Monday, June 24, 2024

Is It Legal or Illegal to Gamble Online in Costa Rica?

Costa Rica is located in Central America. It is flanked by Panama and Nicaragua. On the west side, it is bordered by the Pacific Ocean, and on the east by the Caribbean Sea. Costa Rica is one of the most sought-after tourist destinations in the world, with tropical jungles peppered across its 19,652 mi.² of pristine wilderness. It may seem odd that this pristine natural enclave would be a top destination for online poker players – but it is. This Central American country has adopted a friendly approach towards online gambling, despite the absence of legislation to this effect.

Many gambling countries and territories have gambling authorities responsible for regulating, licensing and policing the online gaming industry. These include the MGA in Malta, the Government of Gibraltar in Gibraltar, the UK Gambling Commission for the UK, the Ireland Revenue Commissioners in Ireland, and the Government of Curaçao in the Netherlands. However, Costa Rica has no such authority, making it difficult to pin down the legality of online casino, online poker, or other online gambling games. In fact, the absence of a Costa Rica Gaming Authority or Costa Rica Gaming Commission is notable. Nonetheless, many online casinos and online poker rooms have attempted to claim authority from these fictional entities.

For the record, there is no gambling legislation in Costa Rica. For gaming companies to set up shop with online poker games such as Texas Hold’em, Omaha, Razz, Caribbean Stud Poker, 7 Card Stud or other poker tournaments, it’s important to simply follow the existing framework in Costa Rica. This includes the payment of $5,000 for a business license, and $500 for the processing of the gambling license and the legal fees. Unfortunately, that’s all that is required from a legal perspective to set up shop as an official online casino or online poker room in Costa Rica. According to the corruption index, Costa Rica scored 58/100 in 2016. 0 is considered highly corrupt, and 100 is considered very clean. Costa Rica is middle of the ground. It has improved in recent years, given that it’s highest-ranking was 64.50.

What is the status of casinos and gambling in Costa Rica?

At the time of writing, there were several dozen casinos located in Costa Rica, mainly in San Jose. The nightlife in this Central American country is teeming with foreigners, bars, casinos, clubs, restaurants and the like. Many of the top casino companies have targeted Costa Rica as a premier destination for online gaming. Poker is the subject of intense interest in Costa Rica. Annual poker conventions are routinely held in Costa Rica, including the Poker Industry Expo.

High-level attendees include poker executives from ranking online poker rooms around the world, and many of the world’s top players also participate. Some of the highest profile venues that host Costa Rica poker tournaments include the Garden Court, Hotel, and the Fiesta Casino Costa Rica. According to 2006 statistics, there were 32 legal online casinos and poker rooms in Costa Rica across 14 cities. San Jose tops the list with 18 gambling establishments, scores of video poker machines, 1,136 slot machines, 168 table games and more.

What does it mean to have a Costa Rica gambling license?

For the most part, foreign online gambling companies can derive revenues from foreign countries with a Costa Rican gambling license. Additionally, these companies will be subject to foreign tax policies. Oftentimes, companies that operate with a Costa Rica gambling license avoid taxation in this way. Online poker rooms in Costa Rica have a few drawbacks, notably locals cannot be accepted as players, and local banks and payment processing companies will not be allowed to fund poker online games.

The banking industry in Costa Rica is largely dominated by the US, meaning that it may be difficult to get approval. Over the years, hundreds of online gaming companies have opened and closed shop in Costa Rica. Today, only a handful remain. Given that government involvement in online gambling activity is limited at best, the industry is largely unpoliced. It is subject to criminal activity, corruption, and unfair gaming practices.

Players at Costa Rican casinos and online poker rooms routinely complain of poor customer service given that there is no overarching authority to manage activities. The online gambling boom in Costa Rica began with strict regulations in the US. Gaming fans who are seeking out alternative destinations to enjoy Texas Holdem poker and other strategy-based games, eventually settled on island nations and Caribbean countries like Costa Rica. Since foreigners are made to feel welcome in Costa Rica, foreign capital is equally enjoyed.

Entrepreneurs gladly establish themselves in this Central American country. However, the UIGEA of 2006 sounded the death knell for many online gaming operators in Costa Rica. Federal agents and the Department of Justice moved swiftly to shut down online gaming companies. Since then, greater liberalization of online gambling legislation in the US and elsewhere has resulted in a resurgence in interest in online poker and online casino games in Costa Rica.

Where to next for Costa Rica gambling legislation?

Costa Rica may not be the first name on the list when you think of player friendly online gambling legislation. It is an environmentally friendly country that prides itself on liberal government policy, the protection and preservation of the natural environment, and being a tourist Mecca. The absence of legislation is not to be confused with the prevention of online gambling. While locals are not allowed to play online, everyone else is.

An important component of Costa Rican gambling legislation, as it pertains to online poker is the following: it doesn’t matter where the i-Gaming servers are located – at home or abroad. The only requirement is that Costa Rican players are not permitted to gamble online. Recall that the only requirement is a data processing license and a physical address in Costa Rica. However, local businesses make it much easier for foreign operators to set up shop in Costa Rica by providing them with the requisite paperwork. The lack of oversight in Costa Rica for many years led many other gambling authorities such as the UKGC preventing Costa Rican online poker rooms from offering their services to UK players.

Summing it Up:

The Costa Rican Times ran an editorial on 10 January 2018 detailing the bare facts about the online gaming industry. Simply put, it is 100% legal to operate an online poker room in Costa Rica, provided that services are not offered to locals. Costa Rican players can enjoy free play games at online casinos and online poker rooms, but no real money games are permitted.

Elliot is the Editor at ABCMoney. He manages a team that writes and contributes to many leading publications across a number of industries.

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