Panama Moves to Criminalize Illegal Lottery Sales Under Penal Code Reform

Panama’s National Charity Lottery has submitted two draft bills aimed at making illegal lottery sales, overpricing and forced bundled sales criminal offences, as authorities seek stronger tools against a clandestine market estimated to cost the state up to US$300 million a year.

Panama is preparing a significant overhaul of its lottery regulations, with the National Charity Lottery (LNB) submitting two draft bills to the Ministry of Economy and Finance that would bring major illegal lottery practices under the country’s Penal Code.

The proposals seek criminal penalties for the unauthorized sale of lottery products, direct overpricing and the practice known locally as “casado” or “one two”, in which customers are required to buy additional tickets, informal raffles or less desirable numbers in order to obtain the number they want. Such violations are currently handled mainly through administrative sanctions, including fines and temporary suspension of authorized sellers.

The LNB estimates that informal and illegal lottery activity costs Panama’s Treasury between US$200 million and US$300 million annually. The impact is also visible in official ticket sales: between 37% and 40% of tickets issued by the LNB are reportedly returned unsold, creating additional operational and logistical costs.

Despite the pressure from the illegal market, the LNB continues to contribute more than US$108 million per year to the state and social assistance programmes. Lottery officials believe those contributions could increase substantially if clandestine sales were reduced.

The reform package also proposes replacing rules dating back to 1969 and 1970, which the current administration considers outdated for today’s market. The objective is to modernise both the institution itself and the legal tools available to authorities when pursuing illegal operators and abusive sales practices.

The proposals must first undergo technical review by the Ministry of Economy and Finance and then be considered by the Cabinet Council before potentially reaching the National Assembly. If approved, the reform would mark a shift from predominantly administrative enforcement toward criminal prosecution of some of Panama’s most persistent illegal lottery practices