Curaçao Licence History and Future
Curaçao licenses have been associated with being a quick and easy fix to obtain due to its lacking in regulations and monitoring compared to other jurisdictions. There are currently 4 Master Licences in Curaçao and B2C operators apply for a sub licence under one of the Master Licences – equivalent to a white label in other regulated markets. This created restrictions to operators such as payment providers not recognising the sub licence, hence a sub licensee had to add a subsidiary to the structure in an EU country in order to process payments.
Curaçao has identified these weaknesses that have tarnished the country's reputation and is promising to uphold integrity and adhere to best practices within gambling operations, particularly regarding anti-money laundering measures, fraud prevention, and player protection.
It is being stressed that the new legislation being identified as LOK will explicitly reverse this sentiment. Curaçao intends to identify the owners of businesses operating within its borders thorough due diligence. Transparency regarding the source of funds entering the country is required, and operators must adhere to legislation aligned with reputable jurisdictions and meet minimum international standards for anti-money laundering.
The intention is to overhaul the regulatory regime for the iGaming industry and abolish the current system of master and sub-licence.
What is LOK?
The National Ordinance on Games of Chance (LOK) is the new legislation currently progressing through the parliamentary process. The LOK legislation is expected to be enacted in the first quarter of 2024.
The LOK will have general provisions that apply to all kinds of gaming activities – including issuance, suspension and withdrawal of licenses and responsible gambling – under the supervision of the CGB. The CGB will grant licenses to both B2C-operators and B2B-suppliers that provide critical services or goods related to games of chance, such as game providers, platform providers and payment services providers.
GCB and GCA?
The Curaçao Gaming Control Board (GCB) is a foundation, incorporated on April 19, 1999, with the specific purpose of becoming the regulator for the entire gaming industry operating in and from Curaçao. The GCB will start issuing direct licences to gambling operators and will hold them accountable to internationally recognised standards from 1 September 2023 , with a plan to transfer these licences into the new regulatory framework once it is enacted.
The LOK, includes the establishment of a completely new regulator body known as the Curaçao Gaming Authority which will see the creation of an independent regulatory body. The Curacao Gaming Authority shall be replacing the Curaçao Gaming Control Board. The new authority will issue independent B2C and B2B licenses, with already licensed companies under the previous regime having a chance to express interest in a new licence or suspend their operations.
When are the new licences being issued?
The Gaming Control Board (GCB) will begin accepting applications for new operating licenses directly to operators under the existing legislation, not the LOK as from the 1st September 2024 through its dedicated online portal.
During SiGMA Curaçao which is going to be held between the 25th and 28th September 2024, the GCB shall hold a session related to the review of the portal along with details on the 3 application forms, necessary supporting documentation, how the application will be evaluated and what steps will need to be taken following issuance of a licence.
In addition, the transition of the supervisory entity as operators move between their sublicense agreement to their new direct licenses at any given time will be discussed and clarified.
GCB Application Process
The GCB Application Process is forecasted to be easy and straightforward. The GCB is set to launch a dedicated portal for operators to register, facilitating the process of obtaining a direct licence. The application process is divided into three stages:
- The Online Gaming Application. An analysis of the proposed business operations, including marketing and distribution strategies and growth targets.
- The Personal Declaration. This is the identification of the key people behind the business. Any UBO with 10% or more of the business ownership will have to provide fully verifiable identity information, Source of Wealth, Source of Funds which will confirm that UBOs are fiscally stable to sustain the license and of course that the sources are legitimate.
- The Corporate Disclosures. A license can only be issued to a Curaçao company and details of that entity will need to be provided to the GCB as part of the application process.
Once an applicant has satisfied the GCB in terms of the forms and documentation submission, then a license will be issued. Within six months of issuance of the license, audited policies and procedures will need to be submitted for assessment. These policies and procedures should align with international standards expected of an upstanding licensed gambling operator. Player protection, dynamic AML procedures, KYC, responsible gaming and robust technical and info security setups will all be expected as standard in the new Curaçao regime.
Existing operators and Transitory Period
To ensure continuity of operations, the regulatory body will extend all master licenses for another year.
Current Sub licensees have two options:
- To apply for a new licence under the current regime with GCB and adhere to the conditions that will be issued – these will automatically be transferred to the new regime once in force. It is important to emphasize that one of the conditions shall be that new licensees cannot issue sub licences.
- To keep on operating under the Master licensee and apply for a new license once the LOK is enacted. They will have 3 months to apply and 9 months to operate under the previous regulations
To facilitate a smooth transition for existing operators who are willing to adopt the new regime, the government will ensure uninterrupted business operations.
However, operators who choose not to transition to the new licensing regime must cease operations once the relevant master licence expires.
How can we assist
WH Partners has been monitoring the overhaul of the new regulations since its inception. WH Partners also hosted the SIGMA Europe 2022 Regulation and Compliance Conference hosted by WH Partners where the Finance Minister Javier Silvania was the main speaker who explained the main policy objectives of the LOK.
The Gaming Control Board (GCB) will begin issuing new licenses directly to operators under the current legislation. However, it's essential to note that these new license holders will not be allowed to issue sub-licenses. We understand that navigating the licensing process might seem complex, but we're here to help you every step of the way. Our team can assist you in completing the necessary forms and compiling the relevant supporting documentation for a smooth application process. We'll ensure that your license application meets all requirements, including Know Your Customer (KYC) checks, and adheres to the highest standards of player protection, AML procedures, KYC, responsible gaming measures, and information security.
Our gaming team will be present at Sigma Curaçao between 24th and 28th September.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.