Curaçao is gearing up to introduce sweeping reforms in its online gambling industry to tighten up many of the relaxed rules that have governed its licensing protocols for a while. Let’s dive deeper into what the regulatory changes will bring.
The Curaçao model for gaming regulation has been known around the world to be quite easygoing. By that, we mean that it has so far had a reputation of being a system that allows for relatively fast acquisition of licenses, low fee structure, minimal oversight, and generally limited requirements. That is, however, about to change with the Dutch Caribbean island set to welcome a series of iGaming reforms.
Back in 2020, the Dutch Caribbean government introduced a slew of sweeping measures to the island country. And since gambling is one of the major economic activities of the territory, it came as no surprise to anyone that the changes touched on this pertinent activity. Now, three years after the innovative legislation was passed, Finance Minister Javier Silvania announced that the new measures would be effective starting September 1st this year.
After a three-year wait, online gaming operators licensed by the Island country will finally be subject to newly implemented regulations. The Honorable Minister, who was delivering a keynote address at SiGMA, has directed the Gaming Control Board (GCB) to begin enforcing and upholding the new set of regulations. Here is a closer look at what to expect after the new directives are executed from September 1st.
Breaking Down the New iGaming Reforms
With the upcoming establishment of a fresh set of regulations, the entire iGaming landscape for Curaçao is poised for a significant shift. Some of the crucial elements of the modernized legislation include:
There have been extensive discussions worldwide about the general standing of crypto when it comes to iGaming. Some countries have banned it, and consequently, it cannot be used in gaming in those countries, while in some, crypto is widely used for online gambling. When it comes to Curaçao, crypto is not yet regulated. As such, it is technically legal to use it as it isn’t prohibited. The new law, however, seeks to introduce some sort of order on this topic. As such, crypto exchanges will be allowed until the island country’s expected regulation on crypto comes into effect.
The applicable taxes discussed under the new regulations include the following:
➔ Sales Tax: There’s an ongoing debate about the applicability of sales tax to B2B activities between companies in Curaçao that are involved in the online gaming sector. To put the debate to rest, under the new regulation, the government is actively working on exempting sales tax, particularly for B2B activities.
➔ Investment Tax Incentive Regime: This is guaranteed to benefit companies interested in setting up a physical presence in Curaçao. Under this tax, the companies may get an exemption on most of their tax obligations for their first 10 years of operation in the country. The measure is set to be extended to the online gambling sector in Curaçao, provided the foreign investors meet a specific set of requirements. Some of the said requirements include availing a minimum investment of $3 million and the provision of permanent and full-time employment to at least ten local employees.
➔ Expatriate Regime: To attract highly qualified personnel, the expatriate regime allows for favorable wage tax treatment when applying at the local tax authorities.
Until now, there’s no final word on the new license fees that will be enforced in the iGaming sector. However, there’s intent for the government to set competitive yet affordable licensing fees for the various stakeholders in the iGaming market (operators and suppliers). The stakeholders who can fully meet the licensing fee terms will qualify for fee reductions or even occasional exemptions.
The new regulation aptly stipulates that iGaming licenses will only be granted to businesses legally and effectively established in Curaçao. Within five years of the law coming into effect, these entities are required to have a physical presence in Curaçao. The law also specifies that at least three key persons must be appointed permanently. Initially, when the law comes into effect, at least one key person must fulfill all the requirements mentioned earlier. The key persons referred to here include directors, managers, and compliance officers. The regulation has, however, left room for startups to apply for exemptions to this specific rule.
The government recognized the challenges met by Curaçao-licensed entities in meeting their legal costs. As such, under the new reforms, the government is working towards establishing a local financial institution that will facilitate local transactions without involving regular local banks. Initially, these costs will include the gaming authority, tax authority, local individuals, and local employment.
While the government anticipates that the string of changes will benefit the overall Curaçao gaming landscape, it also recognizes the need for a grace period. As such, an 18-month transitionary period will come into effect from September 1st to give businesses enough time to comply with the new regulations.
An online portal will be established for all the iGaming operators and suppliers seeking licenses. Curaçao’s gaming regulatory body will then be mandated to decide within three months of receiving a compliance license application whether to approve or deny the application. The ombudsman will then be required to communicate the same to the applicant within two weeks.
During the application process, Curaçao’s gaming watchdog will also decide whether to grant a standard or provisional license. A standard license shall be valid for five years and will indicate all the requirements that have been met. On the other hand, a provisional license will be granted for an interim period of six months, and there is a possibility that it may be extended for another six months. The temporary permits are issued when the parties involved have not yet met the complete selection of requirements, but these requirements are deemed minute or easily achievable.
Other Noteworthy Mentions of the New Regulation
The new regulations will also enact a National Decree for Online Gaming in Curaçao. This will be an addition to the already existing National Ordinance on games of chance, which establishes the basic rules for all types of gaming offerings. The National Decree for Online Gaming will establish the regulatory framework upon which online gaming will be built. Some of the fundamental elements of this framework include operating requirements, licensing conditions, reporting obligations, and associated fees.
The regulator will also have the power to introduce new policies it feels will be helpful to the overall online gaming landscape. These policies may touch on pertinent issues in the gambling landscape, like technical compliance, money laundering, and responsible gambling, just to mention a few.
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