Amid chaos in the American commonwealth

Puerto Rico legalizes sports betting

"By signing this law, we are getting ready to witness the potential it provides to transform Puerto Rico into a vanguard jurisdiction while benefitting the local economy," the outgoing governor said.
2019-07-30
Reading time 3:16 min
The unincorporated territory of the U.S. will now allow betting on sports, e-games, and fantasy leagues as outgoing Gov. Ricardo Rosselló has signed the Betting Committee Act of the Government of Puerto Rico into law.

Gov. Ricardo Rosselló signed on July 29 the Betting Committee Act of the Government of Puerto Rico, which greenlights an industry whose worth, according to the official press release, is estimated to reach more than $3 billion by 2023.

"By signing this law, we are getting ready to witness the potential it provides to transform Puerto Rico into a vanguard jurisdiction while benefitting the local economy. With this legislation, the island will be able to market itself nationally and internationally as an attractive destination for sports betting events," the governor said via press release.

Rosselló added, "we are betting on this emerging industry by allowing betting on its events. This joins the Governor’s Advisory Council on Video Game Affairs [Electronic Game Leagues & Sports Betting] and the incentives for this industry included in the newly signed Incentives Code."

As previously informed, the council’s members include the Secretary of Public Affairs and the Chief of Staff (both of whom resigned amid the “Telegramgate” scandal that shook the island’s political sphere); the executive director of the Puerto Rico Tourism Co.; the secretaries of Education, Economic Development & Commerce, and Sports & Recreation; and four additional members designated by the governor.

According to the official press release, this industry is expected to generate more than $3 billion annually in the United States by 2023, although the document does not cite any source to back up the claim.

However, THE WEEKLY JOURNAL confirmed that GamblingCompliance—a provider of business intelligence in this industry—projected back in 2018 that the legal sports betting market will be worth between $3.1 billion and $5.2 billion in annual revenue by 2023.

Meanwhile, Rep. Néstor Alonso Vega, who introduced the legislation (House Bill 2038) last April, stated that this new law “positions us in the Caribbean as the first jurisdiction with sports betting.”

In addition to sports betting, the law authorizes betting on fantasy leagues and the emerging segment of eSports. The latter, which is moderately regulated in other U.S. jurisdictions, allows betting on video game competitions, which garner hundreds of millions of viewers annually.

On the administrative side, the act creates a new Betting Commission, in accordance with the model of other U.S. jurisdictions that have adopted this type of legislation. The commission, comprised of seven members of the public and private sectors, will be the government entity responsible for regulating sports betting, equestrian sports, eSports, and gambling.

The commission absorbs the current Administration of the Equestrian Sports Industry and the Gaming Division, which are part of the Tourism Co. The government informed that the employees in these entities will heretofore work under the new Commission and that “no public employee will be fired as part of the reorganization.”

Moreover, the legislation includes a provision that prohibits minors from participating in these games. Likewise, it will reportedly address video game addictions that may arise, as well as money laundering and tax evasion.

Betting activities will be allowed in the Commission’s authorized locations, such as casinos, racecourses, hotels, paradors, among others.

The governor explained that this new legislation will increase the Treasury’s revenue, coming from the operating licenses and taxes that will be collected from plays and prizes. A rate of seven percent has been proposed in the case of physical bets, and 12 percent in digital bets.

These charges and taxes seek to be “extremely competitive” to other jurisdictions, with aims to attract investors to an industry that is currently nonexistent on the island.

The proceeds from this industry would be distributed to help cover the retirement of pensioners and programs aimed at promoting sports among youth; to offer services against gambling addiction; to offer better police equipment; to promote creative industries; and to cover administrative expenses and the new Commission.

In addition, as a measure to complement the income of individuals who partook in cockfighting, licenses will be authorized to those existing pits to be able to accept sports betting. These licenses will be issued free of charge for the first ten years and the benefit will be applicable to any pit that operated legally prior to the approval of the U.S. Farm Bill, which criminalizes cockfighting.

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