THE HAGUE - The facilitation and supervision of online gambling companies are the responsibility of the autonomous country of Curaçao, and Dutch Minister of Foreign Affairs, Wopke Hoekstra, eagerly seizes this as an opportunity to sidestep difficult questions from VVD members Kamminga and Brekelmans.
The reason for their questions was Ukraine's decision to place several Russian companies operating under a sublicense from the Curaçao government on the sanctions list. The minister does not shy away from the fact that there is no visibility (even within the Curaçao government) regarding the size and activities of the gambling sector but surprisingly remains optimistic that adequate supervision will be in place later this year:
Question 1
Have you taken note of the article "Zelensky wants action against Russian gambling companies in Curaçao"?
Answer
Yes.
Question 2
Were you aware that Ukraine has placed a number of gambling companies based in Curaçao on the sanctions list? If so, to what extent is this a topic of discussion between you and your Curaçao counterpart?
Answer
The Netherlands is bound by UN and EU sanctions. Ukraine adopts sanctions independently. Ukraine has not actively shared the sanctions targeting gambling companies with the Netherlands. The Netherlands has taken note of the published sanctions list by Ukraine. Sanctions adopted independently by third countries are generally not a topic of discussion between the Netherlands and Curaçao. However, following the above-mentioned article, there has been contact with Curaçao.
Question 3
What does the contact mentioned in the article by the Minister of Foreign Affairs with Ukraine and other international partners entail, and what is the Netherlands' position regarding the imposed sanctions on gambling companies based in Curaçao? Can further clarification be provided on who the other international partners are? If not, why not?
Answer
The Dutch government is constantly engaged in discussions with Ukraine and other like-minded countries (including EU member states, G7 members) regarding measures to exert maximum pressure on Russia. Specific to these measures, further contact takes place with Ukraine to establish the precise content and scope. There is also additional contact with the Curaçao authorities because, initially, it is the competent authorities there to further assess the current situation and consider any necessary steps.
Question 4
Can you indicate to what extent supervision takes place on gambling companies located in Curaçao through letterbox companies? What measures have been taken in recent years to improve supervision of gambling companies in Curaçao? What measures have you taken yourself, and what measures have been taken by the country of Curaçao?
Answer
Curaçao is an autonomous country within the Kingdom and has its own gambling legislation and regulations. The granting of licenses, supervision, and enforcement of all gambling offerings fall within the autonomy of the country of Curaçao. This also applies to supervision and enforcement in the trust sector in Curaçao. The Netherlands does not have a role in this, and therefore no measures have been taken by the Netherlands.
However, the reforms of the gambling sector are part of the jointly agreed country package for Curaçao. This includes measures H2 and H19. The implementation of these measures lies with Curaçao. Curaçao and the Netherlands, through the Temporary Working Organization (TWO), jointly monitor the progress of the reform measures. The Netherlands assesses compliance with the agreements in the Country Package and provides technical assistance in several areas.
The government of Curaçao is working under these measures on new gambling legislation, which includes putting an end to the master-sub-license system. The new law also provides for a new gambling regulator with more powers than the current one. It is intended that this regulator will also oversee the offshore gambling sector in the country.
Question 5
Do you have an idea of how many gambling companies have a Curaçao license? Can you indicate whether, in addition to the gambling companies mentioned by Follow the Money, there are other gambling companies based in Curaçao on Ukraine's sanctions list? If not, are you willing to assess this number?
Answer
There are five companies with a license from the Curaçao government (master licenses). The five master license holders have shared their license with many other companies (sub-license holders). The Curaçao government has limited insight into the number of sub-license holders and who these companies belong to. The names of the five master license holders themselves are not on Ukraine's sanctions list. In preparation for the implementation of the new National Ordinance on Gambling, Curaçao is taking steps to gain better insight into the providers of offshore gambling offered under Curaçao (sub)licenses. Under the new National Ordinance, all parties will require a license, providing a clearer picture.
Question 6
Do you have an idea of how many sub-licenses are issued by master license holders in Curaçao? How is supervision ensured, and how can this supervision be improved?
Answer
The current practice of the offshore gambling sector from Curaçao is characterized by a non-transparent system of master and sub-license holders. The government grants the master licenses, but not the sub-licenses. It is unclear how many licenses have been granted, who the license holders are, and in which countries these providers are active. A lack of supervision contributes to maintaining such a system.
Curaçao recognizes the undesirability of this situation and is therefore working, as part of the Curaçao Country Package, on the development of new gambling legislation, which includes the establishment of a new regulator, the Curaçao Gaming Authority (CGA), which will also oversee the offshore gambling sector. Under the new law, the master-sub-license system will come to an end, and all interested companies will be required to apply for a (new) license from the CGA, the successor to the Curaçao Gaming Control Board (CGCB). This way, the government of Curaçao will be able to better supervise and have insight into the license holders.
Question 7
Can you indicate the exact criteria for the sanctions imposed by Ukraine on companies that have acted "against the interests of Ukraine"? Is the Dutch government intending to take measures or impose sanctions on companies with Russian ties based in Curaçao, in line with Ukraine's call for European countries to also take measures? If so, what do these measures consist of?
Answer
Ukraine imposes sanctions independently. As indicated in the answer to question 3, further contact is being made with Ukraine to determine the precise content and scope of the measures. Furthermore, Curaçao is conducting further research on the mentioned companies. If this does not lead to appropriate follow-up steps, other instruments, such as exploring EU sanctions, may be considered.
Question 8
Spanish authorities have imposed fines totaling 87 million euros on gambling companies based in Curaçao over the past two years for non-compliance with regulations. How is the implementation of an independent regulator for online gambling in Curaçao progressing? Can you provide an overview of the contacts that the Netherlands and Curaçao have had on this matter, and what is Curaçao's current position regarding the establishment of an independent regulator?
Answer
Curaçao facilitates an offshore gambling sector, which means that providers with a Curaçao license are allowed to offer online gambling worldwide, except in Curaçao itself. However, some providers from Curaçao also target jurisdictions that require a license, such as the Netherlands and Spain. When a provider from Curaçao offers services without a local license in a jurisdiction with a licensing requirement, that offering is illegal there. Licensed jurisdictions, such as the Netherlands and Spain, oversee and enforce illegal offerings in their countries based on their own legislation and can impose fines, for example.
As mentioned in the answer to question 6, supervision of the offshore gambling sector in Curaçao is currently inadequate with the current regulator. As part of the reforms in the Curaçao Country Package, Curaçao is working on a new National Ordinance on Gambling. This new ordinance will also provide for an independent regulator for the gambling sector, the Curaçao Gaming Authority.
The Netherlands and Curaçao regularly have contact regarding the reform of the gambling sector, as agreed in the country package. The aim is to implement these reforms by the end of 2023. The progress and results achieved in the reform of the land-based and online gambling sectors are reported in the Implementation Reports.
Question 9
Do you have an idea of how much tax gambling companies based in Curaçao contribute to Curaçao, and whether there are arrangements in place that result in less tax being paid than should be? If not, are you willing to investigate this or encourage Curaçao to conduct such research? Additionally, do you see opportunities to ensure that the profits made by gambling companies in Curaçao benefit Curaçao more?
Answer
Due to the autonomy of Curaçao within the Kingdom, the Netherlands does not have its own insight and cannot or will not conduct research on tax contributions in the country. The choice of a tax system and the desired tax revenues are up to Curaçao. However, it is generally known that many gambling companies make use of the territorial tax system, which results in a low effective tax burden. One of the objectives in the Country Package for the reform of the gambling sector is to increase government revenue, including through license fees.
Question 10
Are you willing to urge your Curaçao counterpart to examine trust offices in Curaçao and their relationship with gambling companies on Ukraine's sanctions list?
Answer
The Minister of Finance of Curaçao has sent a letter to the State Secretary of the Interior and Kingdom Relations in response to these parliamentary questions. This letter indicates that the minister has contacted the Central Bank of Curaçao and Sint Maarten and requested further investigation into the relationship between gambling companies and the companies mentioned on the Ukrainian sanctions list.
Question 11
Are you willing to prioritize the supervision of the Curaçao gambling sector in the next Judicial Four-Party Consultation (JVO) and inform the Parliament about its outcomes?
Answer
The supervision of the Curaçao gambling sector is an autonomous matter for Curaçao. The JVO focuses on joint law enforcement efforts within the Kingdom, so it would not be appropriate to prioritize it in the JVO. The reform of the gambling sector is part of the Curaçao Country Package. Curaçao and the Netherlands, through the Technical Working Organization (TWO), jointly monitor the progress of the reform measures. The Parliament is informed about the progress through the quarterly Implementation Reports. Please refer to the answer to question 4 as well.
