Companies Bid for Sports Betting in Paraguay
Sports betting has opened up in Paraguay, resulting in a battle between six different companies to gain the five-year-long concession from the state. Out of six companies that initially requested details for the official bidding process, three companies have now turned in their applications for the job. That means the decision for which company will run the multi-million-dollar earning business is soon to be reached.
Paraguayan gaming authorities will now have to determine who will receive the next five-year concession for sports betting. Regina Bordon/Unsplash
The call for bids in Paraguay
Companies were able to first submit their bids for Paraguay’s nearly two months ago. Public Tender No. 01/2022, as it was labeled, would allow for the exclusive management of sports betting practices in all of Paraguay. This covers both in person and online/electronic means of sports betting. The period of the concession would be for five years.
Six companies initially expressed interest in the role. They were: Luis Carlos Alder BenÃtez (Play Tech), Empresa Afun and Hy Hao Yun SA, B Gaming SA Paraguay branch and Gambling SA, 7 Jumps SA, Daruma Sam SA (Apostala, the current holder), and Jockey Club del Paraguay. The groups that submitted as two parties are considered consortiums and would manage the position together.
Now the public knows which companies have actually submitted their bids for the $500 million USD business. These are Daruma Sam, Play Tech, and B-Gaming Sucursal Paraguay / Gambling SA. Daruma Sam is considered the favorite, but has also seen some controversy. It has been alleged that Daruma Sam is favored by Conajzar, Paraguay’s gaming authority, and thus has an unfair advantage in the bid.
In a bid that is worth so much money, it is understandable that interested parties would raise questions and demand clarity about the fairness of the process. Earlier in October 2022, Daruma Sam’s designated lawyer called the allegations of unfair treatment unequivocally false. He maintained that Daruma Sam will go through the bidding process and be treated just like every other contender.
Controversy around gaming taxation
Daruma Sam’s contract for the current concession period will end in May 2023. By then a new leader will be named for the next five year period. For the chance to hold this title, participating companies have had to pay a fee of around $8,700 USD. However, paying the fee and filling out the forms may not be enough.
Firstly, all companies can propose different royalty percentages for their work. Daruma Sam came in with an offer of 22%; BGaming-Gambling offered 27%, and Play Tech offered 23%. The next question is whether the companies/consortiums fulfill the basic requirements set out in Conajzar’s guidelines.
Daruma Sam suggested that the other two do not fulfill these requirements. Specifically the consortium shows its experience based on work in Argentina, but not in Paraguay. The company’s solvency has also been brought into question. The data provided may not be sufficient to prove this.
Of course the role of sports betting provider goes beyond the industry. It is of significant importance to the state of Paraguay as sports betting offers large tax contributions every year. From the total tax collected for this popular industry, 50% is given to the National Sports Secretariat. This supports athletics in Paraguay. The rest is allocated for Diben, the National Charity Directorate. Diben offers health support and supplies to vulnerable populations across the country.
There has been a lot of backlash regarding taxation in Paraguay’s gaming industries lately. TDP, the country’s Quiniela operator, is accused of corroborating with Conajzar to avoid paying its fair share of tax. That means less contributions to Diben, among others, who need the support.
