Court ruling halts advance of online gambling in Buenos Aires City

The opening of an online gambling market in the City of Buenos Aires has been authorized by a law passed by the city’s legislature in 2019. The process for the implementation of such law began this year and it is aimed at regulating the activity to compete against foreign operators and obtain resources to fund social welfare efforts through tax collection.

But the regulatory process has now been halted by a group of retail operators who initiated an action known as 'recurso de amparo' in most legal systems of the Spanish-speaking world to prevent the Buenos Aires City Lottery (LOTBA) from registering potential operators. In February, before the COVID-19 pandemic burst in Argentina, the city government opened an application process for those firms interesting in offering online wagers in the city, pursuant to the 2019 law.

The statute establishes that, in order to avoid monopolistic practices, companies that already hold land-based licenses are barred from participating in the online arena. This provision affects the operators of the riverboat casinos in the Puerto Madero neighborhood and those who operate slot machines in the Hipódromo Argentino de Palermo racetrack.

But in light of the restrictions put in place to mitigate the spread of the coronavirus, both the Puerto Madero casino and the Hipódromo Argentino de Palermo had to close their doors.

Forced to cover payroll and other business costs, these companies decided to initiate legal proceedings to suspend the application process set in motion by LOTBA. Although initially, a trial court dismissed their petition, a federal judge overturned Monday the lower court’s decision.

The land-based operators assert that “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 scope of the City of Buenos Aires”.