Curaçao’s regulatory reform in gaming licensing

Curaçao, renowned as one of the most popular jurisdictions in the online gaming industry, is launching a significant reform in its licensing and supervision of gaming companies. This reform is part of a broader legislative process called the National Ordinance for Games of Chance (LOK), which aims to align Curaçao’s licensing conditions with international regulatory standards, while enhancing Curaçao’s reputation as a regulated gaming market. The reform is likely to affect Israeli companies operating under a license from Curaçao in relation to various aspects, including licensing costs, compliance with stringent regulatory requirements, etcetera.

For years, the licensing process in Curaçao was simple and relatively inexpensive, with the regulatory model based on master licenses granted to a limited number of key suppliers. These suppliers issued sub-licenses and served as gatekeepers in terms of enforcing the license conditions. While this system enabled wider access to the online gaming industry, it also created a regulatory burden and triggered global criticism for inadequate supervision.

On September 1, 2023, the Curaçao Gaming Control Board (GCB), opened a new online portal for applying for online gaming licenses. The portal provides comprehensive information about the licensing process, including forms and instructions for applicants. Application submissions began in November 2023, with approved applicants receiving provisional licenses subject to the GCB completing its examinations.

As part of Curaçao’s aspiration to transform the island country into a more regulated and supervised gaming market, it implemented several fundamental changes that will redefine how the gaming industry operates in the country.

Following are the key changes that can be expected to impact how the industry is licensed and supervised:

The master licenses will be revoked and a new licensing system will be established under the LOK ordinance – the licensing structure will be revamped, master licenses will be revoked and, henceforth, every operator will be obligated to have its own license defined by type of activity (such as B2C, B2B or B2B2C). The new regulatory body, the GCB, will directly oversee all license applications and operators’ activities.

New license application procedure – license applications may be submitted directly through the new online licensing portal launched recently for operators. The new procedure includes obligations to provide detailed documents, affidavits and financial documentation and to perform meaningful background checks in order to ensure compliance with the requisite financial and legal standards.

Financial transparency and internal control – the new licensing system imposes more stringent requirements regarding transparency and financial management. Companies will be obligated to report about their ownership structure, to prove financial capability and to implement risk management procedures that conform to the new regulatory requirements.

Increased enforcement – the GCB will be empowered to enforce sanctions against operators who fail to comply with the new statutory requirements, including the revoking of licenses and imposing heavy fines. Unlike the situation prior to the reform, Curaçao will now be substantively capable of enforcing the regulation by taking legal measures and cooperating with foreign regulatory authorities.

Player protection policy – within the scope of the reform, every license will include a player protection policy that emphasizes fairness, the prevention of criminal activities and the promotion of social responsibility. Every operator is obligated to implement processes to ensure that its games are safe and reliable.

The transition to the new regulatory regime in Curaçao requires each and every new or existing operator to re-evaluate its operations, to ensure compliance with the regulations and to prepare for periodic audits and ongoing supervision. We advise gaming companies to prepare for such transition as soon as possible by obtaining legal advice to ensure that they comply with all requirements.