Costa Rica Cracks Down on Casinos

The Costa Rica government, without any warning, has reportedly cut down casino operating hours from 24 to 8 (6 pm to 2 am).   The Central American nation, which is home to more online gambling businesses than any other in the world, has always worried operators over the Government's perceived "wishy washy" position as it applies to gambling.  In years past, the Costa Rican government has considered everything from taxation to outright bans.  Whether recent actions have a trickle down effect for the online gambling sector remains to be seen.

Torstyn Cole, casino player developer and a manager at Casino Paradiso in the Clarion Hotel, told AM Costa Rica he thought many aspects of the decrees were ridiculous. The decrees were too harsh he said. Cutting casino hours from 24 hours to 6 or 8 hours a day was plain crazy he said.

The decrees have the force of law and some simply restate laws that are not being enforced.

“It's the Ticos, the locals who work for the casinos who will be impacted by this,” Cole said. “The owners have already made their money.” Cole, who added that he does not represent the owners of the casino, said “If its just to keep the Russians out, that's just insanity.”

Casinos can no longer be free standing.  They must be located within hotels that meet the following requirements: At least 60 rooms; at least three stars classification and no more than 15 percent of the hotel space. 

AM Costa Rica reports that one major international firm is now reconsidering investment of $5 million to refurbish a downtown San Jose hotel they had planned to include a casino as a result of the new decree.

Fiesta Casino, which has four operations in the country, will have to cut half of its employees if the decrees go through.

There will also be a "no more free liquor" rule applied. 

But there are elements of the decree that could easily be applied towards online gambling.

For example, some of the wording suggests that casino owners and others will have to donate for psychological help for addicted gamblers and that a special health permit for casinos that will cost $5,000 a year.  Once again, it appears as if the current government of Costa Rica may be looking for some type of compensation from the casinos operators.  Earlier this decade, the country required online betting firms to pay a yearly license that only a handful contributed to. 

Because the underlying rationale for the new decree includes "branding casinos as places that can encourage prostitution, drug addiction and insecurity", the implication is that Costa Rica is now looking down upon the industry.

In the whole scheme of things, Costa Rica's land-based casino business is believed to be relatively unprofitable with only a few exceptions (The Colonial in Downtown San Jose may be one exception) while the online gaming industry delivers millions of dollars to the country's economy through employment of thousands directly and indirectly (via support sectors such as hospitality, food and beverage, transportation, security and communications, just to name a few).  The industry also is among Costa Rica's highest paying, therefore helping to stimulate the economy.

Costa Rica filed for World Trade Organization (WTO) arbitration on January 28, seeking compensation from the United States as a result of the U.S. withdrawal of its commitment on cross-border gambling services. The new arbitration requests could potentially derail the settlement for compensation agreed to late last year by the U.S. and the E.U.

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Christopher Costigan, Gambling911.com Publisher CCostigan@CostiganMedia.com

Originally published April 16, 2008 11:37 am EST