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Posted on: May 31, 2023, 07:04h.
Last updated on: May 31, 2023, 09:59h.
As with many US jurisdictions, Puerto Rico is looking for ways to improve its economic situation. One of these is through legalized sports betting, which is starting to pay dividends to the government.
The sports betting market in Puerto Rico is still relatively small, as there are currently only land-based sportsbooks available. The good news is that the market is picking up, leading to significant tax revenue for the territory.
The Puerto Rico Gaming Commission (PRGC) announced that, as of mid-May, the government has collected more than $400K from sports bets, according to local media outlet El Vocero. That figure only applies to the last fiscal year, running from June 2022 to May 2023.
Puerto Rico Adds Level of Autonomy
Through the middle of May, two weeks before the end of the fiscal year, the sports betting handle for the year was $145 million. Of this, the government received $416K in tax revenue.
The PRGC said the 7% the government collects via a tax on sports betting doesn’t apply to the total amount bet. Instead, it’s only calculated against the bookmaker’s profits.
The handle and the tax revenue are significantly lower than what US states are seeing on a regular basis. It’s common for the states to report six- or seven-figure tax revenue, but they all had to start somewhere.
Several factors will drive the figure higher in the future, allowing Puerto Rico to obtain greater fiscal autonomy. The introduction of online sports betting, which is currently being discussed by lawmakers, will see the segment pay a 12% tax.
Legal sports betting in the US territory is still relatively young. Therefore, standard growth of the market will lead to greater revenue, as well.
As Eric de la Cruz, director of the Commission’s Sports Betting Bureau, points out, bets increased substantially between March and May. This coincides with the start of the MLB season, with spring training having begun at the end of February.
Online Sports Betting Advancing Slowly
Puerto Rico approved both land-based and online sports betting in 2019 before finalizing the legislation at the end of 2020. It took another two years for the PGRC to begin issuing any licenses.
There are currently only two retail sportsbooks available, the BetMGM Sportsbook at Casino del Mar and the Caesars Sportsbook at Casino Metro. Last November, the regulator approved another group of licenses, including three sportsbooks and four service providers, before approving another handful in March. Those operations are still in the process of being launched.
A few months ago, the PGRC said that online sports betting would probably arrive before the end of the fiscal year. As May comes to a close, so does that window. PGRC director Rivera Emanuelli now believes online sports betting could launch by June.
In the US, the online sports betting segment accounts for 70% of all activity, according to studies. If that pattern holds for Puerto Rico, it has the potential to quickly find significantly greater sports betting revenue.
There is also an initiative to expand the casino gaming segment. It’s currently bogged down in bureaucracy, but will likely pull itself free soon.
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