Gaming Commission waiting for $3.5M to ‘straighten out’ illegal slots industry
After winning an appeal of a lawsuit related to the oversight of adult gaming slot machines, the Puerto Rico Gaming Commission is waiting for its share of $3.5 million from the Puerto Rico Treasury Department, from the $6 million earned this term to hire staff and straighten out the sector, agency officials said.
The San Juan Court of Appeals determined that the Gaming Commission regulations that oversee the operation of slot machines are valid and establish the charge for licenses to operators of these equipment, that are operated outside authorized casinos.
The decision, dated Nov. 29, revokes a ruling by the Superior Court of San Juan that declared regulations 9174 and 9175 null and void, both of 2020, which were challenged by a group of illegal machine operators.
The judgment also ratifies the power granted to the Commission by Act No. 11 of 1933, the Gaming Machines Act, to regulate and impose administrative and criminal sanctions against businesses that operate slot machines illegally.
“We urge businesses to legalize the operations of their equipment, through a gaming machine operator duly certified by the Commission,” said the Gaming Commission Executive Director Orlando Rivera.
“The merchants are also exposed to the payment of fines, ranging from $5,000 to $20,000, to the confiscation of the machines and to criminal prosecution, which carries penalties of six months to a year in jail,” said Rivera.
Last February, the Commission issued the first 100 licenses to operators who underwent the licensing process and were declared wholesale owners.
The minimum cost of a license is $150,000, since by law the wholesale owner must own a minimum of 100 machines, and each of the tags that must be attached to the machine’s costs $1,500, and an operator can have a maximum of 250 machines.
After the certification of the operators, Electronic Games filed a lawsuit against the Commission in which it alleged that the agency lacked the legal authority to adopt regulations, because the regulatory process began under the Puerto Rico Tourism Co., which regulated formerly gambling.
The Commission is currently giving operators the option to come current with their licenses through a payment plan of three installments to avoid forcing them to terminate their operations.
Their plan is to automate the slot machine industry with newer machines in the upcoming years and eventually, the Commission expects its operators to buy those machines and will give them permission to have their “old” machines if they pay.
Those who operate machines without the required license will be summoned by the Police, to go to court, for violation of the Gaming Machines Act.
These merchants risk being criminally prosecuted for the commission of less serious crimes, and serious if they are repeated offenders, as provided in the statute that legalized the machines on the road, the Commission explained.
Although it is difficult to calculate the number of unauthorized machines, it is estimated that they could reach 85,000 throughout the island.
