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Paraguay Attempts To Exit Slot Machine Scandal

June 27, 2022
​​​​​​​Paraguay’s gaming regulator, Conajzar, is trying to move on from its slot machine scandal and focus on a sports gambling tender, as its former boss piles on criticism of his ex-employer.

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Paraguay’s gaming regulator, Conajzar, is trying to move on from its slot machine scandal and focus on a sports gambling tender, as its former boss piles on criticism of his ex-employer.

Former Conajzar boss Javier Balbuena has also criticised the organisation for the way in which it chose to handle the scandal.

Last week, Conajzar revoked a slot machine contract awarded to beleaguered company iCrop S.A., which stands accused of money laundering. Eight former and current Conajzar workers are under investigation in relation to the scandal.

Yet despite the resolution annulling the contract, Balbuena said Conajazar has undermined its own credibility.

Specifically, in the resolution of revocation, Conajzar calls the resolution awarding the contract valid and legal, despite the fact that the Comptroller, the Ministry of Finance, and others all cited legal problems with the award.

“In this way, the Attorney General's Office gave a nod to the illegality of the authorisation of the company iCrop S.A., generating little credibility for the institution dependent on the executive branch of government that should defend the interests of the state,” said Balbuena.

He added that although a follow-up resolution successfully removed iCrop from the market, which was the end goal, Conajzar should have declared the resolution that granted the contract illegal in its entirety.

Looking to the future, Balbuena expects Conajzar to move forward and finalise “the drafting of terms and conditions” of a sports-betting tender. The previous tender for sports betting occurred at the end of 2017 and lasts for five years.

Balbuena emphasised that, at this point in time, Conajzar should be readying bidding terms and conditions so that when the time comes for public offers, they are ready.

He noted that of particular importance is establishing a base fee: “The regulator's challenge in this regard will be to find an average base fee, between the one established in the last bidding terms and conditions (12 percent of net win) and the awarded fee (21 percent of net win), so as not to generate fanciful formulas that discourage future bidders".

Balbuena, who stepped down from his role leading Conajzar in 2018, has long criticised his former organisation, particularly regarding the iCrop scandal.

He told local media and VIXIO that Conajzar had undermined its own legitimacy and the legitimacy of the resolutions by “issuing a resolution that stopped being enforced because another law had to be enacted ratifying what already existed. A law had to be sanctioned to revoke a contract granted in an erroneous way.”

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