Uruguay’s New Online Gambling Law Brings Strict Regulations

Uruguay has passed a new law that will impose strict regulation on offshore online gambling sites, effectively banning them from operating in the country, along with new taxes on those forms of gambling approved the state.

The new Accountability Law was adopted last week by an overwhelming 30 to 6 majority in the Senate. On its way to adoption, the bill received the approval of the Chamber of Representatives, Uruguay’s lower house.

Following the Senate’s approval, President Tabaré Vázquez signed the bill into law on Monday.

New Changes and New Tax

The Law 19.535 brings a vast variety of gambling-related changes, including a new 0.75% tax on state-approved gambling venues’ income. The list of venues includes casinos, gaming halls, racetracks, sports wagering shops and all other operations of the Dirección Nacional de Loterías y Quinielas (DNLQ), the state-owned national lottery operator.

At this moment, DNQL is the country’s only operator allowed to operate online and to offer sports betting services. The law will impose the strict prohibition on all gaming products distributed through internationally-based channels.

The law designates the state as the side responsible for making sure the prohibition is observed. The state will be able to adopt a long list of preventive and punitive measures, including domain blocking, prohibition of commercial communication, sponsorship, and advertising.

Prohibitionist Approach

It was clear the country would take the prohibitionist approach back in July when the country’s Ministry of Economy and Finance announced its plans.

Some deputies openly objected that some foreign-based operators were allowed to advertise their services in Uruguay through sponsoring local football clubs. A good example of this was GVC Holdings-owned Sportingbet brand and its sponsorship of Club Nacional de Football, one the most popular sports club in the country.

Uruguay’s new conservative legislation is completely opposite to the one currently in force in Colombia. The Continent’s fourth largest country introduced the new law last year, becoming the first South American nation to allow online gambling. Since then, Colombia has issued two online gambling licenses but also imposed domain blocking to protect its market and operators.