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Bill would tax gambling and sports betting in Costa Rica

July 17, 2009

Within the next two weeks, the Costa Rica Finance Ministry will send a bill to the Legislative Assembly proposing a 2 percent tax on income earned by the gambling, gaming and betting industry. The ministry estimates that the tax would generate up to $85 million for the government coffers if passed.

Total income in the gaming industry is calculated by money earned by casinos, as well as by the online betting industry, which includes gambling games like poker as well as betting on sports. There are 46 operating casinos in Costa Rica as well as 300 gambling-related businesses, including call centers that receive calls for gambling and betting purposes.

If the bill is passed, a regulatory body would ensure that gambling locations and affiliates are licensed and honor the new tax. The regulatory body would be comprised of Finance Ministry and other financial, security and tourism officials.

Though the anticipated financial gains of the tax would pump a large sum of money into the Costa Rican state, companies and employees within the gaming industry are concerned about potential ramifications. Gambling has seen significant drops in revenue in 2009 and the tax would further reduce overall earnings.

Jorge Hidalgo, vice president of the Costa Rican Association of Casinos, said the industry is among the hardest hit by the recession. “Activity has fallen about 35 percent, and in addition to that we have fewer work hours and have had to let go about 500 employees,” he said.

The bill is anticipated to reach the Legislative Assembly on Aug. 3.

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