After much protest and a false start, a joint venture between Costa Rica-based online sports betting company BETonSPORTS and Argentinean gambling company Gammalink S.A. last week launched what it is calling Argentina's first legal, licensed Internet sports book.
The site, Formoapuestas.com.ar, is licensed by Formosa's Institute de Asistencia Social (Institute of Social Assistance in Formosa), which is responsible for the authorization and administration of casinos in the region. It was initially launched two weeks ago, but after meeting with disapproval from three major Argentinean entities, the National Lottery, the Argentine Football Association (AFA) and the national government, Gammalink, S.A.-BOS (the joint venture) subsequently took down the site.
"When the site did first launch, it was up for about two days and we took it down because the Argentine Lottery was up in arms that we were breaking the law," said Kevin Smith, director of communications for BETonSPORTS. "So we took it down and it was down for about a week as we negotiated with them and some other folks, showing them that we had all of our ducks in a row; we had all of the proper licenses."
Operators can become licensed in Argentina via two avenues: nationally or by individual states. Smith said the new venture became licensed through Gammalink S.A.'s existing regional license issued by the province of Formosa.
"We said, 'Okay you guys have the license, we don't,'" Smith explained. "But we have the infrastructure and the expertise in doing something online, and you have the local knowledge of the area, so let's team up."
After the first launch, however, Argentine Legislator Gabriel Hernandez denounced Formoapuestas as illegal.
"This is fraud and a form of money laundering and tax evasion," he said, "because in our country only the National Lottery can operate the sport bets, according to Law 25,295 that governs the administration, operation and control of the game of in its different modalities in all the national territory."
Further, he said that Article 4 of Argentine Law 25,295 clearly states that the National Lottery is in charge of the administration and operation of any game involving sports betting in the federal jurisdiction and that provincial jurisdictions may participate in the lottery only subsequent to an agreement with the National Lottery.
"It is clear that National Lottery has nothing to do with Formoapuestas, and therefore, this type of Internet sports betting is illegal," Hernandez said. "There is no means to verify how much one gambles, what gains the company obtains, what prizes are paid and how much control the IAS has. These reasons demonstrate why this site is participating in money laundering and tax evasion. The Province of Formosa cannot authorize this, or guarantee it."
To further drive their argument, a spokesperson for the National Lottery said that offering Internet sports bets interfered with the lottery's own sports betting game, thus hurting business.
The hostility toward Formoapuestas may have spawned from a similar conflict involving online gambling company Sportingbet, which also operates a site based in Argentina. The AFA stated in September 2005 that it was concerned that Sportingbet's Miapuesta site would become a direct a competitor to the National Lottery's football betting game, PRODE. The AFA even asked the National Lottery to initiate legal proceedings against Miapuesta.
Smith said the Formoapuestas site was shut down temporarily as a show of good faith to the opposition. The joint venture, he said, wanted to make sure it did everything by the book to avoid future conflict.
The site was re-launched last week, and it appears that the AFA, the lottery and the government have no grounds for bringing any legal action against Gammalink S.A.-BOS. Smith said they are encouraged that the site will endure.
He also said the new site has been well received by the betting population.
is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.