Costa Rica Puts Online Casino Tax Reform on Back Burner

Published Monday, April 04, 2011 -

Costa Rica in Central America is positioned as one of the best locations to open and operate an online casino business. A new government in Costa Rica put in doubt the status qua situation regarding taxation of the internet wagering industry. Since August of 2010 a new tax plan was in the works keeping the online gambling industry on tenter hooks. The plan introduced by President Laura Chinchilla was intended to help the government find money to fight the rising crime rate in Costa Rica.
After a long protracted debate it has been reported by AM Costa Rica that the proposal has been put on the back burner for now in an effort to put through more important tax reforms in the country. 

The new taxation regime was one of the cornerstones of the newly elected president’s campaign and may still be slowly introduced but at a later date. According to Marco Vargas, Minister of the Presidency, the idea of changing the taxation regulations, “was not viable”. Opposition to the proposal was led by a number of factions.  The Association of Call Center Employees, the Costa Rican Association of Casinos and the opposing political parties all spoke up against the plan. President of the CRAC Jorge Hidalgo commented that the proposal as it was presented looked to dismember the gambling industry and close it down.

A stable government does not necessarily translate into stable laws and regulations. Many online operations settled into the Costa Rican jurisdiction are still keeping a close watch on any political movement in the country. It was suggested that unless Costa Rican operations are designed to offer services to a licensed entity in a separate jurisdiction, there’s no certainty that the operation is in compliance with current Costa Rican law. Managing to keep on top of the latest developments in taxation and regulatory requirements can be a full time job for online gambling operators. When a government decides to impose a 15% gross revenue tax on land-based casinos and a $50k/year charge on online gambling operators the mood can change very fast.


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