Dominican Republic Gambling Revenue on the Rise, According to Latest Stats
Posted on: September 11, 2023, 07:11h.
Last updated on: September 11, 2023, 01:59h.
Despite the complications brought on by the COVID-19 pandemic, new stats show the market is rebounding in the Dominican Republic (DR), and revenue is improving.
Statistics from the General Directorate of Internal Taxes (DGII, for its Spanish acronym) show that gambling revenue grew by 6.5% in the first six months of the year compared to the first half of 2022. While not substantial, the increment is still commendable, taking the revenue from DOP2.03 billion (US$35 million) to DOP2.16 billion (US$37 million).
Tax Revenue on the Rise
As a result of the performance, tax revenue has registered an increase of 35.4% between 2015 and 2022, according to the DGII. During those seven years, the DR has gone from receiving DOP2.58 billion (US$43.3 million) from the gambling industry to taking in DOP3.5 billion (US$61.46 million). This significant uptick emphasizes the growing role of the gambling sector in the country’s fiscal revenue generation and overall economic performance.
Of all the segments within the gambling industry, sports betting has reported the highest revenue. In 2022 alone, this segment generated an impressive DOP1.42 billion (US$24.8 million) compared to the data from 2015, where the revenue stood at DOP1.2 billion (US$21 million).
This represents a growth of 17.9%, but was also influenced by an increase in the sales tax on sports betting banks. This has increased by 24% since 2015, from US$4.1 million to US$5 million.
If the current betting momentum persists into the year’s second half, projections indicate that total revenue in 2023 could reach a significant DOP4.21 billion (US$74 million). This potential growth represents a noteworthy 21% increase over last year’s DOP3.64 billion (US$64 million).
In the last seven years, the three segments demonstrating the most substantial growth were lottery prizes, slot machines, and telephone games, typically involving sweepstakes via text messages. These segments exhibited impressive returns of 93%, 49% and 33.7%, respectively.
However, DR’s gaming industry has faced major setbacks in recent years. In 2017, the sector lost 54.1% of its market. The impact of the COVID-19 pandemic further exacerbated this trend in 2020, causing revenue to plummet to an all-time low of DOP1.86 billion (US$32 million).
This marked a 38.4% decrease from 2019’s DOP3.03 billion (US$52 million) – a year already adversely impacted by a spate of tourist deaths in the country. Nevertheless, the industry began to show signs of recovery in 2021, with revenues rebounding to DOP2.8 billion (US$50 million).
The lowest revenue year for DR’s gaming industry was 2020, with total proceeds dipping to a dismal DOP1.86 billion (US$32 million). This drastic drop in revenue, representing a 38.4% decrease from 2019’s DOP3.03 billion (US$52 million), can be primarily attributed to the global COVID-19 pandemic, which severely disrupted the global gaming industry.
The adverse impact of the pandemic was further compounded by incidents of tourist deaths in the country, which had already negatively affected the industry in 2019. However, showing remarkable resilience, the industry began to rally in 2021, with revenues making a significant recovery to reach DOP2.8 billion (US$50 million).
Revitalizing DR’s Gaming Market
The upswing in the Dominican Republic’s gaming revenue can be largely attributed to the shift that began among sports betting operators in 2021. Until then, the segment largely operated without stringent controls or oversight.
Recognizing this gap, the DR initiated key changes, announcing a transition period for operators to migrate into a regulated space. The original time line allocated April and May of 2021 for operators to apply for and receive permits.
However, because of widespread delays, the deadline was extended, and by October 2022, the regulators began to enforce compliance. Betting operators who had not submitted the necessary paperwork found themselves having to shut down their operations.
Despite a few operators running without a license, the overall improvement in segment regulation promises to continue driving the growth of the DR’s gaming revenue.
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