The incredibly foolish gambling game known as ‘Russian Roulette’ involves the player placing a single bullet in an otherwise empty revolver’s chamber, spinning the cylinder a random number of times so they are unaware of which chamber, loaded or empty, will be fired. The player then aims the gun at their own temple and pulls the trigger. With a six-chamber revolver, the chance of shooting oneself is one in five.
Curacao now has its own variant of this self-destructive game, this time in the form of a new gambling law, the Landsverordening op de kansspelen (LOK), which was approved by the legislature on December 17. It is awaiting approval from the Governor and publication before it can take effect. We will have to wait and see if that happens. The LOK, combined with other factors, could be just as self-destructive for Curacao as Russian Roulette is for the player.
While heavy lobbying from the trust sector has pushed for the introduction of this law, and the Minister of Finance continues to proclaim its benefits, very few have pointed out the dangers of legitimizing and spreading the online gambling industry worldwide—an industry fraught with risks. I would even wager that 80% of the members of parliament haven’t even read the LOK bill, nor do they understand the monster they have created. After all, their minds are focused on holiday festivities, gifts, and new shoes, so who has time to sift through 47 pages of a heavily amended bill, let alone analyze it?
Meanwhile, it is known that financial forensic investigator Luigi Faneyte has filed two complaints against the Minister of Finance for alleged fraud, financial mismanagement, and money laundering. He has focused his attention on both the Minister and foreign investors, as well as the Gaming Control Board (which under the LOK would become the Curacao Gaming Authority), the body responsible for the policy and enforcement of the law. It is commendable that Mr. Faneyte, one of the few to recognize the dangers of establishing and operating an online gambling licensing arrangement without adequate oversight and control mechanisms, has pointed out that this could, in his view—correctly—create a perfect route for money laundering.
Mr. Faneyte has also rightly highlighted the dangers of accepting cryptocurrency payments and noted that the GCB/CGA uses the so-called Electronic Money Institute, a shady bank from the Czech Republic, for transactions that casino operators must make to the institution. It seems this bank is not particularly selective about the types of payment and transaction services it provides.
Another individual who has fought for many years against corruption in the online gambling industry and the exploitation of Curacao as a money laundering hub is blogger Nardy Cramm. Her battle has been ongoing for over a decade and has been so intense that, at one point, due to receiving death threats, she was forced to flee the island and was even placed in a security program for a period of time. For years, she has lived in isolation, hiding under an alias somewhere in the world. It is a tough fight against a giant with unlimited financial resources.
Ms. Cramm, working from the principles and values set forth in the current, almost expired Landsverordening Buitengaatse Kansspelen (Offshore Gambling Act), has relentlessly and continuously fought to challenge the legality of (sub)licenses issued. She has also done everything possible to expose the corruption and misconduct that has occurred in this sector, a struggle that has lasted for years and involved numerous lawsuits. The court has repeatedly sided with her, which has resulted in even more threats and false accusations against her.
As an investigative journalist, she has also managed to uncover the number of online casinos operating globally under Curacao-issued licenses. She has mapped out a total of approximately 15,000 casinos, all of which believe they have a legal gambling license from Curacao, though this is not the case. The fact that these sub-licenses were issued by third parties and not the authorized body, the Governor, means that Curacao's authorities have no idea about these casinos. They don’t know how many there are, who owns them, or where they are located, which is why these casinos are not registered, cannot be monitored, and therefore Curacao cannot enforce any licensing rights.
One can imagine the revenue Curacao has lost over the years, considering that if all 15,000 casinos had to pay, for example, an annual licensing fee of US$ 10,000, it would amount to a total of US$ 150 million in lost income. The mere 40 million in income that Minister Silvania constantly mentions is laughable in an industry dealing with trillions. Even Malta, with approximately 314 licensed casino operators, earns 5 billion euros annually from gambling revenue.
Even if a tenth of these so-called Curacao-licensed casinos (1,500) were to formally register with the CGA, the number would still be unmanageable. Curacao would not be able to oversee such a large number of online casinos. To do so, the CGA would need at least 500 compliance officers, which is impossible to acquire, even if they were to recruit them from abroad. With a meager staff of 8 clerks at the CGA, no progress will be made.
For comparison, the Dutch Gambling Authority, which has about 100 staff members, was only able to process 22 licenses in a year. When asked about the CGA’s entirely inadequate execution capacity, Director Pietersz indicated that this would be addressed by expanding staff, outsourcing, and using AI, an answer that left me completely misled.
This brings me to my main objection to the LOK. It is important to know that legislative lawyers, in performing their work, must adhere to established principles of good regulation, such as the principle of clear objectives, the necessity principle, the principle of the correct authority, the principle of consensus, the principle of transparency, the principle of legal certainty, and the principle of enforceability.
The LOK in its current form does not meet at least three fundamental principles, including that of enforceability. When looking at the extremely detailed criteria laid out in the LOK for assessing license applications and the prescribed requirements for this, as well as the amount of information applicants must provide, which will also be scrutinized by compliance officers, along with the additional monitoring procedures and enforcement measures, one can only conclude that this is a fake law—a cosmetic law aimed solely at deceiving the outside world into believing that Curacao operates in a transparent and responsible manner. Meanwhile, both the minister and the CGA know full well that the monitoring and control mechanisms outlined in the LOK are nowhere near enforceable.
Even more reprehensible is the fact that the CGA is responsible for both (1) the policy on the LOK and (2) its execution (Article 12.1). Effective supervision must adhere to principles of independence, transparency, and professionalism: unbiased, objective fact-finding, judgment, and the disclosure of that judgment. This requires a clear separation of functions between policy and oversight. However, this is not the case with the CGA. The concentration of power within the CGA thus leads to abuse of power and corruption, and the accusations made by Mr. Faneyte against this institution may very well turn out to be justified.
In any case, the LOK fails on essential points. I know that the concept was not drafted by the legislative lawyers from the Department of Legislation and Legal Affairs (WJZ) but by an external lawyer who also boasts of being the ‘architect of the LOK,’ though he apparently lacks expertise in the technical and substantive aspects of legislative work. This lawyer clearly had his own agenda and knew exactly why he formulated the articles the way he did. The material content comes from him, and the Department of Legislation and Legal Affairs seems to have only been involved to ensure the prescribed formatting and procedural completion of the draft.
The LOK is clearly a licensing arrangement designed to impress the financial world about Curacao's integrity and to make an impression on (international) financial regulators. However, no one from that world will ever question whether what the LOK dictates is indeed enforceable—that just won’t happen. At the same time, the LOK sends a signal to online gambling casinos, trust offices, and the inside crowd of the gambling industry that they need not fear oversight and control. The convoluted language of rules, conditions, and regulations cannot be processed due to a structural lack of capacity, which means that crucial information—such as the ultimate beneficial owners (UBOs), gambling and payment services, gambling winnings, transactions, and cash flows, as well as all the issues with cryptocurrencies—will always get stuck in the bureaucracy of the CGA, where it will eventually disappear in administrative fluff. That, apparently, is the intent.
The LOK is a money-laundering superhighway now that adequate oversight and control are missing and impossible to implement. Our geopolitical environment, which is burdened with drug cartels, corrupt governments infiltrated by transnational organized crime, and armed criminal groups, likely cheers on the LOK. Curacao, whose DNA consists of outward-facing services, is showing its darker side by facilitating organized transnational crime with the LOK. Additionally, certain individuals and groups on the island are making desperate attempts to remove the island from the Kingdom of the Netherlands.
The LOK's offer to the underworld and its defiance of the Netherlands sets an extremely dangerous trend in motion that could eventually lead to the island's independence, followed immediately by a full takeover by organized crime. The island is thus at risk of committing suicide. The roulette game of our LOK is already in motion, and I honestly cannot predict the chances of survival.
