In April Venezuela’s National Assembly approved an increase in the amount of tax payable for each slot machine in casinos, bingos and slots operations. The tax was raised by almost 1000%, up to around US$3,440 per machine per month, with a minimum US$172 payable. Less than two months later the National Assembly has rethought the new tax regime and not, as could be expected, to bring relief to the beleaguered gaming industry. The minimum now payable on each machine is some US$688, all in the national currency of Bolivares and practically without any rights of reclaim.

The lack of criteria demonstrated by the National Assembly, who echo the will of President Hugo Chavez in his zeal to close the casinos by imposing horrendous taxes that could be described as confiscatory, has already started to frighten away investors in the tourism industry. They find a much better climate for investment in neighbouring Colombia, where both the economy and the tourist industry are in good shape.

It is not surprising, then, that while the company Unidelca has begun a US$70 million resort casino project in Medellin, Colombia with hotel, casino, commercial centre and restaurants, there is not one cent being invested in similar projects in Venezuela. No money for the tourism sector and no new jobs. Worse than this is the fact that jobs are being lost in the gaming industry as it retracts in the face of an imminent demise.

The text of the modified tax law for gaming also indicates that sports betting will be taxed between 6% and 10% over the amount bet each month. All other forms of betting will pay between 30% and 50% of gross gaming revenue. The changes, including the extra machine tax, will be applied from 1 July. Before then many operators will be considering their options and, if nothing else, be reducing their slot machine numbers. (E-06.08.07)

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