The City of Buenos Aires does not require international
electronic commerce operations. Tere is also a requirement on revenue which is achievable - online operations of around $1.2m.
Te net worth threshold which was a big requirement in the Province of Buenos Aires ($100m), the City requires $25m. It's difficult due to the instability of the peso in Argentina to measure this in connection with local companies, whilst is easier for international operators to reach these parameters.
In addition, the City of Buenos Aires does not require international operators to partner with local companies - they can go alone if they want to. Now we enter into an issue of strategy. In my opinion, it is always better to look for a local partner when entering a new market, particularly a complicated market such as Latin America and Argentina. Some local advice is certainly necessary to get a successful result.
What are the respective tax rates for online gambling in the City and the Province of Buenos Aires?
In Argentina, we have a federal model with three taxation models. Te federal taxation level has VAT and income tax over capital gains, alongside other taxes. On a provincial level such as the City of Buenos Aires and Province of Buenos Aires, we have the administrative fee and the turnover tax. Te turnover tax is a sales tax but doesn't provide an offset mechanism so its applied in each step.
operators to partner with local
companies - they can go alone if they want to. Now we enter
into an issue of strategy. In my opinion, it is always better to look for a local partner when entering a new market, particularly a complicated
market such as Latin America.
Ten you have the third level which is the municipal level that you don't have in the City of Buenos Aires, but you do have in the Province. If operators are going to set up an office in the Province of Buenos Aires, as they are required pursuant to the tender, they will also be subject to municipal taxes. At a very high level, municipalities levy taxes on real state and also over turnover. Income tax rate for gaming companies is 41.5 per cent. Turnover tax plus the administrative fee is around 20 per cent of GGR in the City of Buenos Aires and 25 per cent of GGR in the Province.
Will the government continue to subsidise the horse racing industry?
I think so. I don't see why there would be a
change in approach to the horse racing industry. It is one of the biggest employers in the country so it wouldn't make any sense to stop supporting this industry.
The gambling licence for floating casinos has expired. What is the future for floating casinos in Buenos Aires?
Tere is one floating casino in Buenos Aires with two boats that are connected. Tere is currently a lawsuit with the City of Buenos Aires and with the federal government in a federal court. Tey have an injunction allowing them to continue operating and are working on a concession given to them by the national government before the competence on gambling and gaming was transferred to the City of Buenos Aires. As long as the injunction remains in place, the floating casino will continue to operate.
What does the future hold for Buenos Aires?
We're starting from scratch with regards to legal online gambling in the Buenos Aires region (City and Province) so there are plenty of opportunities out there. As I see it, it's important for regulators not try to reinvent what has already been invented and to learn from past experiences, whether on a local or international scale. Whilst political and economic factors cannot be controlled, regulators need to try and take as much advice as possible to create solutions that are sustainable in the medium term.
WIRE / PULSE / INSIGHT / REPORTS P83
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