Curacao’s New Online Gambling Law Sparks Debate Over Industry Reform

The recent approval of Curacao’s new online gambling law, known as the Landsverordening op de Kansspelen (LOK), represents a pivotal moment for the island’s gaming sector. Passed in Parliament with 13 votes in favor and six against, the LOK is intended to establish a more transparent and regulated framework for online gaming.

Finance Minister Javier Silvania has been a staunch advocate of the law, promoting it as a tool to generate at least ANG40 million ($22.2 million) annually in licensing fees. However, the legislation has drawn sharp criticism from whistleblower Luigi Faneyte, who has labeled it a potential “money laundering law” fraught with risks for Curacao and its standing within the Kingdom of the Netherlands.

Minister Silvania argued that the LOK is essential to addressing longstanding vulnerabilities in the island’s online gambling sector, including a lack of oversight and the misuse of licensing by criminal organizations. The new law imposes stricter licensing criteria and requires applicants to pay a minimum fee of ANG120,000 ($66,600). These measures, according to Silvania, will ensure that only reputable operators remain in the industry.

Currently, 200 licenses have been issued, with another 1,000 applications pending approval. Revenue generated under the new system is earmarked for social initiatives, including increased pensions and support for sports programs.

While Silvania has expressed optimism, Faneyte has voiced deep concerns about the law’s implementation and potential repercussions. He contends that the LOK lacks the necessary safeguards to prevent abuse and criticizes the absence of detailed plans to ensure local communities benefit from the changes. Faneyte warned that the high costs associated with implementing the law could outweigh the projected profits, creating a financial burden rather than a boon.

A contentious issue under the LOK is the transformation of the Gaming Control Board (GCB) into the newly established Curacao Gaming Authority (CGA). Faneyte described the process as chaotic and expensive, noting that the GCB is already overwhelmed by the growing number of licenses. With insufficient staffing and ambiguous regulations, the GCB has struggled to manage complaints from both players and operators. Players have reported financial losses and illegal activities, while operators criticize the lack of clear guidelines and responsiveness.

Faneyte also raised alarms over the acceptance of cryptocurrency payments by the GCB, arguing that it is being done without a proper legal framework. Both the Central Bank of Curacao and Sint Maarten and the Dutch Central Bank have issued warnings about the risks associated with such practices, citing a lack of oversight and the potential for misuse. Faneyte fears that these regulatory gaps could attract organized crime to Curacao, turning the island into a hub for illicit activities. He further cautioned that these issues could have serious consequences for the Kingdom of the Netherlands, potentially tarnishing its reputation in the global financial system.

The stakes are high, as Faneyte emphasized the possibility of Curacao being blacklisted by the Financial Action Task Force (FATF) if the implementation of the LOK is deemed inadequate. Such a designation would label Curacao as a high-risk jurisdiction, making it an undesirable partner for international financial institutions and causing significant economic and political isolation.

Despite these warnings, supporters of the LOK view it as a step toward professionalizing Curacao’s gambling industry. Minister Silvania has maintained that the law will provide much-needed structure and revenue, addressing criticisms of the island’s regulatory framework. The funds generated are expected to support social programs aimed at improving the quality of life for disadvantaged citizens.

Faneyte remains unconvinced, vowing to continue advocating for those harmed by the LOK, including players and operators who may suffer under the new system. He predicts that the implementation of the law will lead to chaos and financial instability, describing the LOK as a missed opportunity for meaningful reform and a threat to Curacao’s integrity.

The passage of the LOK places Curacao at a critical juncture. While proponents envision a more regulated and prosperous gaming sector, critics foresee potential disasters stemming from inadequate preparation and oversight. As operators who had previously left Curacao due to regulatory uncertainty reconsider their position, the island’s ability to compete with Tier 1 jurisdictions such as Malta and the Isle of Man remains to be seen.

By fLEXI tEAM