There are approximately fifteen casinos in Puerto Rico. The largest and most successful are in San Juan near the Condado Beach area. The casinos are all contained within hotels. Hours are restricted to afternoons and evenings. There is no live entertainment within the casinos. Casinos are restricted in size, with most offering less than 10,000 square feet of gaming space.
Table games, blackjack, baccarat, and craps are operated by the private casinos, and slot machines are operated by the Puerto Rican Tourism Company, a government agency that regulates the casinos. The government takes the revenue from the slots and returns a portion to the casinos. The number of slots is limited by a formula based upon the actual number of players at table games.
The most prominent casinos are the Condado Plaza, the El San Juan, the Sands, and the Hilton.
These properties draw tourists from the United States. The very high cost of hotel rooms and high occupancy rates limit opportunities for extensive gambling junketing, however. Local residents are permitted to gamble, although the casinos cannot direct advertising to the local market.
It is difficult to determine the rate of taxation on the casinos. Changes in the rates were made in 1989. As the casinos yield considerable potential revenue by not controlling the slots, it may be estimated that the tax rate in reality is about 20 percent of the gross win.
The Puerto Rican casinos have potential marketing advantages over other regional casinos, as San Juan is a major airport hub for the Caribbean, easily accessible to other American cities, and as Puerto Rico is a U.S. jurisdiction with no currency restrictions for Americans. Disadvantages, however, include high room costs and U.S. taxation reporting requirements.
Several of the casinos in Puerto Rico have been suffering financial trouble. These problems are attributed to heavy taxation and to mismanagement, especially in the area of credit policies. Nevertheless, there have been several applications for new casino licenses in recent years, and new casinos have opened.
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