The European online gambling market is rapidly growing. The next few years show growth from $52.30 billion in 2024 to $88.16 billion in 2029, thus recording an 11.01% yearly increase. Although Curaçao currently holds a significant share of the market, this is likely to change rapidly, especially now that the official abolishment of the Curaçao master license regime has entered into effect. These issues are becoming increasingly evident amid recent court decisions, which have increasingly favored European players.

Many operators choose to work under a Curaçao license due to its easy accessibility and simplicity during the initial stages. However, the easy access to the license is now no longer relevant, as operators are required to go through a more scrutinizing licensing process with the Curaçao Gambling Control Board to obtain a license. Previously, operators could simply engage with an existing master license holder, but with the abolition of this status, this previous advantage no longer applies.

Consider a typical player from a European country who plays at an online casino licensed by Curaçao instead of a local license as required by local law. When the player experiences a loss, they may decide to recover their money and file a lawsuit against the gaming platform in a court that adheres to European Union legislative acts. After obtaining a favorable judgment in their home country, the player can then bring this judgment to Curaçao for enforcement. According to the latest case law in Curaçao, the courts there have taken a very permissive approach towards such claims and have enforced them. The alternative for Curaçao-based companies and operators who refuse to pay such claims is the risk of being declared bankrupt. This process has provided a platform for fraudulent players and opportunistic lawyers to exploit the legal system to recover their so-called “lost” funds. Consequently, many operators are abandoning Curaçao licenses in favor of other jurisdictions like Kahnawake, Anjouan, or Tobique.

The current lack of specific protective measures found in other jurisdictions is a critical aspect of the issue. For example, Malta has promulgated Bill No. 55, which safeguards the licenses within its jurisdiction from the interference of foreign court rulings. This legislation is one of the most important in the field, ensuring online casino operators are not subjected to discrimination. To illustrate, if an operator is sued by players from Europe who have placed bets or wagers with the operator under a Maltese license, the local courts in Malta will not deliberate cases in which the legality of the use of the Maltese license is questioned if the license was used in accordance with Maltese requirements. Instead, the courts will block or dismiss any foreign judgment introduced in Malta, thereby protecting the operators. In contrast, Curaçao courts have taken a completely different course, actually paving the way for players to exploit the system and bring claims against Curaçao operators for the reinstatement of legitimately “lost” funds.

Alternative Licenses: Kahnawake, Anjouan, and Tobique

Amid this danger and lack of protection, operators are increasingly considering alternative licensing options in other jurisdictions such as Kahnawake, Anjouan, and Tobique. These jurisdictions offer several advantages that make them attractive to operators.

Kahnawake: The Kahnawake is one of the oldest and most reliable of the jurisdictions providing a license for online gambling, and can be found in Canada. It is famed for its rigid regulatory regime coupled with strong legal resistance against opportunistic litigation. Kahnawake licensed operators can rest assured that the legal environment will be stable and predictable, thus, the legal issues that can be very costly are minimized.

Anjouan: Part of the Union of the Comoros, Anjouan also offers favorable conditions for online gambling operators. This jurisdiction does not require operators to have a physical presence, allowing them to avoid direct oversight by local courts. Anjouan provides flexible business conditions and reliable legal protection, making it an attractive alternative for operators looking to minimize legal risks.

Tobique: Also located in Canada, Tobique offers online gambling operators unique opportunities. This jurisdiction is characterized by flexible management and provides operators with a stable and predictable legal environment. With no requirements for physical presence and strong protection against lawsuits, Tobique is an appealing option for operators seeking a secure and stable licensing base.

These jurisdictions share several common advantages that make them preferable for operators:

Protection against opportunistic lawsuits: These jurisdictions often have better protections against frivolous or opportunistic lawsuits, reducing the risk of costly legal battles.

Flexible jurisdiction management: Many alternative licenses do not require operators to have a physical presence in the licensing jurisdiction. This allows operators to avoid direct oversight by local courts, which can lead to unfavorable rulings.

Stability and predictability: By choosing a jurisdiction with a more stable and predictable legal environment, operators can safeguard their business from the type of legal exploitation observed in Curaçao.

The i-gaming sector is a bright and always growing one, with many new regulators, permissions, prohibitions, jurisdictions, and licenses coming up all the time. By working under just one well-known license, operators narrow down their options, which is an unwise strategic decision. Surely, the Curaçao license is one of the easiest to get and most recognizable today, but this strong brand name has very high risks. Nevertheless, new licenses give new chances for the operators, with the major advantages being stability and safety.

Curaçao is approaching the finishing line of their online gambling reform, with the new law being sent to the parliament. Markus Björk at Slotsoo has been in touch with both the Ministry of Finance and several Curaçao operators to find out how they feel about this big change. Do European license providers have a reason to feel threatened by Curaçao casinos 2.0?

LOK Now Just Waiting for Parliament Approval

On December 19th, Curaçao’s Ministry of Finance informed that the new law has been officially submitted to the parliament. The National Ordinance for Games of Chance, commonly referred to as LOK (Landsverordening op de kansspelen), is expected to come into effect in the first half of 2024.

Finance Minister Javier Silvania, the front figure of the reform, shares his excitement about this historical moment:

“We are very happy to reach this final stage. The submission of the LOK to Parliament is not just a procedural step, but a leap towards transformative progress.”

No More Master Licenses or Middle Men

The current setup of the Curaçao casino license is very unique, with four master license holders being in charge of giving licenses to individual casino operators and ensuring their compliance to the regulations.

This has resulted in big quality differences, and if you were to ask ten EU players how they feel about Curaçao casinos you would get very varied replies. Another critique with the current system is that most of the financial gain goes to the four master license holders, while the island of Curaçao is left with light pockets.

LOK will put an end to master licenses and middle men and require all licenses to be applied directly from Curaçao’s Gaming Control Board. This means more uniformed quality and better control. The new law will also require gambling companies to have physical presence on the island, creating new job opportunities for the locals.

The Curaçao casinos we interviewed all welcome the new setup. Spinwise (Tsars Casino) sees some hurdles, but says it will be worth it in the long run:

“The prohibition of sublicensing by master licensees introduces a new financial dynamic for individual companies, albeit with associated fees. While adaptation to the new framework may pose short-term challenges, the long-term benefits are expected to outweigh these initial obstacles.”

The Curaçao License Will Remain Tax Free

1. No tax on winnings
2. No restrictions on player nationality
3. Strong regulatory framework

Keeping the Balance Is Crucial for Success

Finance Minister Javier Silvania shares that they had a very inclusive approach when drafting the new law. They consulted all the stakeholders to make sure LOK will consider different perspectives and not just serve one group. The country of Curaçao, its citizens, the gambling industry, and the players should all benefit from the reform.

Many license jurisdictions that go through a re-regulation fall into the trap of legislating too much, without the government listening to the industry or the players enough. This leads to fewer license holders and lower channelization rates, as both the operators and the players search for more attractive solutions from other countries.

We wish Curaçao good luck with their new start in 2024!