Legal view: Regulatory movements in Argentina

2020 will be definitely remembered as a turning point in our personal and professional lives, including our approach to doing business. Lockdowns and other Covid-19 related measures have played a major role in this change. Every change entails opportunities, and while lockdowns have had a substantial impact on face-to-face activities, they have also boosted online activities in all sectors of the economy.

In this line, and although I strongly believe in the importance of face-to-face meetings, 2020 has taught us many ways of interacting in a more efficient way. From attending industry-related events from one’s home, reducing our carbon footprint and allowing us to spend more time with our families, to doing the groceries while watching our favourite TV show, a movie or a series.

As for the entertainment and gaming industry, all land-based activities have taken a substantial hit and are struggling to cope with any additional measures that may be adopted in 2021. On the other hand, the online gaming sector has been able to balance the consequences derived from the cancellation of sports events and, in some cases, even thrive during 2020.

Argentina has been no exception to this. While land-based gaming has suffered from the closures and is currently struggling with restrictions in visitor capacity, the online gaming sector has increased significantly. This has happened in various ways. Some jurisdictions launched tenders and/or authorised the offering of gambling products to land-based operators, while others completed tenders that were ongoing and some approved regulations. We will briefly address these situations below.

For anyone that is not familiar with Argentina, the country is organised under a federal model in which the regulatory competence in connection with gambling resides in the 23 provinces and the city of Buenos Aires.

City of Buenos Aires

Through Resolution No. RESDI-2020-15-GCABA-LOTBA dated 20 February 2020, as amended, a tender for the granting of online gaming agency permits was called (“BA City Tender”). The BA City Tender is aimed at national and/or foreign individuals and/or corporations meeting the following requirements:

• at least two years proven experience in online sector (gaming/gambling; electronic commerce; online operations in which users have an interactive relationship with a platform; data transmission through telecommunications networks);
• proven revenue related to the activities listed above for the amount of ARS100,000,000 (approximately £843,359) in the last commercial year; and
• a net worth of $25m (£18m) in the last commercial year.

LOTBA, the regulator of the city of Buenos Aires, has issued additional regulations to allow the filing of documents without mandatory formalities and avoid the BA City Tender being slowed down by Covid-19 related measures preventing potential applicants from applying for permits (i.e. impossibility to notarise copies of documents, apostille documents, securing translations to Spanish, etc).

The permits are set to have a validity period of five years, renewable for an equal term at the request of permit holders and at LOTBA’s discretion.

The BA City Tender is currently ongoing and no permits have been issued so far. Pursuant to the regulatory framework, go live shall happen once three permit applications have been duly processed and approved by LOTBA. This is set to happen during Q1 2021.

Province of Buenos Aires

2020 ended with excellent news to some of the major online gaming operators in the world. Through Resolution No. 795-IPLYCMJGM-2020, published in the Official Gazette of the Province of Buenos Aires on 31 December 2020, the tender that was approved in 2019 formally concluded and seven online gaming licences were awarded.

Licenses have a non-renewable term of 15 years. The winners are:

• “ARGENBINGO S.A. – WILL HILL LIMITED S.A. SUCURSAL ARGENTINA (UT)”;
• “HILLSIDE (NEW MEDIA MALTA) PLC [bet365] – PASTEKO S.A. (UT)”;
• “HOTEL CASINO TANDIL S.A. – DYNAMO TYCHE S.A. – PLAYTECH SOFTWARE LIMITED (UT)”;
• “CASSAVA ENTERPRISES (Gibraltar) LIMITED [888] – BOLDT S.A. (UT)”;
• “ATLANTICA DE JUEGOS S.A. – STARS INTERACTIVE LIMITED (UT)”;
• “BINBAIRES S.A. – INTRALOT INTERNATIONAL LIMITED (UT)”;
• “CASINO DE VICTORIA S.A – BETSSON MALTA HOLDING LIMITED (UT)”;

Unlike the BA City Tender, the province of Buenos Aires required foreign companies to partner up with local land-based operators through a contractual joint venture, called Unión Transitoria.

At this stage, the licensees are working to implement the technical projects that were included in their proposals and obtain the final certification reports.

Operators are expected to go live in Q1 2021/Q2 2021.

Other jurisdictions

Neuquén

This jurisdiction had already regulated online gambling. Through 2020 it awarded further authorisations to land-based operators to offer certain online gambling products. Offering is limited to the municipalities where each land-based operator conducts business as well as any other municipalities within this province where there are not any land-based operators.

Mendoza

Online gambling has been regulated through Law No. 9267, published in the Mendoza Official Gazette on 15 December 2020. Following this regulation, between two and seven licences may be awarded. Each licence will have a validity period of 10 years, renewable for an additional one-year period. Preference in the granting of licences will be given to land-based operators of the Province of Mendoza.

Law No. 9267 also addresses the possibility of conducting online gambling operations in Mendoza by virtue of licence granted by another jurisdiction with which Mendoza has entered into an agreement.

Further regulations, including the terms of the tender, are still being drafted.

Entre Ríos

Even though Resolution No. 1033 from the IAFAS (Institute of Financial Aid to the Social Action, the entity with regulatory competence of gambling), no steps have been taken towards licensure. It is expected that the advances in the province of Buenos Aires and the city of Buenos Aires will have an impact on this jurisdiction, either by pushing the call for a tender or by having IAFAS enter into agreements with other regulators to give licences awarded in other jurisdictions validity in the province of Entre Ríos.

Catamarca

Covid-19 related measures led to the land-based operator being authorised to offer certain online gambling products within the limits of the province of Catamarca.

Tomás E. García Botta is based in Buenos Aires and his practice focuses on tax litigation, as well as regulatory and gaming matters, servicing local and international companies and individuals throughout all gaming and gambling verticals. He has been a partner at Masot & Frettes – Abogados since May 2019. He has written several articles and also participated in conferences related to gaming and tax matters.