Curaçao’s GCB refutes licensing reform corruption allegations

The Curaçao Gaming Control Board (GCB) has robustly responded to allegations regarding corruption, fraud, and money laundering within its gambling licensing reform initiatives.

These allegations were primarily brought forth by local politician Luigi Faneyte, a member of the opposition Real Alternative Party. On November 25, Faneyte lodged a report with the attorney general’s office, claiming that gambling licenses had been issued without proper legal foundation, consequently leading to substantial financial losses.

In July 2022, the GCB unveiled a new regulatory framework for its gambling licensing system, known as the National Ordinance for Games of Chance (LOK), with the aim to enhance transparency and regulatory compliance. The completion of this process was initially targeted for the fourth quarter of this year, but according to GCB Managing Director Cedric Pietersz, the regulator has encountered delays due to an overwhelming influx of licensing applications. As of September 2023, all existing licensed operators are required to reapply under this new regulatory regime.

In a statement issued on November 29, the GCB addressed several of Faneyte’s claims, including allegations that Curaçao’s Finance Minister, Javier Silvania, had compromised the integrity of the licensing process.

GCB Oversees All Licensing Efforts

One of the critical allegations was that Minister Silvania had issued licenses without a legal basis; however, the GCB clarified that the entire licensing process falls under its jurisdiction, as mandated by the Ministry of Finance in December 2019. Thus, it asserted: “The GCB has the authority to grant, amend, suspend temporarily, revoke, or deny licenses, as well as stipulate terms and conditions associated with them. Therefore, the assertion that the GCB lacks legal authority is inaccurate.”

The GCB emphasized its “comprehensive licensing process,” noting that all applicants are subjected to rigorous checks, including sanctions screening, business plan evaluations, and website assessments. Furthermore, it dismissed claims of money laundering, explaining that license fees are required to be deposited directly into an official government bank account, rather than through online gaming portals.

“There is no opportunity for mismanagement. Therefore, the notion that funds may have been embezzled is incorrect. Once payment is confirmed, the license is duly granted by the GCB,” the statement asserted.

GCB to Establish a Dispute Resolution Program

The GCB also responded to recent media coverage regarding the bankruptcy ruling of Curaçao-licensed operator, BC Game, which was decided by the country’s Court of First Instance in November, following a complaint lodged by the player advocacy group, the Foundation for the Representation of Victims of Online Gaming (SBGOK).

In instances where BC Game failed to pay players who filed complaints, the GCB reiterated that the responsibility for addressing player grievances lies with the operators. However, under the newly instituted LOK licensing framework, implementing Alternative Dispute Resolution (ADR) mechanisms will become mandatory. ADR encompasses a variety of dispute resolution strategies including mediation, arbitration, and negotiation, allowing for more independent evaluations of player grievances.

Complaints from players and future reports from ADR entities will be integrated into the GCB’s risk-based supervision strategy, enhancing regulatory oversight. While the GCB refrained from speculating on the specifics of the BC Game bankruptcy case, it clarified that the ruling was an administrative matter rather than a determination of insolvency.

“A trustee has been appointed to manage the estate and ensure player payouts. The GCB is consulting with the involved regulated entity to ascertain appropriate regulatory measures,” it noted.

In recent months, several Curaçao-licensed operators have faced fines in Europe for operating in jurisdictions without the requisite local licenses. For instance, BG Game was fined €840,000 in the Netherlands in October. Regarding such issues, the GCB stated it does not possess the jurisdiction to address alleged violations of foreign regulations.

“In this context, the GCB relies on formal decisions made by competent foreign authorities. Any enforcement actions by the GCB are contingent on factors such as the severity of the infraction,” it concluded.

As the gambling industry continues to evolve amidst growing scrutiny, the GCB remains committed to upholding regulations and ensuring a secure gaming environment within its jurisdiction.