Argentine Football Association to file administrative reports against Pálpitos due to illegal sportbetting

"If this company operates this way, it is violating the Prode Law, so it is bad. AFA has an agreement with National Lottery, and the only game of chance that may use our tournaments is the Prode. We will file administrative or legal reports against the company or whoever is involved”, said Hugo Cots, General Secretary of AFA.

Palpitos is a sportbook game related to national and international facts, and people can only participate in Tucuman. Although 90 % of the income is from football, it considers other disciplines such as basketball, tennis, car racing and box. The company collects U$S 209,748 – U$S 299,640 a month and the Popular Saving Bank of the province that regulates its activity. The government of Tucuman receives a 4 % fee on the total collection.

"We do not depend of AFA (Argentine Football Association), but we are authorized by the Popular Saving Bank and we just act in Tucuman. It is more transparent if AFA does not participate, so no one suspects that there are arrangements of matches", explained Ariel Gabar, employee of Palpitos SRL.

One of the partners of Palpitos SRL is Roberto Sagra, a businessman from Tucuman that would also administrate the casino, the bingo and online poker machines that operate in the province. Sagra is also president of the Basketball Federation of Tucuman. It aims to open the influence of Palpitos SRL to other places. However, an AFA reaction would go against the project.

In the following days, the entity could go to court to prevent the company to continue using the matches of its two main tournaments as a collection source. The entity will be based in Article 19 of law 25,295 or Prode Law, approved in September 2000, which says: "It is forbidden in federal jurisdiction, the introduction, by any mean, with the aim to sell or for free, as well as the announcement, advertisement, circulation or sale, of any other contest of sportsbooks that is not operated and/ or commercialized by the National Lottery”.

There are two similar precedents similar to Palpitos SRL, but they did not prosper after AFA, the National Lottery and the Trade Union of Games of Chance Workers complained in Court. One of them was in Formosa, with a company of virtual bets, which, similar to the case of Tucuman, was authorized by an entity belonging to the government of the province, but anyway it infringed the law 25,295. However, the incident with the greatest repercussion was the one of Bwin Argentina SA, which did not achieve to start its financial operations in the country, although it is one of the firms with more money in the worldwide sportsbooks market.

Palpitos SRL collectsm just in Tucuman, us$ 2,397,119 a year, approximately. On the contrary, Prode, which is national, collects less than us$ 149,820, according to AFA sources. The difference shows a question: Is Prode profitable for AFA and the National Lottery? "The clubs do not receive anything,” explained the entity. Just 10,000 cards are sold a week, which worth us$ 0.29 each.

However, Julio Grondona and the authorities of National Lottery rejected a us$ 4 million offer from Codere, a Spanish firm that operates bingos, casinos and slots, that intended to relaunch the Prode. Cristóbal López, the tycoon of games in Argentina, was also interested, but he was not lucky either. In 2005, Sporting Bet company, which offered us$ 3,6 million a year, was also rejected. But AFA president has already designed a “new Prode” and betting system, that would start operating in February 2009 and would also be controlled by the National Lottery, according to sources close to Grondona.