Paraguay Modernises Gambling Law Amid Digital Growth

Paraguay has taken a significant step toward updating its gambling framework by expanding the scope of Law No. 1016/1997, the legislation that governs games of chance. The reform seeks to strengthen oversight, improve transparency and adapt regulation to the rapid evolution of the gaming sector, particularly the rise of digital betting channels.

To assess the impact and implications of the reform, Javier Balbuena lawyer, director of Gaming Consultores and former president of the National Gambling Commission (CONAJZAR) shared his analysis with SBC Noticias, outlining the opportunities, risks and structural adjustments introduced by the new regulatory model.

Balbuena described the reform as one of the most substantial regulatory shifts in Paraguay’s gaming industry in the past decade. He noted that the changes modernize a framework that had become outdated from both a technological and operational standpoint. However, he cautioned that the true effectiveness of the new system will only become clear with time. “Only with experience will we know whether this structure actually delivers efficiency,” he said.

Objectives of Modernization and Early Hurdles

According to Balbuena, the reform was designed to close longstanding regulatory gaps and establish clearer procedures for licensing, concessions and regulatory enforcement, supported by stronger institutional coordination. A key advancement is the formal recognition of digital gaming formats, which had previously operated without comprehensive legal coverage.

Despite these improvements, Balbuena stressed that Paraguay is still in the early stages of implementation. He argued that at least a full year of operation under the new framework will be required before its effectiveness can be properly evaluated. He also warned that excessive administrative layers could slow decision-making, noting that overlapping responsibilities may become a barrier to efficiency. In the short term, he said, standardizing procedures is essential, while the medium-term goal should be the consolidation of a regulatory system that is modern, transparent and sustainable.

Institutional Changes and Governance Structure

One of the most significant aspects of the reform is the restructuring of CONAJZAR, which now operates as a decentralized entity under the National Directorate of Tax Revenue (DNIT). Balbuena characterized this shift as a deep institutional transformation.

Under the new arrangement, DNIT assumes a broader supervisory role focused on policy alignment, tax control and coordination among government bodies. CONAJZAR, meanwhile, retains its technical expertise in regulation and enforcement. The reform also established the General Directorate of Games of Chance, an executive and technical body tasked with overseeing control policies, producing industry statistics, monitoring concessions and coordinating operations.

Balbuena emphasized that the success of this structure will depend on minimizing duplication and bureaucratic delays. “The challenge is ensuring that integration strengthens rather than weakens the regulator’s technical capacity and its ability to respond to market dynamics,” he said.

Market Growth Driven by Digital Gaming

From a financial standpoint, Paraguay’s gaming sector is experiencing record growth. By October, industry revenues had already exceeded 177 billion guaranies, surpassing the previous year’s total. Balbuena attributed this performance to structural factors such as automatic adjustments in concession values, as well as the expansion and normalization of online gambling platforms.

He identified online gaming, particularly digital sports betting as the main engine of growth. Additional contributors include the modernization of lottery products, the relocation of slot machines into regulated environments and the adoption of digital bingo formats.

Investment Outlook and Long-Term Sustainability

Looking ahead, Balbuena said the priority should be to position Paraguay’s gaming sector as an attractive destination for investment. He noted that opportunities extend beyond gaming operations to include technological infrastructure, data management and specialized software and service providers that can generate broader economic value.

“If the industry can provide clear rules, legal certainty and predictability, it will draw domestic and international investment, create formal jobs and increase fiscal contributions,” he said.

At the same time, Balbuena stressed the importance of strengthening oversight mechanisms, combating illegal activity and money laundering and reinforcing player protection policies to ensure sustainable industry development.

A Framework With Potential

Paraguay’s updated gambling legislation represents a decisive move toward modernization and institutional alignment. However, Balbuena concluded that its success will ultimately depend on effective execution, coordinated governance and the ability to balance strict oversight with operational efficiency.

Only once the system has matured, he said, will it be possible to determine whether the reform achieves its goal of creating a transparent, competitive and future-ready gaming industry.