Illegal gaming in South America

Chile is one of the countries that is a point of reference on casino regulation in South America. However, gaming machines that operate without the authorization of the Casino Superintendence exceed significantly those that are under its control.

In Uruguay, casinos can just be operated by the State –the national government or Montevideo Council-, with the exceptions of Hotel Casino Conrad and Hotel Casino Carrasco; however, in the whole country it is posible to bet on gaming machines that are not inside the venues administrated by the state, or in the hotels mentioned before.

Ciudad del Este, in Paraguay, is not only one of the cities with greater commercial traffic worldwide. It could also be considered as one of the places with more number of “street machines”; it means, that gaming machines that are literally on the streets, without any permission and with free access to adults and minors. 

In Paraguay, gaming machines can just operate inside a casino authorized by official entity CONAJZAR or in a gambling venue authorized by the corresponding Local Council. However, the law seems to be dead letter.

In Colombia there was a change of authority. Before, ECOSALUD left and ETESA entered, and now ETESA left and COLJUEGOS entered. However, informality has not changed. Although there are no official statistics on online gaming, it is considered that more than 50% operate without a contract with COLJUEGOS.

There are other regional countries in which gaming is practically forbidden: Brazil, Ecuador and Venezuela. Prohibition is just formal. Why does this occur? Three are the general reasons that can cause the informality on a regulated sector: I) Bad laws, II) Lack of Fiscalization and III) Corruption. 

I) Bad laws

Gaming legislations in South America, as a general rule, are not consisten and organized. Civil and penal codes say something and special laws say something else. 

Legislators do not take as scope of application the games that are juridically relevant, and keep on taking as a starting point the “games of chance”, a category that is absolutely out of phase due to technology, when they should use “betting games” as a vertebral column. 

The first regulatory model that is following this trend is Nicaragua. Legal voids are used for those who pretend to operate on the fringes of what was established by the gaming authorities. As there is not a standard treatment to all betting games, the system desestabilizes.

II) Lack of Fiscalization

In Peru, the General Direction of Casino Games and Slots declared war to the “Chinese machines.” They are called this way because most of them come from Asia.

Characterized by being smaller than conventional slots and decorated with attractive drawings for an improper target market: underaged. Laws are not enough. Operation after operation. So far, the Peruvian authority confiscates and destroys machines even in the most hidden place in Peru. Import them and assemble them is easy. Their cost does not exceed us$ 200 and they are installed in the suburbs without any contract and any document. In a few months of operation, they have already recoup the investment.

That’s why the task of the State must be permanent, or otherwise, they proliferate. The lack of fiscalization occurs more in this sector when the authority is not centralized. It occured in Peru for a long time, when the slots authorizations were granted by local councils, and now it occurs in Paraguay. Many authorities do not add up the efforts.

III) Corruption

One of the reasons why ETESA disappared, is because they  looked the other way with illegal machines. COLJUEGOS has the chance to correct that problem. 

A case that can be considered is another new authority, the Authority of Fiscalization and Social Control of Gaming in Bolivia, which has declare the open war against ilegal gaming.

But, in order to work, there has to be a political will from the highest level, also maintaining the proper independence of the powers of the state.

It is necessary to have a real knowledge of this sector and its regulation by the authorities of the three powers of the state: Executive, Legislative and, mainly, from the Judiciary Branch of Government.