Paraguay is close to determining who will control sports betting in the country for the next five years. By the end of the day today, the country’s gaming regulator may have selected a single operator to control a multimillion-dollar business.
The National Gaming Council of Paraguay (Conajzar, for its Spanish acronym) is in the process of receiving the bids this morning. It will then select one as part of the public bidding process for the introduction of sports betting in the country.
Six companies are bidding for the five-year exclusive, and at times controversial, license. The winner will be in charge of a business that Paraguay estimates will be worth over $500 million over the life of the contract.
Contentious Battle For Control
In accordance with the agenda disseminated by Conajzar, the deadline for the presentation of proposals was 09:30 this morning. Starting at 10:00, the regulator began reviewing the bids.
In order to submit a bid, companies first had to acquire a list of the terms and conditions, a measure that cost them each around $8,260. Only six companies sought control of the market.
Among these was the current concessionaire Daruma Sam, which operates under the Apostala brand. In addition, Jockey Club del Paraguay, BGaming, 7 Saltos and two others are vying for control.
Winding up the bidding process, Conajzar made some changes to the regulations that will govern the next phase of operations. Specifically, it wants to ensure the operator doesn’t try to keep more money than it should.
Per standing regulations, the first time the regulator uncovers an accounting discrepancy, the operator could face a fine of 200% of the difference. A second offense will result in a fine of 300% of the amount. If there’s a third, the regulator may terminate the contract.
However, Conajzar changed its stance. In the event of a false declaration, it now has the right to terminate the contract immediately. However, it gave the operator an out at the same time. It said that it won’t consider discrepancies that result from arithmetic errors as being an attempt to defraud the state.
The commission does not describe what will be considered an “arithmetic error” or a “false statement.” As such, the language is just generic and gives Conajzar a lot of flexibility in applying the rules.
In addition, the operator will have to present its balance sheet immediately at the close of the fiscal year. It must include a corresponding external audit.
Some Gaming Stakeholders Unimpressed
Some industry stakeholders questioned Conajzar’s bidding framework, including the price of initiating the process. There were no complaints from any of the candidates about bookmakers acting outside the law or offering sports betting with total impunity and without paying taxes to the country.
Another entity raised those questions previously. The Paraguayan Chamber of Games of Chance called out the regulator for its procedures last month. It said Conajzar needs to do more to prevent illegal gambling. However, the unregulated segment continues to have a presence in the country.
The revenue Paraguay receives from legal sports betting will continue to be distributed as before. 50% goes to the National Secretariat of Sports, and the remaining 50% will be divided among other entities. These include Diben, the country’s national social welfare system, the municipalities and local governments and the Public Treasury.
Conajzar data shows that Paraguay’s legal gambling market generates a total of around $1.65 million per month. Of this, Diben, which oversees the country’s health industry, receives about $496,080 million per month.
There’s no indication whether Daruma will lose its position. With the FIFA World Cup coming up next month, other companies may have offered a premium in order to challenge the incumbent.
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