Video-Lottery Regulation Declared Null in Court
SAN JUAN – Attempts by the Puerto Rico Treasury Department to install a network of video-lottery terminals throughout the island to increase tax revenue suffered a setback late last week, after a local court declared two of Treasury’s regulations on the matter null.
In a 30-page court document dated June 2, San Juan Superior Court Judge Gloria Maynard Salgado dismissed a request by Treasury, also known as Hacienda, for the court to rule in its favor in a suit filed by the Puerto Rico Hotel & Tourism Association (PRHTA), which groups many of the island’s hotel operators.
The PRHTA has long rallied against the continuing operation of electronic gaming machines outside of certified casinos, which have taken a significant hit in recent years. Industry players have argued that non-casino gaming, either operated illegally or with the government’s blessing, have led to several island casinos closing in recent years.
In a bid to increase tax revenue to shore up the central government’s coffers, amid a crushing fiscal crisis on the island that includes a $70 billion public debt and a $2 billion cash deficit, Hacienda approved in May 2015 two regulations that would pave the way for an islandwide video-lottery network.
The development brought Hacienda into a conflict with the PRHTA that eventually ended up in court, with Maynard Salgado ultimately ruling that Hacienda’s regulations fell outside the jurisdiction of the agency, and that legislation needs to be approved on the issue.
When Hacienda approved the regulations last year, the Puerto Rico Legislature intended to file resolutions blocking the regulations, but for some reason did not follow through on said task during the legislative session.