Despite being a prominent hub for the industry in Latin America, Costa Rica lacks regulations and licensing for online gambling operators. Surprisingly, there are methods to establish a completely legal online gambling company in the country.
Intrigued to learn how? Continue reading for more details.
General Information about Costa Rica
Costa Rica is a country located in Central America known for its stunning natural landscapes, vibrant culture, and relatively stable economy. Here are some key points about Costa Rica’s economy:
- GDP and Economic Growth: Costa Rica has experienced consistent economic growth over the years. In 2020, the country’s Gross Domestic Product (GDP) was approximately $61 billion, making it one of the largest economies in Central America.
- Services Sector Dominance: The services sector is the backbone of Costa Rica’s economy, contributing significantly to its GDP. Key areas within the services sector include tourism, financial services, telecommunications, and business process outsourcing (BPO). Tourism, in particular, is a major industry, attracting millions of visitors each year to explore the country’s natural beauty.
- High-Tech and Innovation: Costa Rica has also emerged as a hub for high-tech industries and innovation. It has attracted numerous multinational companies in sectors such as software development, medical devices, and electronics manufacturing. The country has a well-educated workforce and invests in education and technology infrastructure to support these industries.
- Agriculture and Export: Agriculture plays a significant role in Costa Rica’s economy, although its relative contribution to GDP has declined in recent years. Key agricultural exports include bananas, coffee, pineapples, melons, and ornamental plants. The country has also been successful in promoting sustainable farming practices and organic agriculture.
- Political Stability and Investment Climate: Costa Rica is known for its long-standing political stability, which has created a favorable environment for foreign investment. The government has implemented measures to attract foreign businesses and offers incentives for investment in priority sectors. It has also established free trade agreements with several countries, enhancing its competitiveness in international markets.
- Income Inequality: Despite its economic growth, Costa Rica faces challenges related to income inequality. The gap between the wealthy and the poor remains significant, and poverty rates have been relatively high in certain regions.
- Sustainable Development: Costa Rica has made significant strides in environmental sustainability. It is known for its commitment to conservation, with a significant portion of its land designated as protected areas. The country has also set ambitious goals to become carbon-neutral by 2050.
Overall, Costa Rica’s economy has shown resilience and diversity, with a focus on services, high-tech industries, and sustainable development. The government continues to work towards addressing social and economic challenges while promoting investment and innovation.
Exploring Costa Rica as a Gambling Jurisdiction
When it comes to gambling, Costa Rica presents an unusual jurisdiction. The 1922 Gambling Law officially prohibited all games of chance, yet subsequent regulations and government interpretations created a pathway for a legalized sector. Presently, land-based casinos can operate within hotels, providing slot machines, table games, and card games, while betting falls under a state monopoly.
However, the situation differs for online gambling. According to the current understanding of the law, online gambling is considered to occur where the transactions between players and operators are processed, rather than where the operator is located. This implies that while obtaining a gambling license is not possible, the government tolerates the presence of online gambling businesses operating from within the country, if their transactions are not facilitated by local banks and their services are not targeted at Costa Rican residents.
The Unique Case of Costa Rica’s Non-Traditional Gambling License
Since there is no provision for an online gambling license, Costa Rican operators primarily need to register a company to offer online entertainment services. The registration process involves engaging with the Costa Rican Ministry of Commerce, Industry, and Economy, and it necessitates the establishment of a physical presence.
To complete the company registration, operators must provide several essential documents, including:
- Certification of the legal capacities and corporate identification of the company
- Identification documents of natural applicants, along with certification of authorized residence from the Immigration Department for foreign applicants
- Proof of right to use the premises, such as an office space rental contract.
- Certification demonstrating the fulfillment of previous tax obligations.
Advantages of Running an Online Gambling Website from Costa Rica
One of the significant benefits of operating an iGaming business in Costa Rica is the absence of taxes on internet gambling revenues. Additionally, since the country lacks a regulatory framework and supervisory authority, operators are not bound by the marketing and responsible gambling restrictions that exist in many other jurisdictions. However, it is crucial to highlight that anti-money laundering regulations are still enforced.
Drawbacks of Running an Online Gambling Website from Costa Rica
However, as the saying goes, not everything that shines is gold. Operating from Costa Rica presents certain limitations that can potentially cripple an online gambling operator.
First and foremost, the absence of a proper gambling license makes it extremely challenging to secure transaction services from reputable international networks and service providers. While the increasing use of cryptocurrencies may alleviate this issue to some extent, most players still rely on fiat currencies and traditional payment methods, surpassing the number of tech-savvy crypto users. As deposits are crucial for the functioning of an online casino, operators must establish a viable structure to facilitate transactions with players; otherwise, their venture may come to a halt before it even begins.
Another drawback is the same lack of regulations that we previously listed as a benefit. While it allows for more flexible operations with a reduced emphasis on compliance, from the customer’s perspective, this translates to less protection and, consequently, diminished trustworthiness. Given the choice, players generally prefer to invest their money in an online casino that is held accountable by a stringent licensing authority.
Unfortunately, over the years, the reputation of Costa Rican online casinos has gradually deteriorated due to the irresponsible behavior of operators solely interested in quick financial gains rather than establishing themselves as trustworthy iGaming platforms.
How can Szilaghi Consulting help you get your Costa Rica online gambling business?
Szilaghi Consulting can provide valuable assistance for those looking to start an online casino or sportsbook. Establishing and running such an enterprise can be challenging, and without expert guidance, operators may struggle to succeed. Our jurisdictional advisory services are designed to help operators choose the most suitable market and business structure for their needs and navigate the process of acquiring a license.
Szilaghi Consulting has been providing services to the online and offline gambling industry for over 19 years. We have helped our clients to make the right choices, realize their visions, overcome obstacles, and, above all, to succeed. We offer transparency and efficiency and we commit to always act only in your interest.
Our experience in obtaining online and offline gambling licenses differentiates us from the competition. Szilaghi Consulting can assist, from incorporating the company, creating fiscal and compliance structures, to obtaining the gambling license.
Our consultants 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.