Puerto Rico’s Gaming Regulator Cracking Down on Illegal Gambling Outfits

Posted on: April 15, 2022, 05:48h. 

Last updated on: April 15, 2022, 12:21h.

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

There’s a dispute raging in Puerto Rico over who’s allowed to operate what type of gaming machines. The Puerto Rico Gaming Commission (PRGC) hopes to show who is in charge by giving violators hefty fines.

slot machines
A man plays a slot machine in a store in Puerto Rico. A battle is brewing between stores and the gaming regulator over who can operate the machines. (Image: Nimb)

Puerto Rico is updating its gaming laws, which won’t be an easy task. For too long, lax controls meant a lot of leeway in what type of businesses could host gaming machines. The Puerto Rico Gaming Commission is exerting its authority in an attempt to demonstrate who is in charge.

From February to now, the PRGC has uncovered 221 illegal slot machines. It asserts that thanks to its efforts against the operation of “illegal gaming machines,” it has issued fines amounting to $1.2 million against the offenders.

A total of 19 establishments hosted the machines and have received sanctions from the PRGC. The commission is responsible, among other things, for the inspection of slot machines that may violate Puerto Rico’s gambling laws.

PRGC Takes Control

The cycle of operations began on February 4, when government inspectors made a surprise visit to the Market Square in Santurce in San Juan. There, they found illegal gambling machines in two shops.

In one of the establishments, the authorities found ten machines that operated without licenses. This resulted in the property owner receiving a fine of $50,000.

That was just the beginning. A business in Bayamón, a suburb of San Juan, received the largest fine yet. Inspectors found 60 unlicensed slots, leading to a fine of $300,000. Another establishment, located in Bayamón, was stuck with a $110,000 fine for its unlicensed gaming machines.

In addition, Orlando Rivera Carrión, head of the PRGC, warns that the commission will “continue its direct assault” against illegal and unauthorized gaming. Violators face fines ranging from $5,000 to $10,000 per device.

Controversy Over Gaming Laws

Among inspectors’ main findings are machines in excess of what is established by the commission (ten per business) or having machines in operation at a distance of less than 100 meters (328 feet) from an equestrian agency. In addition, inspectors are finding a lot of unlicensed gaming equipment.

Rivera asserts that at this stage, the commission is not seizing the illegal equipment. If the inspectors return to the business found in non-compliance and find that the machines are again in operation, the fine will increase significantly. In addition, he warns that the operations will continue throughout the US-controlled territory.

The actions, however, aren’t without controversy. A union representing local businesses, the Union of Road Machine Operators (UNOMAR, for its Spanish acronym), has criticized the commission. It alleges that the PRGC’s enforcement efforts put small merchants at risk.

PRGC ‘Illegally’ Licensing Machines

UNOMAR, which represents around 30 companies, said that the commission continued to issue certifications illegally to operators of unqualified gaming machines while fining legal operators. The union accuses Rivera of trying to paralyze the actions that seek to regulate the gaming industry.

UNOMAR emphasizes two regulations, 9174 and 9175. They are, respectively, the Regulations for the Operational Control and Interconnection of Gambling Machines en Route and Regulations for the Issuance, Handling and Supervision of Licenses for Gaming Machines.

Both regulations were challenged in court on the grounds that the PRGC illegally approved them. In addition, the commission’s actions came before the Fiscal Oversight Board had a chance to conduct its review of the language.

UNOMAR added that the regulations, passed in May 2020, seek to benefit only large corporations. They present obstacles to be certified for small local merchants who legitimately operate gambling machines.

Puerto Rico’s court system hasn’t been able to agree on who can introduce what regulations, either. The gaming machine topic has gone from one court to another, all the way up to the Supreme Court. The high court froze the regulations, but UNOMAR asserts that the PRGC ignored the order.

The commission asserts it is cracking down on illegal and unlicensed operations. However, UNOMAR feels it is acting only with its self-interests in mind.