Curacao’s new gambling legislation will align with counterpart licenses in EU jurisdictions, thereby strengthening the global recognition of Curacao’s jurisdiction.
What changes should we expect from the regulator?
For several years, the government of Curacao has made changes to the licensing regime in Curacao a priority. The current regime, which allows new operators to apply for sub-licenses from any of the four main license holders, is soon to be replaced by a central government-controlled authority; Curacao Gaming Authority (CGA). The CGA will not only have licensing authorizations, but will also take on an oversight role within the sector and be given appropriate enforcement powers. Currently, the CGA already exercises this role for gambling in Curacao.
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Scope of the New Licensing Regime
At this time, any operator interested in obtaining a sub-license in Curacao must apply to one of the master license holders. With the new legislation coming into force, gambling operators will apply for a license directly from the CGA. The purpose of this new legislation is primarily to strengthen the Curacao license by imposing higher barriers to entry for operators, aligning the Curacao license with counterpart licenses in EU jurisdictions. Second, it is important to centralize the process from the Curacao government, so that the CGA can supervise licensed operators and more effectively address important illegal gambling and anti-money laundering (AML) concerns. Thirdly, by establishing additional conditions for operators, the new legislation will offer better protection to gambling participants. The result of this effort should, in the long term, lead to further recognition and evaluation of the Curacao license by other jurisdictions.
What determined the introduction of this legislation?
The new legislation is due to several factors. First, to strengthen the international recognition of the Curacao jurisdiction as a reputable and supervised one in the iGaming sector. Second, the new legislation is extremely beneficial from an economic point of view for the country, as license fees are now paid to master license holders, and the centralization of control by the government will create new revenue for Curacao.
A third factor that played a role, albeit indirectly, is the COVID-19 pandemic. Throughout the pandemic, tourism in Curacao declined drastically, which led to requesting and obtaining financial assistance from the Netherlands. Instead, the Dutch government asked the government of Curacao to revise its online gambling laws to be closer to those of other supervised and regulated regimes.
What does this mean for license holders in Curacao?
As each master license holder has different license terms, the new gaming license will ensure a more level playing field for all. The CGA may attach conditions, regulations and restrictions to a gaming license where they can reasonably contribute to the provision of safe, responsible, transparent and reliable gambling. These may be at operator level, such as prior approval of changes in legal structure or ownership, but may also refer to player protection measures. Examples are the maximum size of the bet per person, as well as the way of advertising. In addition, it provides the participants of these games of chance with a better framework in terms of filing and dealing with complaints.
There will also be additional checks on operators emphasizing responsible gaming and anti-money laundering measures. Technical compliance will also be an important element when it comes to the new measures.
Regarding the existence of a headquarters in Curacao, discussions are ongoing. It is not yet clear whether this refers to the existence of at least 3 “key position” employees, who will need to be hired locally, or whether this will be implemented more gradually.
Current sublicensing operators will be given a specific deadline to submit their license conversion application and adapt their operations to the new regulations. During that period, before the new license is granted, the new legislation will not immediately apply to operators with an existing license if they registered with the CGA before the new legislation came into force. The new license will be valid for a maximum period of five years, after which it will have to be renewed.
Notwithstanding the above, software providers in this sector may also request a license, as is already best practice with master license holders. Of course, some of the conditions and measures in the new legislation will not apply to these software providers.
Of course, annual license fees will likely increase slightly, but will remain competitive compared to costs in other jurisdictions. The fee will consist of a regulatory fee and a gaming contribution fee, with the regulatory fee varying depending on the number of domains, among other things. Fees are not yet confirmed and are still under review. The final figures will be communicated once the law enters into force.
There will be operators who will not be willing to adhere to these new regulations, but on the other hand, licensed operators in Curaçao will decide to stay and make the necessary investments.
Operators who remain will have the most to gain as they will benefit from a highly reputable license and access to a wider range of online payment methods and third party service providers.
Szilaghi Consulting offers consulting services and complete package solutions for the purchase of the gambling license, which include:
- Jurisdiction of gambling and business consulting
- Incorporating the corporate structure of the gambling business
- Opening bank accounts
- Application for a gambling license
How about CRYPTO gambling?
Curacao’s new igaming legislation, as currently presented, does not include any mention of crypto gambling; and the Minister of Finance, Javier Fransisco Antonio Silvania confirmed that: “offering these services will not be possible with a Curaçao license for the time being”.
Target market for licensed operators in Curacao
We do not believe that changes will be made from this perspective and no new rules will be imposed on operators regarding the targeting of certain markets. However, the operator will have the responsibility to make informed decisions, similar to other EU dot.com licensing jurisdictions. Currently, no countries that are part of the Kingdom of the Netherlands can be targeted and gambling cannot be offered to their residents. Therefore, the Curaçao license can be considered an exit license. In addition, operators may choose to take additional measures to restrict certain target markets.
Implementation of AML/CFT checks
In addition to the new gambling legislation, the government of Curacao is also preparing a new legislation regarding AML conditions that will be adapted in accordance with the new gambling legislation. This is to ensure that operators will align their requirements and processes regarding the identification and verification of players at registration. New deposit thresholds upon triggering KYC verification are expected to be incorporated, which will be in line with other countries’ regulations in this area. This will also include reporting requirements and player protection obligations.
The new legislation will not be a stand-alone piece of legislation. In order to successfully implement the measures, other legislation will need to be amended, such as the CSB legislation, but perhaps also the legislation on work permits for foreigners. In addition, the CGA will need to develop and implement further guidance on the various measures in the new legislation to provide guidance to the sector in this regard. During the information sessions with the sector, it was mentioned that certain elements will be important for the operators, such as an operational manual, containing information such as a description of all the games offered on the operator’s URLs.
When will the new legislation be applied?
There is still no exact date of application of the new legislation. In the latest news on sources, the launch date is around March 2023. However, Minister Silvania announced that there may be delays due to “several factors over which we [the government of Curacao] have no influence”. At this time, the final draft law has not yet been published, but it is said that it is already being developed for online gambling, and various stakeholders, including corporate service providers in the sector, have been asked to provide their comments , thoughts and contributions, on the project. These comments have now been collated and are being reviewed as part of the legislative process.
The Gaming Industry Future
Curacao’s gambling industry stakeholders are eagerly awaiting the implementation of the new licensing regime. While the full details are not yet known, will not only protect players, but will also establish Curacao as a gaming jurisdiction with a strong backbone for the future.
How can Szilaghi Consulting help you start your online gambling business?
Choosing a gambling licensing jurisdiction is quite difficult, to begin with. Given the sheer number of factors that need to be considered by gambling operators, the choice can be overwhelming.
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Our experience in obtaining online and offline gambling licenses differentiates us from the competition. We cover all your needs, from the incorporation of the gambling company, the creation of fiscal and compliance structures, to obtaining the gambling license.
We invite you to schedule a consultation with us. We like to communicate with our customers, troubleshoot their problems, and offer solutions. We invite you to contact us today to discuss this with one of our agents. Let us help you take your business to the next level.