Paraguay Could Issue Exclusive Sports Betting License by Day’s End

Posted on: October 31, 2022, 09:26h. 

Last updated on: November 23, 2022, 02:13h.

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

Paraguay is close to determining who will control sports betting in the country for the next five years. By the end of the day Monday, the country’s gaming regulator may have selected a single operator to control a multimillion-dollar business.

Lopez Palace In Asuncion, Paraguay
Lopez Palace in Asuncion, Paraguay, the seat of the national government. Paraguay’s gaming regulator could announce the winner of a new five-year sports betting operator contract on Monday. (Image: Dreamstime)

The National Gaming Council of Paraguay (Conajzar, for its Spanish acronym) is receiving bids on Monday morning. It will then select one bidder to institute 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 more than $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 Monday morning. Starting at 10:00, the regulator began reviewing the bids.

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 the Apostala brand. Jockey Club del Paraguay, BGaming, 7 Saltos, and two others are also 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.

Conajzar has since changed its stance. In the event of a false declaration, it now has the right to terminate the contract immediately. At the same time, it’s given the operator an out — it said that it won’t consider discrepancies that result from arithmetic errors as being an attempt to defraud the state.

The commission doesn’t describe what will be considered an “arithmetic error” or a “false statement.” As such, the language is just generic and gives Conajzar flexibility in applying the rules.

The operator will have to present its balance sheet immediately at the close of the fiscal year and 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 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, with 50% going to the National Secretariat of Sports and the remaining 50% divided among other entities. These include Diben, the country’s national social welfare system, the municipalities and local governments, and the Public Treasury.

Conajzar’s 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 in November, other companies may have offered a premium in order to challenge the incumbent.