Today Peru celebrates its Independence Day and newly elected President Alan Garcia officially takes office. He has previously announced that in future there will be a better understanding between Peru and Chile, the sister state that for over 20 years has maintained a rhythm of economic growth unrivalled in the region. In contrast to the rhetoric of populist politicians, who assume a pugnacious mistaken historical antipathy towards Chile, Garcia seeks to emulate the order that exists there.

This same order or lack of order is reflected in the developing gaming industry. In Chile legislative order exists for the industry, whilst in countries such as Peru it remains part of the general economic saga, with a poorer outlook. In reality the gaming industry in Latin America continues its evolution with a measure of chaos in the majority of countries. It would be fair to say that the casinos of the region are regulated, unregulated and quasi-regulated.

These labels have as much to do with the nature of gaming laws as with the operators in the various countries. It is true that Peru offered modern gaming legislation to attract foreign investment in 1993, but more recent laws and contested regulations have created an uncertain situation where gaming businesses can open protected by judicial resolutions and at the edge of existing gaming legislation.

The large majority of slot machine operations in Peru function with the Gaming Commission being unable to apply its standards because of being shackled by judicial rulings. This situation has led to there being few casinos opened with considerable investment and offering the guarantees that gaming law demands. This is not to say that no quality venues exist or that there are no first class operators in a country where almost 50% of the economy is informal.

The other side of the coin is visible in Chile where, under the Casino Law 2005, 9 casino resort licences have recently been allocated in the regions. Under previous legislation Chile has 7 functioning casinos from municipal concessions and the new law allows for an additional 17. Projects presented under the new law will add another 6 or 7 casinos to the 9 licences already granted.

It is estimated that investment in the new casino concessions will generate over one billion dollars for the construction of tourism infrastructure that includes luxury hotels, entertainment centres and retail malls. The new casinos will be taxed at 20% of gross revenue and the funds will be used for the benefit of the communities that host them. This alone should be food for thought for the country where the cuisine is second to none. (E-07.28.06)

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