Costa Rica Gaming Laws

Costa Rica Gambling Overview

The Costa Rican Government does not have specific laws regarding online gambling. According to Costa Rican law, it is illegal to receive money from a game with a random outcome, as opposed to an outcome based on skill. This would make it illegal to earn money from games such as blackjack, baccarat and roulette, but legal to earn money from games such as card games and rummy. Costa Rican law states that wagering does not take place at the physical location of the operator’s gaming servers. Because of this, companies that reside within Costa Rica can legally offer online wagers to customers all over the world, as long as they do not accept wagers from residents of Costa Rica itself.

More Lack of Legislation

Another result of this lack of legislation is that most companies are self-regulated – gaming companies are not subjected to the regulations, monitoring and testing in the same way as they would be in other jurisdictions. This allows the operators a great deal more freedom to operate as they see fit. The disadvantage of lack of regulation for these operators is that in mid-2007, gaming websites based in a jurisdiction that does not meet certain strict regulatory laws, would be banned from advertising in the UK.

In 2008, Costa Rica and the United States reached a settlement agreement regarding compensation over US gambling restrictions. Costa Rica was claiming compensation for the closure of the US online gaming market to Costa Rican operators. Costa Rica accepted an offer from the US of better access to other service markets, such as research and development, technical testing and analysis and storage.

Costa Rican Gaming License

Companies are not issued with a gaming license in Costa Rica due to the illegal nature of gambling within Costa Rica, however the license for offshore gaming operators is referred to as a data processing license and these companies are not subject to betting or gaming taxes. Taxes in Costa Rica are subject to territoriality and therefore any business income with a foreign source is tax exempt, although in 2010 this is currently under consideration regarding whether a 2% tax on gambling activity will be introduced. These licenses are, in fact, not strictly necessary in order to operate an online gaming operation from Costa Rica, however most companies apply for the license in order to appear reputable to their clientele.

Costs of a Costa Rican Gaming License

Internet gaming license are a recent requirement in Costa Rica. The Costa Rica corporation and license costs $15,000 and then a further US$1,500 every three months in order to keep it active.

In 2007, the Partido Accion Ciudadana introduced legislation to tax sports books and other electronic betting operations. The tax is based on the number of employees on a payroll and begins with firms with as few as ten employees. A fee of ten million colons per annum is charged to a firm of ten employees and this increases up to a tax of 28.4 million colons for firms with more than 61 employees.