The Treasury Department’s request for summary judgment and the dismissal of a request for declaratory judgment submitted by The Puerto Rican Association of Hotels and Tourism (PRHTA), have both been rejected by Superior Court Judge Gloria Maynard Salgado, effectively voiding legislation that would have legalized video lottery terminals (VLTs) in the U.S. Territory.

After the announcement in August that Puerto Rico’s Treasury Department would begin to accept bids for VLT’s in Q1 of 2016 PRHTA when to court in July 2015 to challenge regulations which would pave the way for the legalization of the gaming devices in the country. The claim by the association is that several laws are violated in the new regulations as well as the country’s public policy on gaming devices outside of casinos. Those include; changes to gaming laws may only be made by the Legislature, and while permitted to regulate the operation of games, the Secretary of State may not authorize new games.

In May last year, the Treasury approved both of the regulations and used gaming legislation from 1989 to do so. An amendment to the old act, which would make a number regulations void, was proposed by the Legislature. The PRHTA, however, was successful in its claim that the almost 30-year old law does not give the Treasury authorization to legalize new games such as VLT’s, as well as a number of other requirements defined by the amendments of Act 10-1989. And that Instead, gaming machine activity is limited to betting outlets and casinos, which is actually contained in gaming legislation from 1933.

In was confirmed by Judge Maynard Salgado that the intention of Law 10 of 1989 was to be utilized for public raffles. In her summary, Judge Salgado said, “We must conclude that the contested regulations exceed the powers of the Secretary of Finance and contravene applicable laws,” according to G3 Newswire. The judge’s ruling coincides with public hearings for the new fiscal year’s budget, as well as the Treasury Departments efforts to raise income to help alleviate the Caribbean island’s more than US$2 billion deficit.

Local gaming operators strongly object to the VLT’s and argue that allowing them in Puerto Rico would devastate the casino economy and put 5,000 jobs at risk. The Treasury, however, estimates that legalizing VLT’s would add US$100 million annually to the government’s coffers.

Last month, the Department of Treasury announced that its plans to legalize as many as 100,000 video lottery terminals (VLTs) were being suspended until lawsuits pending from The Association Of Slot Machines Owners and The Puerto Rico Hotel And Tourism Association are resolved.