Puerto Rico Casinos See Revenue Growth
Author:
Muhammad Gregory
As with most casino industries around the world, Puerto Rico’s casinos have been pushing through pandemic difficulties to try to regain customers and profits after two years of instability. With 2022 coming to an end, the industry has finally bounced back, as evidenced by its profit reports for the last year. It is a boon for Puerto Rico’s gaming industry but also a positive sign for global gambling as we enter 2023.
Puerto Rico has reported high casino profits after two years of pandemic regrowth. Towfiqu barbhuiya/Unsplash
A positive sign for gaming in Puerto Rico
Data for profits in 2022 and previous years was provided by the Puerto Rico Gaming Commission, which is responsible for gaming regulation on the island. Though it is an unincorporated US territory, Puerto Rico manages its own gaming rules via this commission. It is also responsible for overseeing casinos and casino-resorts, a common establishment in touristic parts of the island.
The commission reported that casinos there have brought in more than $355 million USD in profits this year. This is a significant rise compared to 2021, where the number was closer to $256 million USD. This constitutes a nearly 40% year-on-year increase.
Puerto Rico’s general economy has also grown in 2022, which is worth celebrating. However, the growth in the economy is only half of what can be seen when focusing only on casino gaming from 2021 to 2022. So why has casino gaming increased so much in the last year?
Puerto Rico’s Hotel and Tourism Association (PRHTA) has its own Casino Committee, headed by president Miguel Vega. Vega spoke to this question exactly in an interview with local media outlet El Vocero, saying that:
“The reason why revenues have improved is that the casinos have already stabilized and there are not so many restrictions. We had a more consistent year operationally, of course, we have the challenges of employment, but we have operations with regular hours, which has allowed us to recover lost ground… We are positive and we hope to finish this fiscal year that is running and for next year, positive, definitely.”
This overall growth does have a blip when looking at month-to-month numbers: Between May and September 2022, profits dipped by 3%. It’s hard to say exactly what caused the dip, but authorities — like Idalynn Ortiz Rivera who acts as Director of Communications for the Gaming Commission — have concentrated instead on the great increase it saw again in October 2022.
Rivera believes the increase will continue through the final month of the year, December 2022, and guesses there will also be positive growth in the new year. However, she also conceded that it is not possible to assure steady growth every month and that some conditions in Puerto Rico are unpredictable.
How tax is distributed in Puerto Rico
Puerto Rico has 17 functioning casinos, some of which are connected to hotel sites and some that operate independently. At these casinos are at least 5,000 slot machines. These slots alone encouraged spending of $300 million USD per year and also are supported by 3,000 employees.
Puerto Rico’s tax agency is the recipient of 50% of slot machine profits. These taxes are then distributed among several important public groups. One is the General Fund, another is the Tourism Commission, and also Puerto Rico’s university. These groups also benefit from tax revenue collected via sports betting — an estimated $18 million USD per year.
Sports betting is a burgeoning industry in Puerto Rico, as it is in many LATAM countries which have recently regulated it or are in the process of doing so, like Brazil. Seven licenses were issued to sportsbooks and sports betting platform operators at the start of 2022, but none for exclusively online betting platforms yet.
