Cuando, Cuando, Cuando?

3 July 2008

Inconsistencies between the federal and provincial laws of Argentina may lead to the loosening of restrictions on Internet gambling in the capital city of Buenos Aires.

Argentina is divided into 23 independent provinces and one federal province -- Buenos Aires. Each province has its own constitution, modeled after the federal charter, authorizing the legislation and regulation of gaming operators.

Federal law, on the other hand, dictates that no gaming operator from another province may offer its services in Buenos Aires, where Internet gambling is also currently prohibited.

However, Mauricio Macri, the mayor of Buenos Aires, is "studying the possibility of regulation in the federal city," according to a recent report in the Argentine daily, La Nación.

The newspaper said the Buenos Aires government is looking to modify the federal law to construct a licensing scheme in which the federal government would receive a percentage of the money from bets placed within the province, a government source told the paper.

While not much information has been disclosed from the mayor's office, Carlos Fonseca, a gaming attorney with the Chehade, Fonseca, Servat, Suárez & Varela law firm in Lima, Peru, told Interactive Gaming News that Mr. Macri's discussions of regulating Internet gambling are at best very preliminary, adding Mr. Macri may not go forth with the plans for fear of bad publicity.

Mr. Fonseca explained that prior to being elected mayor of Buenos Aires, Mr. Macri was the president of the Boca Juniors football club, one of the largest and most popular professional sporting clubs in Argentina.

In December 2006, during his tenure with Boca Juniors, Mr. Macri entered into an ill-fated $13 million sponsorship agreement with Bwin Interactive Entertainment, an online gambling operator.

"The agreement got such bad publicity that it was terminated after only two games," Mr. Fonseca said.

In addition, Mr. Macri is going to be running for president in three years, Mr. Fonseca said, adding that he may not want the additional bad press.

While talk of regulation may be on the table, two major online gambling operators have been ordered out of the region by the federal government.

Bwin of Austria and Victor Chandler International of the United Kingdom, both licensed in the Misiones Province, have been separately ordered to shut down their respective Argentine Web sites this year for violating federal law.

Bwin, blocked by court order in March, argues that it has a valid license allowing it to operate and Buenos Aires has no right to block it from the province.

And last week administrative judges in Buenos Aires ordered Victor Chandler's two Argentine-facing Web sites to be blocked in Buenos Aires.

Only one gambling Web site, Formoapuestas, is allowed to operate in Buenos Aires.

Licensed by the Institute de Asistencia Social (Institute of Social Assistance in Formosa), in the Formosa Province, Formoapuestas is able to operate in Buenos Aires thanks to a 2006 injunction issued by a judge in Formosa preventing the National Society of the State Lottery from shutting down Formoapuestas' site.

Meanwhile, a source with experience developing Argentine gambling businesses, who wished not to be named, said the problem currently is that provincial licenses, like the Misiones license carried by Bwin and Victor Chandler, are not being accepted by Buenos Aires.

However, the source said, if enough of the provinces band together against Buenos Aires it will be big, bad Buenos Aires against the little guys, and then the media will pay attention.

Emily Swoboda is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.