The gambling industry in Panama is experiencing a resurgence, outpacing its performance in 2022 and leaving the pandemic-induced crisis in the rearview mirror. Yet, industry insiders assert that the growth rates achieved in 2019 will likely remain unparalleled until 2025, contingent upon a resurgence in tourism.
Recovering the pre-pandemic rhythm
Unquestionably, Panama’s economy was among those most severely impacted by the COVID-19 pandemic that erupted in 2020. Given its focus on tourism and ancillary sectors, the cessation of operations in hotels and casinos dealt a significant blow to both private enterprises and the government. However, the recent revitalization of all sectors has led to a semblance of stability in economic indicators.
Manuel Sánchez, the General Director of the Gaming Control Board (JCJ), corroborated this sentiment. He emphasized that the gaming sector has reclaimed its 2019 performance levels. From a regulatory standpoint, there is an optimistic outlook for a 10-12% increase in gaming revenues this year. Such an uptick would restore the sector’s revenue streams to their pre-crisis zenith.
While the JCJ had anticipated full-scale resumption of activities by this juncture, Sánchez revealed that they are currently operating at 99% capacity. Announcements at the 7th Ibero-American Gaming Summit earlier this year may have been overly sanguine, yet the trajectory toward recovery appears increasingly robust. The gaming industry provides employment to an estimated 100,000 individuals in Panama.
Sánchez also divulged that a staggering $2.5 billion was wagered last year, and projections for 2023 indicate even higher figures. The JCJ is augmenting its focus on responsible gaming through the establishment of Gambling Prevention and Care Centers. These centers, a collaborative effort with Panamanian gaming operators, will offer complimentary clinical and psychological services. The inaugural centers have been launched in San Miguelito and Bella Vista.
Some objections from industry representatives
However, there exists a lack of unanimous agreement regarding the pace of recovery within the Panamanian business community. While the climate appears increasingly conducive for gaming, not all sub-sectors have rebounded to their pre-pandemic vitality.
Antonio Alfaro, the President of the Association of Gambling Administrators (Asaja), opined that the industry’s revival has been sluggish. He believes that the journey to reclaiming the 2019 benchmarks will be protracted, potentially extending until 2025.
Alfaro identified two primary impediments to the industry’s growth: the sluggish local economy and a dip in tourism. Post-pandemic, Panama has struggled to elevate its populace’s standard of living and purchasing power, adversely affecting the entertainment and leisure sectors. The tourism industry, although operational, has yet to regain its pre-crisis momentum.
William Downing, the Director of Cirsa Panama, echoed these sentiments. His company’s data suggests that the 33 gaming rooms across the nation have not yet recaptured their pre-2020 vibrancy. Nevertheless, he noted that the financial metrics for 2023 are markedly superior to those of the previous year.
A central sector for economic development
Panama ranks as the tenth-largest economy in Latin America and has frequently featured among the top 10 most unequal nations globally. Since the turn of the millennium, its GDP has witnessed substantial growth, fueled by the stimulation of the entertainment sector, underpinned by tourism. The oscillations in this sector have a cascading effect on the economically disadvantaged strata, who bear the brunt of any economic downturns.
Annually, the gaming industry contributes an average of $10.7 million to social security and disburses approximately $90 million in salaries. These contributions are in addition to the annual remittances to the National Treasury.
The advent of online gaming has ushered in new vistas of opportunity in Panama. However, the infiltration of unauthorized platforms has prompted regulatory scrutiny. Regulatory adjustments are anticipated, in line with trends across Latin America. The burgeoning field of sports betting could potentially serve as a lucrative revenue stream for the industry.
The surge in job applications for the Durango Casino & Resort in Las Vegas aligns with the broader trend of rapid growth in America’s gambling industry. This heightened interest in job opportunities within the gaming and gambling sector reflects the public’s increasing engagement with these industries. The phenomenon not only underscores the sector’s economic potential but also signals its rising prominence as a key player in job creation and tourism.