Conditions put on pandemic relief
Cura?ao, long a haven for online gambling companies that prefer to avoid the gaze of industry watchdogs, may finally implement a proper regulatory system. Part of the Dutch Caribbean, the island nation has received financial support from the Netherlands to help get it through the COVID-19 pandemic. But now that support is coming with conditions, namely that Cura?ao must get its online gambling licensing regime under control.
become more “financially, economically and administratively resilient”
The first two rounds of funding, called Landspakket or “Country Package,” had no strings attached. With the third round, discussed this summer, things changed. The Netherlands told Cura?ao that it needed to make structural reforms to become more “financially, economically and administratively resilient” lest it not receive the third tranche of relief funds.
In October, Cura?ao agreed to implement measures to crack down on financial crimes, including passing laws to authorize an independent regulator for its online gaming industry. Everything must be in place by March 1, 2021.
Need to control licensees
Cura?ao technically has an online gambling licensing structure, but there is little to no actual enforcement of any rules. There are five companies, all telecommunications firms, that are called “master licensees.” They often try to make themselves looks like official regulators, but they still just licensees.
sites licensed in Cura?ao are often among the worst actors in the industry
These master licensees, in turn, hand out “sub-licenses” to essentially anyone and everyone who wants one. The sub-licensees, of which there are thousands, operate with virtually no oversight. With some exceptions, sites licensed in Cura?ao are often among the worst actors in the industry.
The third wave of relief from the Netherlands is contingent on Cura?ao putting an independent regulator in place to rein in the licensees and ensure everyone plays by established rules. The regulator will have until September 2021 to enforce regulations, though with so many current sub-licensees just using Cura?ao as a rubber stamp for their flimsy licenses, it is expected to be a daunting task.
Licensees must follow regulations
One rule that the new regulator will need to enforce is to make sure licensees abide by the laws of the jurisdictions in which they operate. Right now, most licensees don’t care – if a country does not permit operators not licensed within its borders from operating there, Cura?ao licensees still accept customers from that country.
The other major enforcement issue for the independent regulator is the collection of gaming taxes, corporate taxes, and licensing fees. The master licensees pay ANG240,000 ($133,770) per year for their licenses, but the sub-licensees pay their fees to their master licensees. On top of that, many sub-licensees operate out of other countries and thus don’t pay taxes in Cura?ao. The government is cut out of the loop for most income it should be generating.
Cura?ao wants to charge ANG7,500 ($4,180) for a sub-license and a 2% tax on corporate profits. It is estimated that if the independent regulator is effective in its efforts, ANG100m ($55.7m) could be injected into the federal government’s coffers each year.