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Bill Would Tax Costa Rica Based Online Gambling Sites

Written by:
C Costigan
Published on:
Jul/23/2009

Every few years the Costa Rican government comes up with a novel plan to either tax or license online gambling firms operating in that Central American nation.  Each time, the attempt has failed.  In two weeks Costa Rica will try once more. 

The nation is home to more online gambling companies than any other in the world, most of which cater to the North American sports bettor, casino and poker player.

The Costa Rica Finance Ministry will send a bill to the Legislative Assembly proposing a 2 percent tax on income earned by the gambling industry.  The government believes it can generate $85 million as a result.

The problem:  When Costa Rica began charging a licensing fee some years back, only a handful of the most reputable Internet gambling firms paid.  Others did not.  One that did - Legendz Sports - ended up leaving the country. 

Then there was previous tax proposals that would have punished the bigger more successful wagering firms by taxing based on number of employee stations. 

Adam Williams of the Tico Times reports there are officially 46 online gambling businesses operating in Costa Rica.  Unofficially there are probably a few hundred more however.  Therein lies the problem.

Should the bill pass, a regulatory body will be put in place to ensure that gambling locations and affiliates are licensed and honor the new tax.  But just like in Vegas, gambling in Costa Rica's land-based establishments and online has seen a drastic drop in revenue over the past year with the current global economic crisis.

Jorge Hidalgo, vice president of the Costa Rican Association of Casinos, said the industry is among the hardest hit by the recession. "Activity has fallen about 35 percent, and in addition to that we have fewer work hours and have had to let go about 500 employees," he said.

The bill is anticipated to reach the Legislative Assembly on Aug. 3.

Christopher Costigan, Gambling911.com Publisher 

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