Lanusse (IPLyC): “We want iGaming to go through the legal channels already available in the Province”

In an exclusive interview with Gaming & Media News, Matias Lanusse, head of ALEA and president of the Provincial Institute of Lottery and Casinos of the Province of Buenos Aires (IPLyC), summarizes the directives of Governor Maria Eugenia Vidal for the gaming control. At the same time, he describes the regulatory and bidding processes of iGaming and explains why these resources will help foster social improvements in the territory.

Matias Lanusse, head of ALEA and president of IPLyC. Matias Lanusse, head of ALEA and president of IPLyC.

Can you please be precise about your entering into the gaming world?

I am a Business Administrator and I have been in gaming since January 2017 with a position entrusted to me by Buenos Aires Province Governor, Maria Eugenia Vidal. She asked me to focus more on the social aspects of the activity than on the monetary side. All this considering that the Lottery of the Province of Buenos Aires is a very important tax collector. That money goes to social, infrastructure, health and education improvements. Also, in August 2018, I was voted as president of ALEA.

How do you see ALEA’s current status?

From the Province of Buenos Aires, we see ALEA as an organism with good bases, a federal approach and that has a lot of space to grow yet. The idea is to generate more Commissions in ALEA, especially to coordinate the progress of the regulation of online gaming, already present in six provinces of the country. Now, the Province and the City of Buenos Aires are also adding to that regulation of iGaming, which means that a large portion of the gaming market in the country has online legalization.

What was the previous analysis that led to deciding the regulation of online gaming in the Province?

With Governor Vidal, we understood that this modality was already happening in the Province without any control. The regulation has determined who is really playing and who are the companies interested in obtaining a license to operate iGaming in the Province. We did a pilot test in 2017 buying some prepaid cards (paysafe cards) that were sold in various points of the territory. Prepayments resulted in the purchase of products abroad or registration to play online through a company. We registered and verified that the company did not check the data of the participants, neither the age nor if they were enrolled in any social plan granted by Argentina. Logically, we made the complaint and the legal claim that allowed the blocking of this site. The important thing was that we noticed that there was no reliable technological tool that could block the entire spectrum of the Province so that this did not continue happening and affecting the people who wanted to play. Thus, we work with deputies and senators in order to generate a favorable framework for the development of online that establishes precise limits and corrects that void that existed until now in regulatory matters in the Province.

How did you start implementing the online regulatory process?

We analyze the cases of other countries (Europe, United States, Colombia), checking how they had regulated it, what their failures and their progress had been. We studied these regulations to take the best of each of them. An example of something positive is the panic button (gives a 48-hour option to not be able to reconnect to the system) and a negative issue is the one of advertising, leaving it in the hands of the operator. In the online gaming law that was published in the Province, approved in December 2018, the application authority controls and guarantees the advertising of the operators. Thus, the legislation has more than thirty measures aimed at caring for bettors. Of course, in addition to these matters, there is the monetary aspect. With the regulation, the Province may collect in taxes an amount that did not exist before, as it remained in the hands of the operators. This tax collection, in turn, will facilitate a greater social contribution to the Province. In our jurisdiction, each game is regulated, which implies that it is clearly established what percentage of each game will go to enhance health, education, infrastructure and other areas. In the future, this ‘new’ source of funding will represent an additional collection to the land-based gaming. The Province will handle iGaming to respond to the social agenda that Governor Vidal has as a priority.

What were the aspects you decided to include in this gaming legislation?

Until now, the law that gives a broad framework to online regulation was voted. Then, we had the regulatory decree of the governor that regulates the activity, with a goal of social help. Then, there are the resolutions in charge of the Province Lottery (IPLyC), which are more operative. One of those resolutions was to establish free permit holders for companies that will compete for online gaming licenses in the Province. For this, two lines were set: 1) that the registrants meet the highest international quality standards in the sector. We have nine of the largest companies in the gaming world participating in this tender. Once the scores are awarded and the licenses are delivered, line 2) is the resolution that determines where the game is going to happen. We have almost 4,500 lottery agencies in the Province and we want to include them in the online modality, through the loading of credits or their payment. We are working on the operational part of how to implement this. Of course, the transfer and card system must be enabled to use the online credit system.

How many stages of the process will be necessary in order to define a maximum of seven iGaming operators in the Province?

The process will take several months and consists of three stages. Stage 1) is the registration in the permit holders’ book. So far, 22 companies have been registered, of which 18 are UTEs (Temporary Companies Union), including firms of the caliber of William Hill, Playtech and PokerStars (The Stars Group). As I said before, we set high quality standards to have the best companies in the gaming world. In that sense, we established as a minimum requirement that foreign companies had (as of December 31, 2018) a net worth of US$100 million, or its equivalent in another currency. Another important requirement is that they will have to subscribe branches in the Province, and not subsidiaries. In Stage 2), the companies that met the requirements established in the law, the decree and the resolutions will have to pay $5.5 million (US$100,000) as Participation Right, and present all the bases, which set the parameters to be evaluated: financial strength, number of licenses, customer traffic, experience in the sector, the robustness of the platform, a clear traceability with clients, among other issues. We care a lot about specifying those people we don’t want to play in order to take care of the most vulnerable sectors of society. For example, people who receive a social plan. Finally, in Stage 3), once the license is granted, each licensee must pay the amount of $ 65 million or US$1.8 million (40 percent at the time of signing the Agreement; another 40 percent after the first year of license; and the remaining 20 percent ​​at the second year of license). In addition, a guarantee of $130 million (US$2.36 million) will be established. It is clear that there is no vision of Governor Vidal to expand gaming. In fact, her point of view against the activity is well known. What we are really trying to do is a strict control of a modality in parallel to land-based gaming that already existed, but wasn’t regulated. We want iGaming to go through the legal channels already available in the Province of Buenos Aires: 12 casinos, 46 bingos and 4,492 lottery agencies. It will be a game only for Buenos Aires citizens within the territory, with new resources that will be redirected to the social areas of the Province.