Curacao to rein in online gambling after Netherlands withheld pandemic bailout


Curacao-licensed online casinos could soon find themselves on a much shorter leash after the Netherlands applied financial pressure on the local government.

Last week, the Dutch government announced that it had reached an agreement with its Curacao counterparts regarding “measures and structural reforms” intended to make the constituent country of the Kingdom of the Netherlands “financially, economically and administratively resilient.”

The Netherlands has been providing Curacao with “liquidity support” since April to mitigate the economic impact of the COVID-19 pandemic on the island nation, which is heavily dependent on tourism. But Curacao also has an online gambling licensing regime that irks the Dutch government due to operators targeting Dutch punters.

In July, the Netherlands declared that its pandemic bailout was “no longer without obligation,” and Curacao’s failure to agree to certain conditions meant the third tranche of the bailout cash was withheld. In October, Curacao agreed to “comply with all requests” made by the Netherlands, including those “aimed at strengthening the rule of law of Curacao.”

Among the requirements for “tackling financial and economic crime” is ensuring that Curacao enact “laws and regulations that provide for an independent regulator for online games of chance.” This plan, which has a deadline of March 1, 2021, is intended to end the current system in which a handful of ‘master licensees’ – largely local telecom operators – issue ‘sub-licenses’ to thousands of gambling sites, which then operate almost entirely without supervision.

Not any more. Curacao has agreed to ensure that its gambling licensees “act in accordance with the laws and regulations of the countries they target.” This plan to rein in online operators who target jurisdictions in which such activity is unwelcome must be established by September 1, 2021.

The Netherlands, which plans to launch a domestic online gambling market by September 2021, has been trying for years to convince Curacao to toughen oversight of its online gambling licensees, which are a fixture on blacklists of unauthorized gambling domains from Australia to Switzerland.

The third obligation is for Curacao to ensure that all gambling licensees pay their required taxes and fees. Curacao recently doubled its annual master license fees to ANG240k (US$134k) but sub-licensees currently contribute little or nothing to government coffers.

Curacao has suggested imposing a monthly fee of ANG7,500 ($4,200) on sub-licensees which, when combined with the higher master license fees and a 2% corporate profit tax, could raise ANG100m ($56m) per year through more rigorous collection, although the proof will be in the pudding.  

Dutch MP Ronald Van Raak, a prominent gambling critic, has previously claimed that unsupervised online gambling threatens Curacao’s “political stability.” In 2018, Curacao promised greater oversight of its gambling operators due to the Minister of Finance claiming that the actions of some licensees “seriously detracts” from Curacao’s “international image.” However, little tangible changes followed this public vow, apparently due to the government’s lack of financial incentives.