Online Casinos in Costa Rica
Last Updated: Nov 11, 2011
Online casinos are gambling websites where visitors can play casino games and place bets on sports, celebrities' behaviors, lotteries, and just about anything. Some of the online casinos assist their clients over the telephone or email to handle quality assurance.
As of 2000, there were approximately 125 businesses managing online casinos from servers based in Costa Rica. It is difficult to determine how many gaming ventures are in Costa Rica since online casinos are registered as technology corporations, and not as online casinos. They employ about 2,500 Costa Rican citizens (1999 estimate) with salaries ranging between $480.00 and $1,200.00 (1999 estimate) per month. They receive an average of 20 thousand calls per week (1999 estimate) and generate a significant amount of tax-free money.
Online casinos based on servers in Costa Rica are free to do almost anything they want over the Internet as long as they ensure that citizens of Costa Rica or legal permanent residents of Costa Rica do not access their servers to play the games or place a bet.
- Can host any type of gambling games
- Can encourage visitors to place bets on activities or events over the Internet
- Do not pay taxes on revenues generated by the gambling business
- Can not be held liable for not fulfilling their representations to their customers
Online casinos are not committing a crime under Costa Rican law either by hosting their servers with restricted access in Costa Rica, or by calling or emailing their customers overseas to ensure accurate transactions and enhance their customer services for the following reasons:
- No Costa Rican citizen who lives in Costa Rica can place a bet on an online casino because all Costa Rican IP addresses are blocked from accessing the sites.
- The games or subjects of bets do not take place physically in Costa Rica.
- Online casino transactions take place in another country, not in Costa Rica.
- Technically speaking, what online casinos do in Costa Rica is to manage their software to ensure that their transactions are properly assessed and enhance their customer services.
- It is not a crime to call overseas to assist on a bet according to Costa Rica law, and therefore, it is irrelevant whether or not gambling is illegal in the country where the casino is calling to assist on a bet.
Costa Rica is the Mecca of online casinos because it has the best infrastructure available in the Caribbean basin, a reliable telecommunication system, multilingual workers and a lack of online gaming and Internet regulations. To better understand how the online gambling casinos are doing business in Costa Rica, this article will address the regulations of the casino industry in Costa Rica, and how the on-line gaming industry conducts business in Costa Rica. We will also issue a warning to online gamblers playing at online casinos hosted in Costa Rica.
Owners usually create a corporation that is set up to manage their casinos. Casinos must be accredited and approved by the Tourist Board of Costa Rica. They must be located in a hotel rated three stars or above, and at least 100 meters (one block) away from places of worship, hospitals, clinics, and schools. No one under 18 years old is allowed in a casino.
Failure to fulfill these requirements will cause imprisonment of the owner of the casino and/or a cancellation of the casino's license.
Casinos are required to pay municipality operational fees, facility health permits, and any other tax applicable just like other businesses based in Costa Rica. In addition, they pay an extra 10% on the monthly net revenues and for the number of game tables that they host. They usually pay 50,000 colones (roughly $100 in 2007) per table.
It is a crime in Costa Rica to earn or lose money by placing a bet on the outcome of a game/event/activity/behavior, or by playing a game whose outcome is based on people's luck, and not on their abilities and skills to play the game. Therefore, it is illegal to collect or earn money based on the outcome of bets or games such as baccarat, dice, twenty-one, poker, black jack, roulette, and lotteries,except those organized by the Red Cross and educational organizations such as schools. The national lottery managed by the Costa Rican organization called "Junta de Protección Social" (bingo) is also exempted from this law.
It is legal to play any of the following games: billiards, card games, canasta, draughts (U.S. checkers), dominoes, casino, rummy, darts, 13, Caribbean straight poker, or any game where the person's abilities and skills will determine the outcome of the game.
Casinos host legal games according to the law as well as illegal games and games that are not clearly defined by law. The most commonly played games are rummy, and Caribbean straight poker. Games that are not clearly defined by law and are hosted in casinos are certain types of games using dice as well as pai gow - Chinese style poker. Casinos also host games that are prohibited by law such as roulette and gambling machines. Roulette is prohibited by the following laws: Article 3 of the "Reglamento a la Ley de Juegos," January 24, 1974 decree # 3510-G, published in "el Alcance #15 de la Gaceta #21" on January 31, 1974, and " Reglamento a la Ley #3," on August 31, 1922. Decree number 87,229, issued on June 13, 1978, prohibits gambling machines. However, an appeal was filed against this decree. This appeal essentially allows casinos to host these machines until the appeal is considered.
Since it is against the law to either collect or pay monies for bets or gambling games in Costa Rica, the casino industry implements a payment system to get around these laws so that casinos can hold you legally liable for what you owe them or to be able to pay you at their facilities. Casinos encourage gamblers to purchase tokens that are used at their casino facilities, or they give you a credit line by signing letters of credits, mortgages, promissory notes (I. O. U. notes), or written agreements so that installments or collections can be performed and that they are still protected by regular business laws, and not gambling. There are no laws that protect or regulate either the gambler or the casino owner from collecting monies generated by gambling.
Setting Up Online Casinos
First, create your corporation in Costa Rica that will provide one of the following services: network administration, or intranet administration. It will cost you $1,800.00 dollars.
Second, find a place in Costa Rica that you can set up your office, hire the necessary personnel, and manage your web site from Costa Rica as any other business in the Internet industry. There is an operational permit fee that must be paid of about $50.00 applicable to any type of business.
Third, block all the IP addresses located in Costa Rica to abide by the law and ensure that no citizen or legal permanent resident of Costa Rica connects to a server in Costa Rica to place a bet with your online casino.
Fourth, open an offshore bank account. Bahamas, Antigua, or countries in the Caribbean are the most logical places for offshore banking so that you can make your transactions outside of Costa Rica. Financial activities will be conducted through these accounts.
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