The Future of Sports Betting in Puerto Rico

Quinn Allen
By , Updated on: Dec 19, 2023 07:00 PM
The Future of Sports Betting in Puerto Rico

Puerto Rico Focused on Esports Betting

Puerto Rico has always been something of a haven for bettors. They have 17 legal gambling facilities located across eight different cities, and because of their proximity to the United States, as a U.S. territory themselves, they've always served a unique-yet-monstrous demographic of tourists.

Still, like many other places, Puerto Rico has always had somewhat murky, if nonexistent, guidelines when it comes to remote betting. Those who reside there have access to offshore websites, just as they would elsewhere, but it has never technically been legal. Nor has there ever been an official ruling on the legality of esports wagering.

That is, until now.

The coronavirus pandemic has forced casino closures and adjusted hours of operation, all while completely obliterating the overnight hospitality business associated with attached hotels. Business models have needed to adapt as a result. And in Puerto Rico's case specifically, the global pandemic has served as an impetus to formally legalize esports betting and expand its online gambling reach.

“An advisory committee has already been created to deal with online gaming, which shows the government is committed to promoting esports in Puerto Rico,” José Maymo Azize, Head of Puerto Rico’s gambling regulator said at GAT Virtual Expo, per Esports Insider. “In fact, in light of the ongoing COVID-19 pandemic, we have doubled our resources to speed up the creation of the necessary regulation aimed not at legalizing esports, which are already allowed in Puerto Rico, but to introduce wagers on that activity, together with traditional and fantasy sports betting.”

This news stands to benefit not only places like Draft Kings and FanDuel, but more traditional online sportsbooks like Bovada, BetOnline, BetNow, and any other places that offer virtual sports wagering options. What's more, Puerto Rico is also in the process of making their overarching betting laws more operator-friendly—to such an extent that their overall gambling presence might mirror that of a powerhouse before long.

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Puerto Rico Becoming Ultra-Friendly for Sportsbook Operators

New laws in Puerto Rico now allow for territory-wide mobile sports betting with remote user registration and on-site wagering at a bunch of different spots. They also call for lower tax rates: 7 percent on gross revenue from retail betting locations, and 12 percent for mobile and online betting companies.

There is no overstating the impact of this discount. For comparison's sake, FanDuel is required to put away 24 percent of its profit margin in preparation of yearly taxes owed to the United States' Internal Revenue Service. Puerto Rico is essentially cutting that in half, which is a major difference.

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All Licenses Owned.

Offering such cheap tax rates is seen as underhanded by some. But the idea is to convince companies like FanDuel and Draft Kings to count those in Puerto Rico among their most important demographic. It's tough to do that without slashing fees, because, as we already noted, this is a territory known more for its tourist foot traffic than actual citizenship.

On top of that, Puerto Rico's new online betting laws do not call for "integrity fees or royalties to the professional sports leagues." That is yet another stark contrast from how sportsbooks currently must do business in the United States. For example, while NBA betting has become a major market, the league itself is entitled to take a cut of sportsbook profits. The NBA has also tightened their grip on the industry by partnering with specific sportsbooks, which in turn funnels a lot of business toward singular locations.

Viewed through this lens, Puerto Rico is incentivizing sportsbooks—and even retail betting operations—to increase their presence within the territory. The hope is that these lower taxes and smaller fees will have a huge impact on their economy. It's too early to see whether this will pay off. The full scope of ramifications won't be known until retail betting locations have returned to normal, post-pandemic. But it's a line of thinking certainly worth monitoring.

How Might Puerto Rico's Gambling Laws Trickle Over to the US?

The answer to this question is complicated. It could be that Puerto Rico's laxer gambling protocols won't convince the United States to progress their own at a faster rate. The U.S. is already starting to open up their sports-betting doors, and Puerto Rico has housed plenty of gambling opportunities for quite some time, without actually having influence over how the U.S. operates.

At the same time, having a U.S. territory accommodate betting operators to this degree might shine a light on how many states are lagging behind the sports-wagering. Among USA's 50 states, only the following have officially legalized online sports betting in some form:

For those keeping score at home, that's only 19 of 50 states. And while others are considered to be very close to legalizing online sports wagering—with North Carolina, South Dakota, and Louisiana leading the way—that still leaves more than half of the U.S. without officially allowed access.

Expect this to change soon—real soon. It may not be thanks to Puerto Rico pushing the bill specifically, but their policies will be a factor during talks in states that are further away from approving online sports betting, such as IdahoUtah, and Wisconsin.

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Meet the author

Quinn Allen

Quinn Allen leverages his broadcast journalism degree and passion for sports in his betting previews and analysis. Based in Kelowna, Canada, he has emerged as an expert voice with picks featured on OSB, MTS, SBD, and as a ClutchPoints editor. With a lifelong fandom of...

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