Updates For Puerto Rico Gaming Industry

In essentially back-to-back announcements, Puerto Rico finalized a new sports betting law and announced new officials for its Gaming and Tourism sectors. The decision to legalize sports betting in the region was made as one of the final legislative acts performed by Wanda Vázquez Garced, who will be stepping down from her position as Puerto Rico’s Governor after less than a year and a half in office.

Sunrise over an urban landscape in Puerto Rico.

Recent updates in Puerto Rico’s gambling industry indicate efforts to offset ongoing COVID-19 related losses. ©fcubano/Pixabay

New Heads For Tourism And Gaming Offices

On Tuesday, January 12, news broke that two significant offices in Puerto Rico, the Puerto Rico Tourism Company and the Puerto Rican Gaming Commission, would be replacing their existing leadership with two new primary bosses. Coverage about the shift linked the new leadership to ongoing financial struggles in Puerto Rico, albeit indirectly.

A Connection Between The Two Offices

Over the weekend of January 8th, José Maymó Azize, the former executive director of the Puerto Rico Gaming Commission, tweeted that his position in the commission would indeed be filled by someone else. The person replacing Azize as executive director of the Puerto Rico Gaming Commission is Orlando Rivera.

Until early January, Rivera served as gaming supervisor at Puerto Rico Tourism Company. Despite its name, which implies that the organization is privately-run, the PRTC is in fact a public body. Because Rivera will be leaving his post in order to replace Azize at the Puerto Rico Gaming Commission, a void was left at the Puerto Rico Tourism Company.

Due to Rivera leaving his post, his former position at the Puerto Rico Tourism Company will now be filled by Carlos Mercado. For Mercado, the new role comes as more of a promotion than anything else: prior to this update, he had been employed by the PRTC. Until the promotion, Mercado served as the Puerto Rico Tourism Company’s deputy director.

An Uphill Climb: Puerto Rico’s Economic Woes

Coverage about the new appointments acknowledged that Puerto Rico has experienced significant financial strain due to the ongoing coronavirus pandemic, which only exacerbated overwhelming financial struggle following a series of earthquakes in 2017 and again throughout 2020.

By early August, hundreds of thousands of Puerto Rican residents found themselves unemployed due to the combined factors of natural disasters and a global pandemic. Then-Governor Wanda Vázquez opted for the approach of a strict lockdown, which saved Puerto Rico from the health toll of COVID-19, but worsened a different issue: poverty.

The Impact On The Gambling Industry

Puerto Rico’s gambling industry — which is, like in many other countries, closely enmeshed with its tourism economy — has been hard-hit by the virus, ensuing travel restrictions or tourism reduction, COVID-19 safety precautions which mandate strict visitation limits, and longstanding government-mandated lockdowns.

After briefly reopening during the summer, Governor Wanda Vázquez made the difficult decision to mandate that casinos once again close in July of 2020. The lockdown of casinos came with the lockdowns, too, of bars and movie theaters, a choice Vázquez attributed to potentially reopening too hastily after the first wave of the pandemic in March 2020.

By mid-September, casinos in Puerto Rico had still not received explicit permission from the government to reopen. In response to the interminable lockdown, a coalition of 15 Puerto Rican gambling industry leaders issued a signed petition to the region’s government, begging them to reopen casinos as a means of saving up to 3,000 jobs.

At the time, industry leaders pointed out that some 80,000 Puerto Ricans are dependent on the gambling industry for employment and, by extension, survival. Additionally, the region earns a significant amount of revenue annually from legal gambling, a sum totaling an estimated $150 million per annum.

While Casinos Stay Closed, Another Option: Sports Betting

Though Puerto Rico’s casinos have remained closed even as casinos around the US and Latin America — including in Argentina, Costa Rica, and Colombia, home to some of the continent’s strictest COVID responses — the government opted for another, rapidly popularizing approach to bring in new gaming revenue: sports betting.

On January 6, Governor Wanda Vázquez signed Senate Bill 1534, giving formal permission for eSports, remote betting, and sports betting throughout Puerto Rico. This bill is an exciting update to existing gambling legislation, offering an iGaming option for preexisting land-based locations.

These new laws mandate that players must register in person at a land-based casino before being able to participate in online sports betting. This is an update to preexisting laws in Puerto Rico, which stated that players did not have to register in person. Due to the expansion of which types of iGaming are legal in the region, the new rules will apply.

Expected Taxation On Puerto Rico’s New Gambling

According to Puerto Rico’s Gaming Commission, varying taxes will apply to each different, newly legal form of gambling. A 7% gross gaming revenue tax will be applied to land-based betting, while a 12% tax will be placed on both entry fees for fantasy sports and online gambling.

One Of Governor Vázquez’s Final Acts

The signing of Senate Bill 1534 constitutes among Governor Wanda Vázquez’s last significant moves as leader of Puerto Rico. In early January 2021, incumbent Puerto Rico Governor Pedro Pierluisi was sworn in as the region’s new government leader, representing the New Progressive Party, which advocates for the independent statehood of Puerto Rico.

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