Gov. Ricardo Rosselló signed the Puerto Rico Betting Commission Act, which for the first time authorizes betting on sporting events, electronic games and fantasy competitions on the island. This includes online bets that originate in Puerto Rico.
“With the signing of this law, we prepare to witness the potential it provides to make Puerto Rico a state-of-the-art jurisdiction while benefiting the local economy. With this legislation, the island can be marketed nationally and internationally as an attractive destination for betting on sporting events,” he said.
It is estimated that this industry could generate more than $3 billion annually by 2023 in the United States.
In addition to sports betting, the law authorizes betting on fantasy league and eSports events. This segment, which is not highly regulated in other U.S. jurisdictions, allows bets on competitive electronic games or video game events, such as Street Fighter, Super Smash Bros., Fortnite, Rainbow Six and Gears of War.
It is estimated that the global eSports audience is more than 400 million people and that its global economic impact will exceed $3 billion by 2023, La Fortaleza said.
On the administrative side, the law creates a new Betting Commission, in line with the model set up by other states that have adopted this type of legislation. The commission, composed of seven members representing the public and private sectors, will be the government entity responsible for regulating sports betting, equestrian sports, eSports and gambling.
The commission absorbs the current Horse Racing Industry Administration and the Puerto Rico Tourism Co.’s Gaming Division. Employees of these entities will go to the new Commission and no public employee will be dismissed as part of the reorganization, La Fortaleza said
Moreover, the legislation provides guarantees so minors under 18 do not participate in these games. Similarly, gaming addiction issues that may arise will be addressed, and “will be adequately controlled to avoid money laundering and tax evasion,” the governor said.
Bets may be placed anywhere authorized by the Commission, such as casinos, racetracks, hotels, hostels, among others.
The new legislation will shore up revenue for the government’s coffers from operating licenses and taxes that will be charged on the plays and prizes. A rate of 7% has been proposed in the case of physical bets and 12% on online bets.
Sports betting licenses at authorized horse racing agencies will have a 50% discount for the first 10 years.