Curaçao’s finance minister says the “worrying” possibility of a Financial Action Task Force (FATF) grey-listing next year over money-laundering risk has helped spur an overhaul of online gambling legislation.
If placed on the FATF’s grey list over anti-money laundering (AML) deficiencies, the island nation could suffer trade restrictions or even prohibitions, finance minister Javier Silvania said on Tuesday (September 26).
Other sanctions could include tighter and debt-inducing due diligence requirements, the withholding of international aid, a loss of tax revenue, and a more painful process for raising capital, he said.
“The likelihood of us being placed on the grey list because our lack of AML legislation within the gambling sphere is real, and it is worrying,” he added.
Silvania was speaking at an online gambling conference that the ministry hosted in the capital of Willemstad, in conjunction with SiGMA.
The gambling hub of Gibraltar was placed on the FATF grey list in 2022, at least in part because of AML-related gambling issues, Silvania said.
The FATF monitors AML, terrorist and proliferation financing risks, and publishes mutual evaluation reports for almost every economic jurisdiction.
The FATF website confirms that Curaçao’s on-site evaluation is tentatively scheduled for June 2024, with discussion of the findings set for May 2025.
Despite being the largest online gambling jurisdiction in the world in terms of numbers of licensees, Curaçao has seen negligible benefits, the minister said.
Last year, the Malta Gaming Authority generated €82m ($86m) from fees alone, while the Curaçao government and the regulator, the Gaming Control Board, received €250,000 from the gambling industry, he said.
Curaçao’s goals in reforming its online licensing include tapping “the staggering amount of revenue that flows through the island”, but also developing service industries, generating jobs and improving skills for residents, as well as boosting the hospitality and retail industries, he said.
“Does it want to continue being the go-to for cheap and easy licences or does it want to step up its game, increase its revenue, and simultaneously, potentially provide better protection and benefits for both its operators and its citizens?” Silvania told the audience.
Curaçao’s online gambling regime, which features a system of master licences with sub-licensees not directly answerable to government, has led to Curaçao-based operators filling blacklists throughout Europe and Australia.
Silvania acknowledged Curaçao “is not highly regarded as a gambling jurisdiction”.
But he promised that the planned National Ordinance on Gambling (LOK) would change that, making it a jurisdiction that is “transparent, accountable, and prosperous”.
The minister said he was aware the conference room was a “mosaic of opinions, interests and backgrounds”, including “those who have reservations about this legislation”.
“To those who have apprehensions about this legislation, I hear you”, he said.
“Changes are always met with skepticism, especially when they impact long-established practices.
“However, for all the operators out there our intent is not to disrupt, but to elevate.”