Panama authorities confirmed the removal of a 5.5% tax on casino winnings and betting payouts, a move designed to lure back international gamblers and revive the country’s struggling visitor economy.
The announcement was made by Panama’s Gaming Control Board (JCJ), which operates under the Ministry of Economy and Finance. Officials said scrapping the tax will help the country compete more effectively with Caribbean and U.S. gaming destinations where similar player taxes are not imposed.
Originally introduced in 2015, the levy applied to winnings and cash redemptions from casinos, sportsbooks, bingo halls and slot machines. At the time, the measure was created to help fund increased pension payments, but industry leaders have long argued it discouraged high-spending international visitors.
JCJ Secretary Manuel Sánchez said removing the tax is expected to provide a direct boost to tourism and hospitality businesses.
“The elimination of the tax will support the hotel and tourism sector because players will get better value when traveling to Panama,” Sánchez said.
The decision follows a sharp decline in gaming revenue. During the first eight months of the year referenced in the announcement, gambling collections totaled $50.8 million, down 33.2% year-over-year.
Tourism remains a major pillar of Panama’s economy, contributing as much as 10% of GDP. However, hotel occupancy rates in some periods have slipped below 45%, leading to significant job losses across the hospitality sector.
Officials believe the tax particularly hurt the country’s appeal among high-rollers and international casino visitors, many of whom also spend heavily on hotels, restaurants, nightlife and luxury services beyond the gaming floor.
For years, Panama positioned itself as a regional gaming hotspot, attracting visitors from across Latin America who combined casino vacations with visits to landmarks such as the Panama Canal and the country’s beach destinations. Industry insiders say the player tax gradually pushed some of that business to competing markets.
At the same time, authorities acknowledged the growing pressure from online gambling operators, a sector expanding globally at an estimated annual rate of 10% to 12%. Unlike land-based casinos, online gaming platforms typically operate under different tax structures and lower operating costs.
While online operators often pay gross gaming revenue taxes, traditional casinos continue to face higher expenses tied to staffing, utilities and real estate.
Alongside the tax repeal, the JCJ unveiled additional regulatory measures aimed at modernizing oversight of the gaming industry. Plans include the launch of an integrated electronic monitoring system for operators, as well as the hiring of additional auditors to improve enforcement and revenue collection.
Casino operators welcomed the move, although some noted the relief currently applies mainly to table games at full-service casinos. Industry representatives are reportedly calling for broader reforms across other gaming categories to accelerate recovery.
No formal implementation date has yet been confirmed, with authorities saying the process will require coordination with the Ministry of Economy and Finance.
Still, the policy shift signals a broader strategy to revive Panama’s tourism competitiveness by easing the burden on international visitors.
