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Uruguay Plans to Ban Online Gambling

Uruguay has commenced the legislative process that would see the implementation of a ban on the provision of online gambling services by international operators, local media reported. This announcement comes a month after reports emerged that an iGaming crackdown was considered by lawmakers.

The country’s Chamber of Deputies has recently passed a bill that practically bans the provision of online table and slot games as well as of poker by international unlicensed operators. The legislative effort is part of a larger legislation package that aims to introduce greater transparency in the way financial transactions are performed within the country’s borders.

Details on how and when exactly the new law would be implemented are yet to emerge. What is known so far is that foreign online gambling operators will no longer be able to serve local players, or rather not in a legal manner.

Uruguayan officials have also decided to introduce certain changes in the way legal gambling services are taxed. Land-based casinos will be required to pay an income tax on slot machine and table game payouts in addition to existing taxes.

The online gambling ban was what came as a bit of a surprise, given the fact that reports from the past several years suggested that Uruguayan politicians have been considering relaxing their stance on the provision of that type of service. Many believed that a regulatory framework for licensed operations could be crafted, given the popularity of gambling services, and iGaming ones in particular.

International operators have been operating in Uruguay’s gray market for years now, due to the lack of proper regulations. With several exceptions, legal gambling services in the South American country are conducted by a state-run operator and its subsidiaries, despite previous efforts for the legal status quo to be changed in favor of a more liberal system.

According to a recent report from the Uruguayan Casino Control Commission, stakes placed at local casinos amounted to more than U$6 billion in 2016, up 6.5% year-on-year. Demand grew for products like Lottery and Supermatch, wagers on which totaled U$10.8 billion last year, reflecting an increase of U$281 million from a year earlier. It is believed that the country’s unregulated market could be even larger.

Discussions about the potential legalization of online gambling surfaced last spring, but were met with vocal opposition from the country’s brick-and-mortar casinos. The country’s National Federation of Gaming (Federación de Trabajadores de Juego) also joined the legislative effort’s opposers, claiming that the legalization of iGaming services would see millions of dollars leaving the country and going to offshore operators.

Unlike Uruguay and its latest intentions to block online gambling, Colombia, another South American jurisdiction, has recently opened its market for regulated iGaming. A local operator was granted the first online gambling license from the Colombian gambling regulator, while first companies of a specially prepared blacklist were blocked from the country.