Bad News for Online Gambling Sites in Costa Rica

It’s official – Costa Rica will now license, regulate, and tax online gambling. There have been talks in recent months about making major revisions to Costa Rican gambling laws, and now after long deliberation the final plan has been published. While the new online gambling scheme offers some perks for the Costa Rican government, many believe the changes will drive online gambling operators out of the country.

The old way was simple: gambling groups could just apply for a normal business license, and then set up online gambling sites in Costa Rica while the government paid little attention to their operations. Now, the newly-formed Comisión Nacional Reguladora de Apuestas y Juegos de Azar will be overseeing all internet gambling in the country. Proper gambling licenses will be needed to offer online gambling services, and penalties will be put into place to punish gambling operators who do not comply.

More importantly, the Costa Rican government will now be taking a much larger slice of the profits made by companies that offer internet gambling in Costa Rica. These groups will be now required to report their earnings to local tax authorities, and a 0.5% tax will be levied on gross income. Additionally, online gambling sites will be required to pay an annual operating fee of $50,000 per year.

The Costa Rican government is clearly after money. Their newly elected president Laura Chinchilla has explicitly said that she intends to use this gambling tax money to fight crime. While the government obviously does not want to scare away gambling groups that are already operating out of Costa Rica, these changes are so enormous that it seems inevitable.

Interestingly, the Junta de Protección Social, which runs the national lotteries in Costa Rica, will not be affected by the new gambling bill.