Uruguay Presents Slot Machine Regulation Bill to Combat Illegal Gambling

Uruguay takes a significant step in the fight against illegal gambling by introducing a groundbreaking bill to regulate slot machines. Senator Sergio Botana‘s initiative is a bold move to bring order to the unregulated slot machine landscape, with plans to limit the maximum number of operational slots to 25,000. This comprehensive proposal, currently under the scrutiny of the Senate Finance Committee, seeks to define legal parameters for slot machine operations, including commercial premises, operator criteria, tax structures, and gaming program certification.

In a determined effort to combat illegal gambling activities, Uruguay has set the wheels in motion to introduce a bill aimed at regulating the operation of slot machines across the country. Spearheaded by Senator Sergio Botana from the National Party, this legislative initiative has been presented to the Senate Finance Committee on November 21, with discussions anticipated in the coming weeks, possibly before the year’s end.

The need for such regulation becomes evident when considering that Uruguay currently houses an estimated 40,000 to 50,000 slot machines, operating without any formal oversight. This situation has sparked a contentious debate between the General Directorate of Casinos (DGC), which deems these operations illegal, and the machine owners, organized under the Uruguayan Chamber of Entertainment (CUDE), who hold an opposing view.

According to reports from local media outlet El País, the proposed bill outlines a framework that permits the commercial exploitation of slot machines. It specifies that these machines can be installed in authorized commercial premises primarily engaged in businesses such as canteens, pubs, lounges, bars, restaurants, and hotels with up to three stars. Moreover, the bill imposes a strict maximum limit of 25 machines per commercial establishment.

The proposed slot machine regulation bill aims to strike a balance by considering various factors like the operator’s age, the amount of guarantee, permit costs relative to the number of machines requested, among others. It prescribes that each operator should be awarded a minimum of 50 machines and a maximum of 500 machines. Additionally, only natural persons registered with the General Tax Directorate (DGI) and the Social Security Bank (BPS) are eligible to operate these machines. These individuals must demonstrate financial stability, suitability, and continuous involvement in this activity for the past six years from the enactment of the law.

The bill also incorporates measures to ensure that only individuals with clean criminal records can own or operate these businesses. This precautionary step is intended to safeguard against the entry of potentially harmful foreign entities involved in criminal activities like drug trafficking and money laundering.

Furthermore, it mandates all slot machine owners to form a collective body responsible for identifying authorized permit holders. These entities must fulfill their fiscal obligations, including prize payouts and guarantees, thus establishing a system akin to that of Pool Banking.

The proposed regulations entrust the Technological Laboratory of Uruguay (LATU) with the task of certifying that gaming programs meet specific requirements, ensuring that the public’s return percentage does not fall below 85 percent.

Among the bill’s provisions is the establishment of a registry for slot operators, manufacturers, electronic machines, authorized games, and exploitation contracts. This registry will be under the jurisdiction of the General Registry Directorate of the Ministry of Education and Culture. Additionally, each slot machine will be assigned a non-transferable license plate number, facilitating easy identification.

From a taxation perspective, the bill proposes a flat tax rate of 15 percent on the profit generated by each slot machine. Of this tax, 12 percent will be allocated to a Municipal Development Fund, responsible for enabling premises and overseeing activities. The remaining percentages will support the operation of the collective body, the Technological Laboratory of Uruguay (LATU), and the Ministry of Education and Culture (MEC).

Senator Botana emphasized the significance of this legislative initiative, noting a growing awareness of the risks associated with unregulated slot machine operations and a shift in public sentiment towards regulation. This bill aims to establish a robust framework that not only combats illegal gambling but also promotes responsible and transparent slot machine activities in Uruguay.