WILLEMSTAD - The online gaming industry is one of the fastest-growing sectors globally, and Curaçao has established itself as a key player in this space. However, despite its prominence, much about the sector remains unknown to the public, particularly in relation to Curaçao’s own involvement. According to economist Roland O.B. van den Bergh, founder and former chairman of the Association of Dutch Caribbean Economists (Economenclub), the island’s online gaming sector holds massive potential. But, to fully realize this economic opportunity, several critical steps must be taken, and significant challenges must be addressed.
Curaçao’s Role in Online Gaming
Curaçao is home to an estimated 1,000 online gaming providers, operating under sub-licenses issued by the island’s regulatory framework. These companies are involved in a wide range of activities, including sports betting, poker, and online casino games. The scale of this operation is staggering: estimates suggest that between 1,100 and 1,400 billion USD flows through Curaçao-based gaming companies annually, resulting in gross revenues of about $75 to $100 billion. The sector is projected to grow at a rate of 9.8% to 12.5% per year until 2030, making it one of the most lucrative industries Curaçao is involved in.
However, despite these impressive figures, Curaçao sees only minimal economic benefits from this booming sector. Comparatively, Malta—a rival in the online gaming industry—generates 9.6% of its gross domestic product (GDP) from the gaming industry. Malta has managed this by offering a comprehensive range of services to internet gaming companies, including marketing, hosting, program development, and financial services. In contrast, the majority of Curaçao's gaming sector benefits are limited to a small number of trust offices, with minimal trickle-down to the broader economy.
The National Ordinance on Games of Chance (LoK): A Step Toward Change
Curaçao’s government has recognized the need for reform and is moving forward with the National Ordinance on Games of Chance (LoK). The LoK aims to address the oversight deficiencies and modernize the regulatory framework governing the gaming industry. One of the key components of this ordinance is the introduction of the independent Curaçao Gaming Authority (CGA), which will take over the responsibilities currently held by the Gaming Control Board.
Under the LoK, significant changes are expected. Gaming companies with a Curaçao license will be required to pay an annual fee of NAf. 100,000. Half of this amount will be allocated to the Curaçao government, while the other half will support the CGA. Additionally, the new legislation will update outdated laws, some of which, like the lottery law, date back to 1908. By consolidating all forms of gambling—including lotteries, number offices, and local casinos—under one law, Curaçao hopes to create a more coherent and modern regulatory environment.
The reform also targets the main license holders, whose licenses will be revoked. All sub-license holders will need to apply directly to the new Authority to continue offering gambling services through Curaçao. To date, 700 applications have already been submitted in anticipation of these regulatory changes. Tighter oversight and the requirement for a local presence on the island ("substance") will further ensure that companies meet compliance standards and contribute more to the local economy.
Oversight and Compliance: A Complex Challenge
While the LoK introduces promising changes, the road ahead is not without challenges. One of the most significant hurdles is enhancing financial transparency, particularly in areas related to anti-money laundering and combating the financing of terrorism (AML/CFT). This issue has already drawn attention, as correspondent banks in the United States—responsible for facilitating local banks' transactions in U.S. dollars—have prohibited financial services to companies in the gaming sector due to concerns over money laundering. Without addressing this issue, Curaçao risks being cut off from crucial international banking networks.
In addition to financial transparency, the new oversight framework must address cybersecurity and the protection of personal data. As the online gaming sector grows, ensuring the safety of sensitive player information becomes increasingly critical. Furthermore, regulatory oversight must ensure that vulnerable groups, such as minors, gambling addicts, and individuals in debt, are protected. The gaming industry is also likely to face closer scrutiny when it comes to resolving legal disputes between players and companies, an area where an independent commission will play a key role.
Economic Potential and Future Growth
Despite these challenges, the economic potential for Curaçao in the gaming sector remains substantial. The government estimates that, within a few years, the industry could generate an annual revenue of NAf. 70 million for both the government and the CGA. Achieving this goal will require not only stringent oversight but also the development of a respected and professional regulatory authority that can ensure compliance and safeguard Curaçao’s international reputation.
However, building a sustainable gaming industry in Curaçao will require more than just regulations. One of the biggest hurdles is ensuring that the local economy benefits from the presence of gaming companies. Currently, over 90% of the costs associated with operating a gaming license go abroad, with less than 10% remaining in the local economy. This percentage must increase if Curaçao is to reap more substantial economic benefits from the sector. However, this must be achieved without compromising the island’s international competitiveness as a gaming hub.
A key challenge in boosting local economic involvement is overcoming the "de-risking" practices employed by international correspondent banks, which limit local banks' ability to engage with the gaming industry. Nonetheless, there are opportunities for Curaçao to expand its role in areas such as hosting, marketing, customer service, and product development. By building these capabilities, the island can position itself as a more integral part of the global online gaming industry.
Conclusion
The online gaming sector offers Curaçao immense opportunities for growth and development. The introduction of the National Ordinance on Games of Chance (LoK) marks an important first step toward improving oversight, modernizing the legal framework, and increasing the local economic impact of the industry. However, significant challenges remain, particularly in the areas of financial transparency, regulatory compliance, and ensuring that the local economy benefits from the sector's growth.
With proper oversight, a strong regulatory framework, and a commitment to fostering local involvement, Curaçao has the potential to transform its gaming sector into a major contributor to the island’s economy. However, success will depend on careful implementation and a willingness to address the challenges that lie ahead.