Paraguay regulator under fire for sports betting tender irregularities


paraguay-sports-betting-tender-irregularitiesParaguay’s top gambling regulator is under fire for awarding a monopoly sports betting concession even after the national comptroller identified irregularities in the bidding process.

Last week, Javier Balbuena, president of the Conajzar (National Gaming Commission), announced that Daruma Sam SA had won the competition to become Paraguay’s sole authorized sports betting provider. Daruma, which operates under the brand, has been taking wagers in Paraguay since 2014.

On Tuesday, local media outlet ABC Color reported that Paraguay’s Office of the Comptroller General of the Republic (CGR) was protesting Conajzar’s decision, having identified ‘irregularities’ in the bidding process, which prompted CGR to file three separate complaints with Conajzar.

The CGR had urged Conajzar to suspend the tender so that these irregularities could be probed further, but Balbuena (pictured) refused. CGR chief Enrique García admitted that his office had no formal enforcement powers to prevent the concession being awarded, but said he wasn’t ruling out pursuing judicial action against Balbuena.

While there were seven sports betting operators who could have participated in the tender that Conajzar announced in August, only one other company – Jockey Club Del Paraguay – submitted a bid. However, Conajzar disqualified Jockey Club’s bid due to an alleged failure to submit certain financial documents.

Complicating matters further, Daruma’s president Manuel Lugo reportedly has a close relationship with Javier Zacarías Irún, an adviser to Paraguyan President Horacio Cartes. Former senator Gustavo Pedrozo, who owns the Jockey Club, is reportedly conferring with his lawyers regarding potential legal remedies to the Conajzar decision.

Assuming the award stands, the government stands to dramatically improve its share of sports betting proceeds. Under the pre-monopoly system, operators in this nation of 7m souls kicked back 4% of their betting revenue to the state. Daruma’s bid contained a pledge to boost the state’s share to 21%.

Using September 2017’s betting figures as a guide, the government said its share of betting revenue came to PGY 713m (US $126k). Had the new 21% rate been in effect, the government would have earned PYG 3.75b ($663k). Looking five years down the road, the government expects to be reaping an annual PGY 108.9b ($19.3m) from betting.