Online gaming market access bill awaits governor’s signature
By The Star Staff
A bill is on its way to La Fortaleza that will amend the Gaming Commission Law to strengthen Puerto Rico’s ability to enter the market for online betting on sports events.
Gambling on the events authorized by the new amendments may be carried out physically in island casinos, hotels without casinos, small inns, racetracks, off-track horse racing agencies, galleries and any other place that the Gaming Commission determines that provides security for all parties involved in the industry in order to prevent tax evasion, money laundering and any other criminal conduct.
The Gaming Commission is also authorized to “establish mechanisms to enable bets made online or over the internet through computers, mobile or interactive devices that accept bets through an online gaming system for betting on sporting events, sports leagues and electronic games such as eSports, only by people who are within the territorial limits of Puerto Rico.”
The Commission will be required to use border control technology,” adds the legislation. “All points of sale and mobile applications or internet pages must have the necessary accessibility for people with disabilities.”
In October 1992, the U.S. Congress passed the Professional and Amateur Sports Protection Act (PASPA) prohibiting gambling on sporting events in the United States. Although the ban did not have the effect of eliminating the illegal practice of gambling, it did prevent most states and their territories from regulating the industry. After 25 years of PASPA, the U.S. Supreme Court, in the 2018 case Murphy v. National Collegiate Athletic Assn., declared the ban unconstitutional, prompting states to introduce legislation to legalize sports betting in their respective jurisdictions.
Following the decision, Puerto Rico’s government saw an opportunity to insert itself into new trends and achieve new revenue streams from sports gambling. It created the Puerto Rico Government Gaming Commission Law to regulate betting on sporting events, in electronic game leagues such as eSports and in Fantasy Contests, both physically in authorized places and through mobile applications and the internet.
Money from the new industries will go to the government pension plan, the Puerto Rico Police, the Municipal Improvements Fund, programs for the development of sports, My Future accounts for childhood education and for the Mental Health and Anti-Addiction Services Administration’s Help Program for Compulsive Gamblers.
To help prevent money laundering, the legislation will require individuals engaging in sports betting for the first time to do so in person in an authorized establishment. After the initial in-person registration, the player will be authorized to place a bet online or in any other form.
Players will have to pay a 7 percent tax on the bets.
The legislation changes the definition of authorized operator to mean an entity with a franchise authorized by a license issued by the Gaming Commission to accept and pay for sports bets, either in person within an authorized place or through a mobile sports betting platform, within the territorial limits of Puerto Rico.
For the purposes of the proposed amendments, hotel casinos and racetracks may not be considered satellite structures, while hotels without casinos, inns, off-track horse racing agencies and “galleras” may be considered satellite structures for sports betting.
During recent testimony before the incoming government’s transition committee, Gaming Commission Executive Director José Maymó Azize said the commission was only a few steps away from filing regulations with the island State Department that will govern e-sports betting. Since May of this year, the commission has been receiving advice from Gaming Laboratories International (GLI), a company that provides testing, certification and professional services to the global gaming industry, and whose clients are gaming regulators, providers and operators in 480 jurisdictions around the world.
“We worked hand in hand at the commission and with GLI, to formalize, through its approval, the regulations for sports betting, fantasy sports and e-sports,” Maymó Azize said. “The regulations were divided into two: the Puerto Rico Sports Betting Regulations and the Puerto Rico Fantasy Contests Regulation.”