The situation with COVID-19 forced Curaçao to seek financial help from the Netherlands. Under the financial bailout deal, the island country promised to overhaul the online gambling sector and impose stricter licensing rules.
The deal comes as no surprise, given how the Netherlands is on its own mission to regulate the online gambling industry by the end of 2021.
Let’s delve deeper into the proposed changes led by the establishment of a new regulatory body and their impact on the gambling landscape that has been a significant source of income for Curaçao.
New Gambling Regulator On the Way
The first step that the Government of Curaçao will need to take to meet the requirements imposed by the Netherlands and its Country Package (Landspakket) is to establish a new independent regulator by March 2021.
That regulatory body will be tasked with issuing new gambling licenses and ensuring that the already licensed operators comply with the new rules. The most significant change in the rules is seen in the future prohibition of targeting customers from territories that haven’t ratified the gambling jurisdiction of Curaçao.
This means that the operators will be forced to restrict their services to 160,000 inhabitants of the island and a few countries that acknowledge the Curaçao license. It seems that the Netherlands has long been irked by these casinos and sportsbooks targeting and accepting Dutch players, and this is one way to put a stop to it.
According to the previous rules, the holders of the main licenses could sub-license other providers. This allowed the main license holders to keep the fees sub licensees pay for themselves instead of directing the money to the state budget.
However, the new regulations will revoke such a prerogative and establish a single gambling regulator in charge of further licensing and sanctioning the operators.
Overview of New Rules
Apart from the establishment of a unified gambling regulator, there are several other expected changes. One such change is expected to hit the corporate profit tax rate. The current rate is 2%, so this rate is expected to rise.
Also, the annual master license fee, which was about $134,000, will probably increase by another $4,000 per month.
The restructuring of tax policy is crucial for the deal to come through. Under the current laws, the operators that generate income in other jurisdictions are not required to pay any additional taxes.
Finally, as we have briefly mentioned earlier, the licensed operators will only be able to offer services to the residents of Curaçao and countries that recognise its license as valid.
How Will These Rules Impact the Future of Gambling In Curaçao
It is safe to say that the ramifications of the new gambling rules and laws for the future of the industry in Curaçao will be tremendous. The market will shrink considerably due to the ban on accepting players from jurisdictions outside of Curaçao and a few other countries. Also, the increase in fees and taxes will deter the operators from seeking a Curaçao license.
It remains to be seen if the government of Curaçao will get other countries to accept the Curaçao license and allow its operators to offer their services to their local players. If not, the online gambling market in this Caribbean island country will be doomed to perish in the upcoming years.