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Slot operators: ‘We’re not to blame for casino loses’

Illegal gambling halls are taking a bite out of the highly regulated casino industry, execs say. (Credit: © Mauricio Pascual)

Illegal gambling halls are taking a bite out of the highly regulated casino industry, PRHTA officials say. (Credit: © Mauricio Pascual)

The president of the Union of Electronic Machine Operators (UDOME by its Spanish acronym), Rafael Hernández-Cañete, said Wednesday they are not to blame for casino revenue losses as a result of illegal slot machines, as the Puerto Rico Hotel and Tourism Association claimed recently.

He further said the allegations are “incorrect and illogical,” citing a study the group commissioned earlier this year.

“I will start by reminding the PRHTA that the slot entertainment machines sector, operated by hundreds of small and medium sized local businesses, has no effect on tourism or hotels that operate casinos because it is obvious that these markets cater to a radically different clientele,” he said. “Moreover, UDOME operators are completely legal, and pay patents and taxes, as they well know.”

A study by economist and professor at the University of Puerto Rico in Mayagüez — which UDOME paid for — presented at the legislature earlier this year — found that the closing of casinos is due to factors such as the economic recession in the U.S., which reduced tourist arrivals, the local depression since 2006, and poor management of the tourism industry in Puerto Rico.

“In the last three years, Puerto Rico has had three directors of the Tourism Company and three different promotional campaigns. This inconsistency, combined with the lack of leadership in this industry, can explain the deterioration in competitiveness, especially when compared to neighboring countries like Peru, Cuba, Dominican Republic and Panama, among others. If they are losing competitiveness it certainly is not because of the slot machines,” said Alameda in his study.

Casino clientele is composed of tourists and residents who are not casual gamers, the study showed. Tourists account for one-third of the players and the hotels still control 75 percent of the bets on the island. In contrast, adult entertainment machine, which are located mostly in small businesses have a customer profile completely different from the casinos, the trade group said.

“Our slot machines have not undermined the entertainment market for hotels, but quite the opposite. The hotels have invaded the market of entertainment machines looking for more customers,” said the study.

UDOME has spent months lobbying for the connection of their slots machines to the Treasury Department as an effective mechanism to raise an additional $23 million to be distributed among 33 of the island’s poorest municipalities that have suffered substantial population loss in recent years.

This reaction is the latest chapter in an ongoing saga, which has pitted hotel casino operators against adult entertainment slot machine owners.

Two weeks ago, as this media outlet reported, the Tourism Company said it would be revisiting casino rules and the issue of legalizing slots operating outside casinos.

Author Details
Author Details
Business reporter with 29 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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