Regulated
Curaçao originally introduced its remote gambling law in 1993 in what is known as its National Ordinance on Offshore Games of Hazard (Landsverordening buitengaatse hazardspelen, P.B. 1993, no. 63) (NOOGH). The law was introduced with the intention to legalise the activities of the then existing operators in Curaçao offering remote gambling services internationally via phone.

In accordance with the law, the Governor of Curaçao is authorised to grant (remote gambling) licences for the exploitation of games of chance on the international market through service lines, which broadly interpreted includes any mean of communication, such as the Internet. Such licences to exploit games of chance, which includes to develop and own these games of chance, is only granted to those legal entities established in the Netherlands Antilles, which as of 2010 after abolishment of the Netherlands Antilles, is defined as in Curaçao established legal entities. The licence granted to such entity is not transferable.

Until 2019 the Minister of Justice was responsible, under mandate of the Governor of Curaçao, for the supervision of the licence holders of the remote gambling industry, which includes the introduction of regulations and enforcement thereof. In this period the licence holders (in practice being referred to as Master Licence Holders) started issuing sub-licences to operators under the mandate of the issuing Master Licence Holder. This practice was tolerated by the then Supervisory Authority and acknowledged by the Joint Court of Justice of Aruba, Curaçao, Sint Maarten and of Bonaire, Sint Eustatius and Saba in a 2020 judgement.

As of 2019 the Minister of Finance is responsible, under the mandate of the Governor of Curaçao, for the supervision of the Master Licence Holders. The Minister of Finance continued tolerating the sub-licensing regime, which is still in place today. In the same year the Curaçao Gaming Control Board (GCB) was appointed the AML/CFT supervisor for the remote gambling industry.

Post 2020 the GCB has been tasked with the licensing for and supervision of the remote gambling industry on behalf of the Minister of Finance. As per that same year the GCB commenced requesting reports from the Master Licence Holders on the sub-licensees, an increase in supervision.

The four Master Licence Holders in Curaçao which offer sub-licences are:

• Antillephone N.V. #8048/JAZ
• I.L. Curaçao Interactive Licensing N.V. #5536/JAZ
• Cyberluck Curaçao N.V. #1668/JAZ
• Gaming Services Provider N.V. #365/JAZ

These in turn have granted numerous sub-licences to B2C and B2B operator companies almost all of which based outside of Curaçao.

However, draft regulations were introduced for consultation in 2021 which will radically reform the licensing and compliance framework. Pressure from the Dutch government (who have provided financial support to help with Covid) have resulted in a new draft gambling legislation referred to as “Landsverordening op de  kansspelen” or “LOK” for short. On the 18^th December 2023 LOK in its latest form (factoring in advice given and amendments proposed by the Social and Economic Council in April 2023 – SER -advies.LV op de Kansspelen & RA -12-23 LV OntwerpLv op de Kansspelen) was presented to parliament for review (LV de Kansspelen) and simultaneously published along with an explanatory document.

In the interim and until LOK is voted through or further amended by the Curacao Parliament and subsequently implemented and made effective (could be late 2024) , operators (i.e. existing sub-licensees) may apply for their own direct licence under the existing NOOGH law. Even if operators do not apply for their own direct licence during this interim period, sub-licences are encouraged to register as such (no costs involved). As announced on 1^st September 2023 by the Minister of Finance the window for new standalone licence application will be available from the 15 November 2023, will application to be made via a dedicated portal.

The window for registration as an existing sub-licence and/or subsequent application for a direct licence was initially open until the 31/3/24, but has since been extended as shown below.

There seems to be no-grandfathering of existing sub-licensees (i.e. those who have not already applied for their own direct licence) to new LOK licence, once master licence under which it operates expires or LOK becomes effective whichever is earlier, a new licence will need to be in place. This could lead to a gap between the effective date of the LOK and grant of a licence under it during which time the operator would need to shut down.

The expiry dates for the Master Licences is set out here

Any direct licences granted will then be grandfathered to the new licence regime under LOK, holding provisional licence status until that LOK licence is in place.

Any sub-licensee who has not been registered on the portal by 31/3/24 will not be permitted to operate. It therefore seems that at least registration as a sub-licensee is a mandatory requirement. This is further set out and explained in a memorandum issues to existing NOOGH licence holders on 18 December.

This 31/3/24 application deadline  was   extended to 30 April 2024, due to issues with inadequate applications and difficulties experienced with the portal, please see.

The licensing portal that was closed for applications on 1 May 2024, was re-opened on 15 July 2024 with no definitive end date, please see.

Currently, the GCB is the gambling regulator as well as the supervisory authority for compliance with AML/CFT laws. Under the draft LOK, the GCB will continue these powers under a new name, namely the Curacao Gaming Authority (hereinafter “CGA”).

GCB published in May 2024 new regulations for Anti-Money Laundering and Combating the Financing of Terrorism and Proliferation of weapons of mass destruction (AML/CFT/CFP Regulations) for the online gaming sector of Curacao.

 The AML/CFT/CFP Regulations are aligned with the FATF Recommendations.

These regulations are effective as of May 20, 2024. However, a transitional period of three (3) months applies. This implies that all online gaming providers operating from Curcaao are required to fully comply with these regulations by September 1, 2024, at the latest. Non-compliance after this date may be sanctioned.

Market Size
Curaçao is an outward facing market, with operators benefiting from a Curaçao sub-licence to operate in many unregulated or underregulated “grey market” jurisdictions.

In 2021, Dutch investigative journalism platform Follow the Money stated that around 12,000 gambling sites were established in Curaçao and estimated that 40% of global unregulated gaming runs through the island. According to the Master Licence Holders this number is unrealistically high. From periodic reports provided to the GCB it can be deduced that there are currently more than 1,000 operators offering online gaming from Curacao on the international market.

Competitive Landscape
According to the Memorandum of Explanation (18 December 2023) accompanying the new draft LOK (Mvt.Lv. op de Kansspelen) there are about 1000 operators (sub-licensees).

The best known in terms of its size and Curaçao presence is Pinnacle.

Localisation
As it is outward facing there is no need for localisation.

Top Key Attractions and Challenges
Attractions

• Low-cost sub-licence with limited infrastructure and local company requirements
• Relatively fast set up as a sub-licensee covering all products, with the exception of lottery.
• Light touch regulatory and compliance regime
• Ability to target most unregulated jurisdictions (excluding Curaçao and those jurisdictions the Master Licence Holder impose on the sub-licensees, i.e., the Netherlands, France and USA)
• Low effective tax rate as long as turnover and turnover-generating expenses occur for the most part outside of Curaçao (territorial tax regime).
• Possibility of Crypto use under the new licence regime

Challenges

• Banks and payment processors are reluctant to service Curaçao sub-licensees – limited options
• Reputational issues for customers and suppliers
• Dutch government has a large influence and is determined to materially improve regulatory and compliance standards and introduce a more rigorous regime
• AML regime is due another review by the Caribbean Financial Action Task Force (CFATF) in the second half of 2024 which may result in tightening up of the compliance regime before then
• Impending new LOK increases uncertainty and will inevitably add to costs and compliance burden