Paraguay Ends Ties with iCrop After Outcry Over Illegal Gaming Contract

Posted on: June 20, 2022, 05:22h. 

Last updated on: June 20, 2022, 02:31h.

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

Paraguay’s gaming regulator has officially severed its arrangement with iCrop, a company that received permission to operate gaming equipment where it isn’t legal. The National Gambling Commission (Conajzar, for its Spanish acronym) already halted the deal but hadn’t formally canceled iCrop’s contract until last week.

Conajzar contract with iCrop
The order that voids Conajzar’s contract with iCrop. Paraguay’s gaming regulator officially stands against the company after previously authorizing it to operate slot machines in the country. (Image: Conajzar)

Conajzar, chaired by María Galván del Puerto, annulled the resolution and the contract to “regularize” slot machines in places banned throughout the country. The original contract received considerable public backlash. Several Conajzar executives and others faced allegations of criminal activity.

Initially, iCrop received authorization to install the slot machines in wineries, pharmacies, hairdressers, and markets, violating federal law. That contract with iCrop attempted to “legalize” what the same sector law prohibits.

Long Overdue

Conajzar gave iCrop the contract in 2020, and criticism over its legality has percolated since June last year. In addition, legislators asserted that the initiative would facilitate money laundering, leading to an investigation by the Public Ministry.

Javier Balbuena, former president of Conajzar and legal advisor to the sector, stated that the new provision of the commission is based on an opinion of the Attorney General’s Office. That opinion is the interpretation of the law prohibiting the installation of slot machines in places of public access.

Lorena Rojas of the Paraguayan Association of Gambling Operators (Apoja, for its Spanish acronym) used the controversy to highlight the lack of legal security in the country, particularly in the entertainment industry.

In defending her position, she stressed the absurdity of the bureaucratic system. She pointed out that it took implementing a new law to revoke a contract awarded illegally. Rojas stated that Conajzar set a precedent of “issuing a resolution because another law had to be enacted ratifying what already exists.”

Illegal Operations Still in Place

Despite the backlash and the year-long power struggle, around 23,000 illegal slot machines were still in operation as of April. Municipalities are taking action, however, and stripping out the machines when they find them.

The Municipality of San Lorenzo reported that it seized 18 slot machines last week. This followed a police sweep to locate the equipment.

A couple of weeks ago, the Municipality of Villarrica renewed its commitment to comply with the law. Betis Ortiz, head of a tax division of Villarrica, acknowledged that many owners or managers, despite being notified, are violating the Executive Decree. As a result, she asserted that authorities are now working to identify the illegal slots to confiscate them.

About 150 commercial premises have already been notified to comply with the provisions. In some cases, businesses receive multiple notifications. However, they continued to operate the machinery on the site without the corresponding authorization.

Previously, the authorities of the city of Asunción reported that they seized 27 slots. These operated clandestinely in unauthorized businesses in a municipal market. However, those raids only resulted in other illegal operations scattering to avoid detection.

As a result, the city has increased its resources for locating the operations. It also threatens to revoke the operating permit of the business owner’s commercial activity legally if he or she continues to operate the slot machines.