vetting and application process, effectively becoming the arbiter of legal online gambling activity in Argentina’s capital province. Less than six months after the decree passed, Buenos Aires officials were in the midst of approving licenses for seven online casinos.

2019 Elections Throw Everything Up In The Air

All was proceeding as normal in Argentina, with progress on the gambling regulation front from the time Governor Vidal first filed Decree 181 in December 2018 until August of 2019. On August 11, 2019, the country’s primary election yielded unexpected results: a landslide victory for the socialist party, Frente de Todos.

In addition to the trouncing of then-President Mauricio Macri by Frente de Todos leader Alberto Fernandez, Governor Vidal of Buenos Aires was shown up by the victory of Frente de Todos member Axel Kicilof. The results of the primary shocked the nation, throwing legal gambling into flux, as well as the very stability of the national currency, the peso.

Ever since, Argentina has struggled to recover from the results of the 2019 election, which showed in late October of 2019 decisive victories for the Frente de Todos party. The peso has continued to struggle to recover, and the state of gambling in the country has taken a backseat, as Frente de Todos tends to be less favorable to gaming.

SAGSE 2019 Shows More Developments

Officials from Buenos Aires took to the stage at Latin America’s leading international gaming conference, SAGSE, to announce that the future of online lotteries would be exclusively regulated through the state. With that announcement, close to 1300 privately-owned lottery businesses were rendered illegal.

This announcement came just a short time after Argentina’s officials cracked down on the use of credit, debit, and prepaid cards when overseas, which grew out of the discovery that Argentine citizens would buy chips from international casinos using their credit cards, and then cash their chips for US dollars, the beginning of a black market currency trade.

How Does the New Court Decision Affect This?

The decision made by a Buenos Aires federal court judge in favor of the Puerto Madero casino and the Hipódromo Argentino de Palermo effectively halts the ongoing regulatory process for iGaming in Argentina. The process in question was launched in February 2020, prior to the outbreak of COVID in the nation.

At that time, the application process excluded businesses like the Puerto Madero casino and the Hipódromo Argentino de Palmero. Due to their crushing loss of business since the pandemic has struck, this fairly-new regulatory process has been stopped in its tracks. This does not mean that online gambling is now illegal in Argentina.

Rather, it means that the process by which many new online gaming companies would have become legit in Argentina is no longer viable. From this, there are a few potential outcomes — one, that Argentina’s gambling market suffers tremendously from COVID-19-related losses, or another, that illegal online gambling continues and potentially grows.

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