Paraguay’s Sports Betting Controversy Receives Feedback
The growing sports betting vertical in Paraguay has received suggestions from Conacom, the National Competition Commission for the country. These recommendations aim to improve the functioning of the betting sector, particularly in regard to how its bid for operators is handled. The sector recently went through a controversy over this matter when Daruma Sam SA was given another five year license to operate sports betting in Paraguay.
Conacom has found barriers to competition within Conajzar’s bidding process for its sports betting tender, which it now advises the organization to remedy to increase fairness in Paraguay.
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Conacom finds competition barriers in Conajzar guidelines
Conajzar, Paraguay’s National Gaming Commission, made the decision to renew Daruma Sam’s tender for operating sports betting in the country about six months ago. This decision was fought by other potential operators who had attempted to bid for the license, though ultimately, Daruma Sam has indeed continued its management of sports betting in Paraguay.
However, the decision (and bidding process) was analyzed by a third party, Conacom. Conacom’s board has now given its findings to Paraguay’s Ministry of Finance as well as to Conajzar, since the two bodies will work in tandem to ensure necessary changes are made.
Conacom’s feedback is in direct response to “Opinion D/11/2022” which was written when Daruma Sam’s bid was accepted, and its license was renewed for another five years in late 2022. Conacom has now issued “Opinion D/04/2023.”
Conacom’s feedback includes information from Conajzar as well as other stats compiled from industry leaders. In line with the criticism that was lobbed at Conajzar and Daruma Sam in 2022, Conacom has determined that the current process creates a barrier to competition in the sector.
Specifically, Law No. 1016/97, which pertains to Games of Chance, deals with the bidding process. As it stands, bidders cannot find out the conditions of the tender before getting a copy of the information. During this bid, Conajzar was criticized for a short turnaround time between releasing this information and cutting off applications from bidders.
Daruma Sam was seen as having an advantage, having gone through the process previously. Furthermore, Conacom has ruled that the specifications themselves are troublesome, and that some information within would also represent a barrier to competition from new operators.
Conacom’s aim is to address fairness and competition in Paraguay’s industries, therefore its point of view on the matter is that competition should be allowed and encouraged where possible. Their statement says that of course Conajzar is within its rights to select guidelines for potential bidders, since they are the ones who know what is needed from those seeking the operation license.
However, it continues that any barriers to competition must be absolutely justified. As of now, it seems they are not fully justified and therefore require further explanation or alterations to be made. According to Conacom, these changes are necessary for the health of Paraguayan industry and society.
Conacom outlined a few specific issues to be addressed by Conajzar and the Ministry of Finance. They include: The costs outlined in the specifications, which are not objectively proportional; the current ban on international companies, which may have quality experience in the field; how financial solvency is defined or determined.
They also pointed out that specifications currently exclude any people who have been charged for involvement in clandestine gaming, whereas they should only exclude those who have been fully through the legal process and found guilty.
Further issues were the unnecessary duplication required for registering, accessibility and the number of places companies could submit their bids to. Conacom’s overall suggestion is that Paraguay’s government take over changes to address these points. They also asked that Conajzar undergo a technical study on their own process.
