Added in Legal Gambling on April 4, 2019 by Jim Murphy

Puerto Rico Governor Ricardo Rosselló has proposed legislation to legalize online and in person sports betting. The offerings proposed by Rosselló are extremely comprehensive providing for betting on sports, esports and fantasy sports. In a press release issued by the Governor’s office he characterized the sports betting legislation as ‘aggressive’ and quoted two independent studies on the economic upside of sports betting. The first dealt with the increase in tax revenue:

Two independent studies have been prepared on the impact that this industry would have in Puerto Rico’s economy. The first study was commissioned by the Chamber of Commerce of Puerto Rico and was prepared by The Innovation Group. This study estimated revenues to the Government at $29 million for 2020, $51 million for 2021, $68 million for 2022, $77 million for 2023 and $87 million for 2024. These projections are based on authorizing sports betting on casinos, racecourse, galleries, horse agencies and online games.

The second dealt specifically with sports betting. It’s a bit unclear from the verbiage but based on the amounts quoted I’m assuming this is also referring to tax revenues:

The Government requested Spectrum Gaming Group conduct a market study for bets on legal sports events. This firm estimated that sports bets, both physical and online, could generate between $44 and $62 million annually.

More than most US states who just need addition tax revenue so they can spend more money more frivolously, Puerto Rico has a more practical revenue requirement. The country suffered a severe debt crisis in 2017 and later that year Hurricane Maria severely damaged the island. The infrastructure took a huge hit–power was off for months in some parts of Puerto Rico and it was six months before full airline service was restored.

The Governor also expressed hope that an expanded gambling market would increase tourism:

“The legislation will make it possible for Puerto Rico to be marketed nationally and internationally as an attractive destination for the millions of people who bet on gambling.”

The regulatory component would be charged to a new gambling commission while the Financial Institutions Commissoner’s Office will be in charge of oversight. Taxes will be among the lowest of any US state and there will be special perks to help the horse racing industry and–oddly enough–the cockfighting industry:

These types of bets can be made at any place authorized by the Commission, such as casinos, racetracks and lodging establishments. The release said “sports betting licenses at licensed horse-betting agencies will also have a 50 percent discount for the first 10 years,” and that, “to help those Puerto Ricans who participated in the sport of cockfighting reinvent themselves, licenses will be authorized” free of charge for the first 10 years to legally run cockpits before the practice was made illegal.

On the surface, Puerto Rico’s sports betting proposal appears to be one of the most intelligent set forth in the post-PASPA world. Reasonable taxes, comprehensive offerings and at this point, it appears that the intent is to involve the private sector as much as possible. There are just over a dozen land based casinos in Puerto Rico though several have closed in recent years due to the one-two punch from Hurricane Maria and a growth in smaller (and not legally authorized) slots parlors throughout the country.

About the Author

Jim Murphy

For more than 25 years, Jim Murphy has written extensively on gambling theory and practice. Jim Murphy has been quoted in media from the Wall Street Journal to REASON Magazine. Murphy worked as a radio and podcasting host broadcasting to an international audience that depended on his expertise and advice.

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