Bolivia’s New Gambling Laws Could Bankrupt Casinos With 30% Tax Hike

In the first week of March, 2011 Bolivia’s long awaited gambling framework will take effect after the government’s final approved of the last two gambling decrees. The main contention point, as elsewhere in the world, was over taxes and the exact powers of the new gambling regulatory agency.

Last year, Congress approved the updated Bolivian gambling laws which call for higher taxes as well as much stricter regulation over all gambling businesses. Gambling Bill 971 raised gross revenue tax of all gaming establishments by 30% as well as added an addition 15% tax on all winnings by casino patrons.

In early February, the Cabinet of Ministers approved the two decrees setting the stage for further protests from both casino employees as well as casino operators. Mario de Alcázar, a spokesperson for Bolivia’s Bolivian poker rooms said– ‘As workers, we are simply asking that the government let us work, given that in March we will be without employment and left to go hungry.’

Both employees and casino operators support stricter gambling industry regulations and enforcement but are firmly against casino operators taxes a proportion of their gross revenues and instead support a ‘per-machine’ flat tax.

The President of Bolivia, Mr. Evo Morales, decided to tighten the gambling laws after multiple corruption related scandals almost toppled his government Last year, the Minister of Health resigned from President Morales Cabinet, after corruption charges were filed against him for allegedly accepting multi-million dollar bribes in exchange for renewing the license of one of the country’s top casinos. The Ministry of Health was previously responsible for regulating Bolivia’s gambling industry.

The new gambling regulatory agency will be called the Gaming Control Authority (Autoridad de Fiscalización y Control Social del Juego [AJ]) and will be responsible for all lotteries, and games of chance within Bolivia, and will be under direct supervision of the Ministry of Finance. AJ will also be in charge of all technical issues that influence gambling, including Bolivian internet casinos.

Casino operators as well as industry analysts unanimously agree that the combined effect of the steep tax increase will force the majority of casinos, sports books and poker rooms in Bolivia to close, resulting in a loss 3,500 jobs, as well as an increase of organized crime operated underground casinos.