Regulation

ALEA criticises federal gambling tax increase in Argentina

2 minutes read
The Association of Argentina’s State Lotteries (ALEA) attacked government plans to increase taxes on online gambling from 2% to 5% of stakes.

The government’s minister for the economy, Martín Guzmán, recently announced the change as part of the measures set out in the 2021 national budget, designed to shore up the country’s finances in the wake of the novel coronavirus (Covid-19) pandemic.

ALEA strongly opposes the tax hike, offering several reasons why increased tax levels would harm the industry.

It stated that any tax on gambling at a federal level favours the growth of illegal or clandestine gambling, by increasing tax pressure on the regulated sector.

It argued that federal taxation also violates the constitutional powers of the provincial jurisdictions, and the autonomous city of Buenos Aires, as it takes control of gambling from the regions in favour of national government.

It went on to claim the tax increase would have a negative effect on local economies, as it reduces provinces’ gambling income, and therefore decreases the funds allocated to good causes in each.

While it claimed not to oppose the adoption of measures to prevent illegal gambling at federal level, it warned that raising the tax on legal online gaming would have little effect in combatting illegal activity.

Most provinces, it noted, were either consider or moving towards regulating the channel in the wake of Covid-19.

It pointed out that the official gambling sector in Argentina generates some 240,000 jobs, including in gambling venues, official retailers, regulatory bodies and service providers. These entities already play tax in line with their respective national, provincial and municipal laws, as a sector of the formal economy, ALEA said.

In contrast, it said, clandestine gambling does not carry any tax burden, employs people in the black market and takes advantage of existing legal loopholes to commercialise gambling.

The city of Buenos Aires was the first region in Argentina to formalise its online gambling licensing requirements, having approved regulations for igaming in February this year.

In October 2020, Codere became the first operator to take significant steps towards securing a licence, as its proposal was approved by the Lotería de la Ciudad de Buenos Aires (LOTBA), the city’s lottery operator and de-facto regulatory body for online gambling.

The next phase in the licensing process will see it begin to execute the strategy set out in its proposal, including technology development and integrations to its igaming platform, to ensure its solutions are compliant with the city’s igaming regulations.

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