President Hugo Chávez’s plans to increase spending on social projects are set to increase taxes across all sectors of the Venezuelan gambling industry.

The defeat of President Hugo Chavez’s controversial plans to alter the Venezuelan constitution could lead to a deceleration of Chavez’s plans for reforms, analysts believe. The result of Sunday’s vote will be welcomed by the country’s gambling industry as media reports had suggested that the President could use an increased mandate to impose further, dramatic restrictions on gambling activities.

Venezuela’s controversial President Hugo Chávez has hinted that he may make moves against casinos and bingos as part of his plans to install “21st century socialism” in Venezuela.

Bingo and casino bosses have met with the Venezuelan tax agency to propose amendments to new legislation that came into force at the beginning of July and which they claim threatens the livelihood of bingo hall owners, particularly in the interior of the country.

Hard on the heels of an import ban on slot machines and stiff gaming tax increases introduced last year, the Venezuelan government has sent shockwaves through the country’s gambling industry by imposing a three-year moratorium on the issue or renewal of licences for casinos and bingo halls.

Dramatic tax increases, import bans and clampdowns on non-compliant gambling businesses in Venezuela are causing operators to seek out opportunities in neighbouring Colombia where the regulatory climate is friendlier, increasing the pressure on the Colombian authorities to tackle the significant amount of underground gambling that continues to take place in the country.

Venezuela’s tax authority is set to impose new taxes on lottery winnings in the country, with the rates payable for prizes won on unlicensed lottery games set at 34 percent, more than double that applied to officially sanctioned lotteries.

The government of Hugo Chavez has ordered ATMs to be stripped from all Venezuela’s remaining casinos and bingo halls, as a crackdown on unlawful gambling businesses intensifies.

Reports in Venezuela suggest that President Hugo Chávez is preparing to move against the country’s private bingo, casino and lottery operators once a new constitution is approved in December 2007 in an ideologically driven crackdown on the country’s gambling industry.

SENIAT, the Venezuelan tax agency, has warned bingo and casino operators in the country that they risk facing sanctions if they fail to comply with new legislation that greatly increases the tax burden on Venezuelan gaming operators. Many operators continue to insist however that the impossibly steep tax hike makes compliance impossible.