ECONOMY
Bolivia ranks as one of the poorest countries in South America in terms of GDP per capita. According to the International Monetary Fund (IMF), the economy has recovered more rapidly than expected and output is now nearing pre-COVID levels, although it is expected to remain below the pre-COVID trend during the next five years. While inflation is low (just 2.6 per cent) and is among the world’s lowest, this is due to heavy subsidies and price controls for food and fuel.
Bolivia’s foreign exchange reserves have been shrinking for several years. While the Boliviano’s peg to the US dollar has been in place for over 15 years, the deepening economic crisis could break the country’s exchange rate peg which has led to long lines of people outside the central bank waiting to get hold of dollars as they become increasingly scarce.
In March, Fitch downgraded Bolivia’s debt deeper into junk territory, assigning it a B minus rating with a negative outlook. Te rating agency cited “heightened uncertainty around the authorities’ ability to manage this situation, as well as around its severity given an ongoing delay in publication of international reserves data.”
In addition, doing business in
The law, known as the “Games of
Chance, Raffles and Gambling Law” sought to revoke a gaming act passed in 1938, which had banned almost all types of gaming in the country, as well as another act passed ten years later by President Gualberto Villarroel which had further prohibited the
playing of roulette and the
establishment of casinos.
Bolivia remains challenging. Te World Bank’s 2020 ‘Doing Business’ report ranked Bolivia 150th out of 190 countries, as the costs of starting a business and paying taxes in the country are among the highest in the world. In addition, Bolivia ranked 107th out of 140 countries in the Global Competitiveness Report 2019, mainly due to its weak institutions and lack of judicial independence.
GAMBLING BEFORE THE 2010 GAMING ACT
In 2007, a gaming law, backed by the administration of President Morales, was put forward in the Bolivian Congress. Te law, known as the “Games of Chance, Raffles and Gambling Law” (Law No.085/2007) sought to completely revoke a gaming act passed in 1938 signed by President Germán Busch, which had banned almost all types of gaming in the country, as well as another act passed 10 years later by President Gualberto Villarroel, which had further prohibited the playing of roulette and the establishment of casinos.
Despite this ban illegal slot machines were present nationwide and the Bolivian government decided in 1996 to grant a temporary licence to over two hundred gaming parlours and casinos. By 2007 there were eight companies that were allowed to run gaming in Bolivia: Lotex, Corhat, La Gloria, 7 Sietes, Raffle Games, Games, Winning and Tournaments. Te largest operator in Bolivia at the time was Corhat, which ran around 2,000 slot machines in 120 gaming parlours dotted all over the country. By 2010, according to the government there were over 11,000 legal slot machines nationwide.
Te second largest slot machine operator was Lotex. Owned by Russian operator Ritzio Entertainment Group, Lotex ran around 1,500 slots. Te Russian company began operating bingo in 2002 in its gaming parlours nationwide under its Bingo Bahiti brand and eventually opened 15 Bingo Bahiti bingo halls. Lotex invested over US$12m in Bolivia and announced plans in 2006 to double its investment in the area.
Te largest bingo hall in Bolivia was, until 2011, the Bingo Bahiti in Santa Cruz. Tis was followed by the opening of a US$1m Bingo Bahiti bingo hall in La Paz, which opened in 2006. Bingo halls under the Bingo Bahiti brand opened up shortly afterwards in the cities of
P50 WIRE / PULSE / INSIGHT / REPORTS
In March Fitch
downgraded Bolivia’s debt deeper into junk territory, assigning it a B minus rating with a negative outlook. The rating agency cited “heightened uncertainty around the authorities’ ability to manage this
situation, as well as around its severity given an ongoing
delay in publication of international reserves data.
Cochabamba, Sucre and Tarija. All of the Bingo Bahiti bingo halls offered slot gaming as well as bingo.
CORRUPTION SCANDALS
In 2011, the government ordered the closure of the Bingo Bahiti halls as they had failed to comply with the terms of their licences. Te company was hit with a US$3m fine and the president of the company was arrested. Other government officials were also
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