The Dispute Over the Paraguayan Sports Betting Tender Continues
In Paraguay, several would-be sports betting operators have been up in arms about a decision made regarding the latest public tender. In this particular LATAM country, the operation of all sports betting activities is run by one company, as chosen by the gaming administrator Conajzar. Unfortunately, despite much back and forth in the preceding months, the companies involved are still unhappy with the decision and plan to contest it in court.
Conajzar has been charged to provide documents to the court regarding its recent sports betting operator decision. ©Joakim Honkasalo/Unsplash
The latest news in the Daruma Sam controversy
The company at the heart of the sports betting bid controversy in Paraguay is Daruma Sam, otherwise known as Apostala, which was responsible for managing sports betting in the country for the last license period. Thanks to the recent bid decision, which took several months to complete in fall 2022, Apostala was granted another five year operating period.
However, the main two companies that Apostala beat in the bidding process remain unsatisfied with the decision, and with Conajzar’s explanations for it. These companies, the B-Gaming / Gambling SA Consortium and Play Tech, have appealed the decision. After being denied repeatedly by Conajzar, they have resorted to bringing the matter to court.
Paraguay’s executive branch confirmed Conajzar’s decision to re-release the tender to Daruma Sam. However, the matter will be reviewed in court. Specifically, the Permanent Commission of Congress has agreed to request reports from Conajzar which should help shed light on the bidding process. These reports, once provided, will be reviewed by members of parliament to help confirm whether or not everything in the process was above board.
The consortium involved in the case has confirmed, via representative Néstor Povigna, that it will consider filing an appeal against Conajzar as well as against the executive branch of the government for its involvement in the matter. Povigna shared that they have until the 9th of February 2023 to make the next step of the appeal process. In essence, the appeal would be a civil lawsuit.
Their main argument is that Daruma Sam did not provide the right documentation, and therefore should not have been granted the tender. They also claim that the consortium had the highest offer on the table — valued at $5 million USD higher than Daruma Sam’s. To Povigna, it follows that Daruma Sam’s bid should have been disqualified by Conajzar given these facts.
Instead, Conajzar, the executive branch, and the Treasury Advocacy all came down in favor of Daruma Sam. This aligned with fears expressed by the competing companies early on in the bidding process, who alleged that Conajzar was working to keep Daruma Sam in power and that corruption was at play.
Play Tech’s representative Luis Carlos Alder Benítez likewise requested a pause in the bid proceedings earlier this month. However, his request has not yet been answered. Still, the controversy has attracted enough attention from the government to warrant the extra look into Conajzar’s process and documents. These might reveal more to the case, or confirm that everything followed standard procedures, meaning that the case will have to be dropped once and for all.
Meanwhile, Apostala’s shareholders are under investigation for money laundering. This was reported by Paraguay’s Specialized Unit for Economic Crimes and Anti-Corruption. Fiscal agent Juan Ledesma is one of the people investigating the matter, which will also likely come into play when it comes to the sports betting tender bid.
Throughout the process, both Conajzar and Daruma Sam have held firm in their belief that there was nothing unusual about this bidding process, from the time granted for proposals to the ultimate decision to stick with the existing sports betting provider. If anything extraordinary is revealed during the investigation, it could cause negative effects for the gaming administrator and also may result in a major overhaul of how public tenders are handled in the future.
