Curaçao is set to drastically reform its entire online gambling regime, setting up a new licensing body – with higher barriers to entry and the ability to cooperate with other regulators to tackle illegal gambling – to replace master licences.
The island’s licensing regime was notable for its extremely liberal system and low barriers to entry with little scrutiny for operators, but the government intends to change this.
Currently, only four businesses are licensed by the government. Each of these then offer out their own licences on their own terms, meaning that private entities rather than the government wielded most practical control of licensing.
This will be drastically changed under a new bill that has been approved by the Curaçao Council of Ministers, part of an overhaul of gambling regulation on the island.
A new system will be set up, with licences for both B2C operators and B2B suppliers issued by the Curaçao Gaming Authority (CGA), an independent body set up by the government.
Licences will come with fees, as the government attempts to increase its direct revenue from the gambling sector.
Mario Galea, the former Malta Gaming Authority chief executive who worked as a consultant on the process, said that B2C operators will be expected to pay a licence application fee of around €4,000, followed by a licence fee of around €12,000 per year and a €250 regulatory fee per month per URL.
In the short term, all existing sub-licensees will be “grandfathered” into the new system, with an opportunity to convert their sub-licence into a transitional licence that will last for 12 months. The government has already begun to register all existing sub-licensees, with only those who have registered eligible for conversion to a transitional licence.
The new licence will carry with it additional controls. As well as enhanced money laundering measures, licensees will also be required to have at least three employees hired in “key positions” working on the island.
Gibraltar, another popular point of supply for international operators, itself introduced a new Gambling Act this year focused on ensuring a stronger local presence for licensees, though it included less specifics of what a local presence would entail.
Finance Minister Javier Silvania told iGB that – after the transition period – some operators may be forced to exit, but that he has “no issue” with that.
In addition, Galea told iGB that the existence of a true licensing authority – with power to revoke licences if necessary – would mean much greater ability to enforce existing laws.
Besides having power over licensing and enforcement, the CGA may also enter into cooperation agreements with other regulators. These agreements often exist in Europe as an attempt to prevent operators targeting one jurisdiction from another, and Galea noted that they may eventually be used to take action against those that do business in certain locally regulated markets.
There will, however, be no specific rules that would directly limit operators’ ability to target specific markets, with Galea pointing out that final responsibility for that decision would ultimately rest with the operator.
However, he also said that Europe – where crackdowns on offshore operators have been strongest – was not currently the main market for most Curaçao-based licensees, and that the island was more of a gateway to the rest of the world, and Latin America in particular.
The new system came about due to a combination of influence from the Dutch government – as Curaçao is a constituent country of the Kingdom of the Netherlands – and work from the Curaçao government, which put a focus on changing the gambling regime upon the formation of Gilmar Pisas’ second government last year.
“I made up the team that drafted the bill, but Dutch civil servants have been reading along and providing advice,” Silvania said. “This is the added value of being part of the Kingdom of the Netherlands; it has more capacity and more expertise.”
In particular, the Dutch government had said it was concerned about Curaçao-based operators targeting regulated markets, including its own shores. Following media reports about the Curaçao sector in 2021, Sander Dekker, the Netherlands’ Minister for Legal Protection at the time, promised to parliament that there would be changes to how business was done in Curaçao.
Having been approved by the government, the bill will next go to a consultation stage before heading to the legislature.
“The Council of Ministers has now approved the bill which will be put before the advisory bodies, who can make adjustments, then put before Parliament and hopefully approved by the end of the year,” Silvania said.
Galea said that major changes to the bill at this point, though, will be “highly unlikely”.