A court ruling in Puerto Rico has sided with businesses seeking to restore a transparent and competitive framework to the distribution and licensing of gaming machines.
The appeals court of San Juan has deemed that inconsistencies of Puerto Rico’s laws governing “MAJAR” gaming machines installed in bars, shops and small venues are no longer enforceable.
As such, the Gaming Commission of Puerto Rico (PRGC) must begin reintroducing a licensing application and regulatory framework for businesses that wish to provide MAJAR gaming machines.
The PRGC will oversee the enforcement of laws related to Puerto Rico Casino sectors, gaming halls, sports betting franchises, gaming machine distribution and horse racing.
The individual laws for gambling disciplines will be maintained under separate acts, as Puerto Rico is yet to develop a standardised charter to govern the country’s gambling sector.
In 2024/2025, 30 domestic businesses brought an appeal to San Jose, disputing the reasons why the PRGC had denied their venues the right to process gaming machine licences under the new regulatory framework introduced by Regulation 9647.
The San Jose determination concluded that the PRGC could not indefinitely delay nor refuse the processing of applications, while simultaneously imposing new compliance obligations on operators.
The court held that businesses had the right to seek licences under the existing legal framework and that the regulator was obligated to establish a functioning “administrative pathway for applications to be reviewed and adjudicated”.
Pathwork rules and statutes
Patchwork rules and statutes
The dispute has exposed the fragmented nature of Puerto Rico’s gambling laws, where casino gaming, sports betting, route gaming machines and online wagering are governed through a patchwork of statutes and administrative regulations rather than a unified gambling code.
At the centre of the conflict are MAJAR machines: slot-style gaming terminals that tend to be installed outside casinos in authorised venues such as bars, restaurants and convenience stores.
For years, the market operated in a semi-regulated environment with thousands of machines distributed across the island under inconsistent oversight.
Puerto Rico authorities sought to modernise the system through Regulation 9647, approved in January 2025 by the Financial Oversight and Management Board. The framework introduced mandatory licensing for each machine, visible registration tags, digital monitoring systems and a requirement that all machines connect to a centralised technological platform overseen by the regulator.
The PRGC formally launched the interconnection programme in January 2026, giving operators 90 days to prove that they had contracted certified technology suppliers capable of linking their machines to the government monitoring network.
Regulators argued that the reforms were necessary to improve tax collection, increase operational traceability and clamp down on illegal gambling activity, which remains widespread across Puerto Rico.
Industry estimates continue to suggest that unlicensed operators control a dominant share of the island’s gaming machine and online gambling activity.
Operators claimed the regulator was selectively enforcing the rules and preventing legitimate businesses from entering the legal market.
The court ruling now means that the PRGC is obligated to process applications and reopen the licensing pathway for operators wishing to regulate their businesses under the new framework.
The case carries significant implications for Puerto Rico’s broader gambling market. Gaming revenues generated through machine licensing and oversight contribute to public finances, including funding tied to the Puerto Rico Police Retirement System.
