Paraguay Lawmakers Bring to a Halt Slot Machine Expansion Following ‘Illegal’ Deal

Posted on: April 4, 2022, 05:55h. 

Last updated on: April 4, 2022, 11:08h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

The number of slot machines in Paraguay is likely to be cut significantly in the near future. The approval of a new bill by the government highlights “illegal” acts by the country’s gaming regulator and restricts its power.

Paraguay Senate
Paraguay’s Senate in session. Senators have approved a new bill to further detail its gaming regulator’s authorities and limit slot machine availability. (Image: BNAmericas)

Paraguay’s gaming regulator, the National Gambling Commission (Conajzar, for its Spanish acronym), doesn’t have complete control over gambling in the country. That’s the message Senate lawmakers sent late last week.

On Friday, the Senate approved a bill that establishes measures to protect minors from the influences of slot machines. The initiative aims to prohibit the operation of the devices in all non-exclusive gambling sites. This includes bars, warehouses, shops, and others. The legislation is on its way to Paraguay’s President, Mario Abdo Benítez, for promulgation or veto.

The bill will strip a lot of businesses of some extra income, however, according to the lawmakers.

Paraguay’s Sliding Slot Market

The initiative emerged in the middle of last year after journalistic investigations showed that Conajzar, then chaired by José Antonio Ortiz Báez, signed a direct contract with a company, “iCrop SA,” that it shouldn’t have. The contract aimed to “legalize” the use of slots in non-exclusive gambling shops.

However, that was beyond the regulator’s authority. The main criticisms came because this maneuver violated Paraguay’s Law No. 1016/97 on gambling, which precisely limits the operation of these machines. They can only be used in exclusive locations approved for gambling and within the municipalities’ exploitation and control.

Another aspect questioned was the fact that iCrop charges G300,000 (US$43.29) per machine per month. According to the questioned contract, the commitment is to “regularize” 50,000 slots. As a result, the expected revenue would be US$2.1 million. Of that amount, 70% (US$1.5 million) would go to the private company.

Senate Steps In

After the news broke last year, the Senate stepped in. It had dealt in a first-round with the bill to reaffirm the limitations on the use of slots. The Chamber of Deputies approved the initiative, returning to the Senate.

Then, on Friday, the Upper House approved the text. In essence, the document ratifies the provisions of the gambling law and establishes sanctions for violators.

Authorities and former members of Conajzar, including the head of the Directorate of Charity and Social Assistance (Diben, for its Spanish acronym), are being prosecuted by the Public Ministry. Eight individuals, including former Conajzar president José Antonio Ortiz Báez, allegedly orchestrated or benefited from the agreement with iCrop. They face charges related to the contract with the company, among other reasons.

In addition, a couple of them face charges for their involvement in awarding a lottery license to a company that owed money to the government. The cases are still active, with verdicts and sentences still pending.