(AsiaGameHub) –   A court ruling in Puerto Rico has sided with businesses seeking to restore a transparent and competitive framework for the distribution and licensing of gaming machines.

The appeals court of San Juan has deemed that inconsistencies in 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 wishing to provide MAJAR gaming machines.

The PRGC will oversee the enforcement of laws related to Puerto Rico’s casino sector, 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 has not yet developed a standardized charter to govern its 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 licenses 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 licenses under the existing legal framework and that the regulator was obligated to establish a functioning “administrative pathway for applications to be reviewed and adjudicated.”

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 center of the conflict are MAJAR machines: slot-style gaming terminals typically installed outside casinos in authorized 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 modernize 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 centralized technological platform overseen by the regulator.

The PRGC formally launched the interconnection program in January 2026, giving operators 90 days to prove 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.