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, chaired by María Galván del Puerto, annulled the resolution and the contract that intended to “regularize” slot machines in places banned throughout the country. The original contract received considerable public backlash. A number of Conajzar executives and others faced allegations of criminal activity.
Initially, iCrop received authorization to install the slot machines in wineries, pharmacies, hairdressers and markets in violation of federal law. That contract with iCrop attempted to “legalize” what the same law of the sector prohibits.
Conajzar gave iCrop the contract in 2020, and criticism over its legality has been percolating since June of 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 that prohibits 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 the implementation of 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, as of April, there were still around 23,000 illegal slot machines in operation. Municipalities are taking action, however, and stripping out the machines when they find them.
The Municipality of San Lorenzo reported last week that it seized 18 slot machines. 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 having been notified, are violating the Executive Decree. As a result, she asserted that authorities are now working to identify the illegal slots in order to confiscate them.
About 150 commercial premises in the municipality have already received notification to comply with the provisions. In some cases, businesses received 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 the amount of resources it dedicates to locating the operations. It also threatens to revoke the operating permit of the commercial activity the business owner conducts legally if he or she continues to operate the slot machines.
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