How Do Online Casino Regulations Look Like In Uruguay?

 (photo credit: INGIMAGE)
(photo credit: INGIMAGE)
 
Gambling has been legal in Uruguay since 1819 when the government approved a national lottery. Since then, the regulations have evolved tremendously and offline casinos offer an assortment of games and bets. However, online casinos remain unregulated and there's no operator licensed to provide typical betting products. Uruguay also has no law restricting online gambling, but the state has worked tirelessly to ban offshore sites offering online gambling products to its market. In recent time, FENAJU, the National Federation of Uruguayan Gaming, has been pushing for a regulated online gambling scene, citing lost revenue and lack of player protection as crucial reasons for their proposition. However, as it stands, players in Uruguay have to rely on offshore online casinos and the few approved lottery and racing betting sites. Here's an overview of how online casino regulations look like in Uruguay, including a brief gambling history, licensing and taxation laws. 

History of gambling in Uruguay

Although Uruguay’s online casino market lags behind countries like Colombia that have a fully regulated scene, gambling isn’t a novel activity. The first lottery in Uruguay was drawn in 1819, which led to the creation of the National Directorate of Lotteries and Pools (DNLQ) in 1856.  Since then, a lot has changed and the first gambling regulation (Law #1,595 of 1882) has evolved to accommodate state rooms and privately-owned casinos. Offline gambling is fully regulated, so players can enjoy games in different casinos. Together with the General Directorate of Casinos (DGC), the government acts as regulators of the sector, ensuring a safe and transparent environment for players.
Concerning online gambling, no specific laws have been enacted to regulate or bar casinos. However, two critical events shed light on the current situation. In 2002, The state permitted the National Lottery Network to provide online services, including online lottery tickets and sports lottery. The National Maronas Race Track also received a license authorizing them to accept online bets. In 2005, La Banca de Quinielas de Montevideo received a permit to offer remote sports betting. This license was issued by the Ministry of Economy and Finance and birthed Supermatch, the only online casino brand in the country.
In Uruguay, the state is in charge of online gambling and has ongoing measures to find and ban offshore sites. 2019 saw the banning of more than 450 offshore websites, which has been the trend since 2005. The efforts have seen Supermatch become popular in the country with little competition from sites hosted outside Uruguay. In 2018, the brand reported a 48% year-on-year growth. Supermatch also secured a partnership deal with the NBA in the same year, becoming the first Latin-American country to achieve that feat. The brand currently offers online sports betting on real events and virtual games in three disciplines. More on game offering is discussed in the sections below.
Another critical step in Uruguay online gambling came in July 2019 when Enjoy Club launched a digital platform (EnjoyWin.Net). The online platform is merely a social casino offering free games with no prizes. It is designed to attract new players to enjoy casino games online, with the hope of motivating them to visit the Club’s long portfolio of land-based casinos. However, these are all crucial signs that Uruguay will soon have online casino regulations and FENAJU has been pushing the government to consider creating a framework for licensing and monitoring operators of online casinos.

Gambling license in Uruguay

For a long time, companies have sought the Uruguay government's permission to provide specific gambling products online. Uruguay also has licensed online platforms like Supermatch operating from the 2005 license given to La Banca. However, the state has no formal licensing process for online casino operators. Only land-based casinos and gambling halls are licensed and regulated under the state's laws. Several offline casinos are owned by the state and private corporations and all follow the regulations set forth by the National Federation of Uruguayan Gaming. This is as far as licensing goes in Uruguay.
However, since 2011, the state has been under pressure to create legislation for licensing and legalizing online casinos and operators wishing to provide online gambling products. The pressure has come from FENAJU and private investors. The lack of a clear-cut legislative framework for online gambling has resulted in tremendous revenue loss as Uruguayans continue to bet on offshore websites. Unlike Venezuela, Uruguay doesn't collect tax on winnings from offshore sites. The state passed a law to prohibit offshore gambling platforms from targeting Uruguayans and all ISPs in the country are tasked with blocking access to such sites. Offshore licensed betting companies are also barred from sponsoring clubs and sports events in the country.
Nonetheless, Uruguay doesn’t prohibit sports betting. It was merely a reiteration of the 1895 Law that addresses providing gambling services to the Uruguayan market without a valid license as illegal. This means players in the country can bet on sports events online without any issues. Currently, state-run lottery operator, La Banca, is the only licensed operator providing online sports betting. Players aren't prohibited from joining online sites hosted in foreign countries with regulated online gambling and because of this, many have access to all kinds of products. However, the government continues to seek and block online casinos that target its population without a proper license.

The legality of online gambling in Uruguay

Land-based casinos and gambling halls have been legal in Uruguay for many years, which is the case in most Latin-American countries. Betting in offline casinos is fully regulated with a legislative process for licensing, taxation and monitoring compliance. However, things aren’t so clear when it comes to online gambling. The state is yet to provide a legal framework for approving and licensing casinosonlineuruguay. The only state-licensed operator offering something close to a typical online casino is Supermatch, a brand run by La Banca. Supermatch only offers sports betting on real events and virtual sports. Players in Uruguay can also enjoy online lottery and race betting. 
FENAJU and other organizations have been inciting the state to introduce regulations for online casinos, so it is expected to happen in the future. Players interested in enjoying casino games can explore existing titles at EnjoyWin.Net, the only other online platform permitted to offer games of chance. Nonetheless, Enjoy Club's online betting products are for social gambling, with no real money prizes and incentives. This leaves players with one more option, which involves finding reputable online casinos abroad. The punters aren't prohibited from betting in offshore gambling sites, but the government has measures to prevent access to such websites, especially those targeting the Uruguayan market. 

Gambling taxation laws

Many countries have a legal, fully-regulated online gambling scene because of the need to tax betting winnings. Governments tax both operators and players, which makes for massive revenue. The National Federation of Uruguayan Gaming also uses gambling taxation revenue as the basis for incentivizing the state to create clear legislation for licensing and monitoring online casino operators. As things stand, Uruguay only taxes gambling revenue and winnings from the land-based casinos. The state also collects tax from online lotteries and sports betting platforms licensed to provide services to the Uruguayan market. 
In 2018, the government approved a ban on offshore websites and introduced new tax laws for state-licensed operators. The law, dubbed the Accountability Law, received a 30-6 senate vote, expressing the strong position of the South American state. The law explicitly prohibits all forms of online poker and casino products via remote channels. However, loopholes in the regulations allow Uruguayans to join and bet in online casinos hosted abroad to target other markets. For state-approved operators, including approved casinos, gaming halls, racetracks and sports betting shops, the new tax rate is 0.75% on total gambling turnover (bets placed by players).
Prizes offered by casinos will also be taxed according to Impuesto a la Renta de las Personas Físicas laws, which refer to income tax on natural persons. Prizes that are 71 fold inferior to the bet amount are exempt from taxation. Uruguay has reported growth in tax revenue since 2015 and the trend is set to continue, primarily if online casinos are finally regulated. The state generates at least $100 million every year in gambling tax revenue. However, none of this income is from online gambling, which is yet to be regulated. The only bets included are those from Supermatch, the country's only licensed online sports betting operator.

Legal forms of online gambling

As mentioned multiple times above, La Banca is the only state-licensed operator allowed to provide online betting products, specifically sports betting, in the country. Through its Supermatch brand, the casino offers various gambling products, including:
  • Sports betting – This is the most popular form of online gambling in Uruguay and many other Latin-America countries. Supermatch offers online sports betting on real sports events and sealed a partnership with NBA to offer betting odds on the infamous basketball league. Players can bet on several other professional sports, including soccer, baseball, racing and pari-mutuel. Domestic sports betting opportunities remain limited.
  • Virtual sports betting – In addition to real events, Supermatch offers virtual sports betting in three main disciplines. Virtual sports betting has become a popular trend in online casinos and sportsbooks. Players in Uruguay can bet on virtual soccer, motorsports and ping pong. These are the only options at the moment, although Supermatch has permission to come up with new virtual sports games and bets.
  • Lottery – This is one of the first forms of gambling to be legal in the country. Players can purchase lottery tickets online and withdraw winnings without visiting an offline betting location. The lottery is a state monopoly gambling product, although the regulations have changed significantly since the first national lottery in 1819.  
  • La Banca gambling products – Since La Banca is licensed to offer online betting products, players can enjoy other games provided in the land-based casino. This includes games like Quiniela and Tombola, which are Keno variants and eRaspadita, a type of scratchcard. 5 de Oro Lottery is also available online.
Uruguay land casinos have many legal gambling products, including slot machines, blackjack, roulette, baccarat and poker. Horse racing bets are popular in offline locations. Bingo halls also offer classic and modern bingo games variants, including 90-ball, 80-ball and 75-ball bingos. Although the state prohibits offshore betting websites from operating in the country, Uruguayans have access to many gambling websites worldwide. UK and US betting firms continue to provide rich selections of games in all categories, including live dealer casinos. Unfortunately, there’s no state-licensed operator providing these games in Uruguay. 

Future of online casino regulations

Uruguay online casino regulations are yet to come, but there's hope for a fully regulated market in the near future. FENAJU and other organizations are working to incentivize the state to pass regulations that will create a proper legislative framework from approving and licensing online casino operators. This push is poised to mount as neighbouring countries start to realize the benefits of gambling tax revenue. Online casinos are rapidly growing globally and offer a convenient way from interested players to enjoy games without leaving home. Because of this, Uruguay will, at one point, feel the need to regulate online casinos as Colombia has done. Nonetheless, the small South American country only has a population of 3.5 million, and with strict laws prohibiting offshore websites, foreign investors aren't too eager to mount the push for a legal online gambling scene. Such pursuits are left to the National Federation of Uruguayan Gaming.

Summary

Online gambling is unregulated in Uruguay and there's no state-licensed online casino operator in the country. A license held by La Banca offline casino allows the operator to provide remote sports betting and a few other products like the lottery, keno and scratchcards. However, when it comes to core online casino products, like virtual slots, table games, video poker and live dealer, punters rely on offshore websites. On the other hand, land-based gambling is fully regulated and there are many state and privately owned casinos on the land. Currently, no active bills are pushing for a legal online gambling market, but this is bound to happen anytime in the future.