The Beginning of the End For Online Gambling in Costa Rica

costa-rica-ocean-viewFor over a decade Costa Rica has been a haven for online gambling operators. Several online bingo sites were located in Costa Rica including one of the world’s largest online bingo networks. For years the industry did very well but today the industry is under pressure. The gambling industry in the country maintains a low profile because of the constant pressure from law enforcement in the United Sates. In a few cases Costa Rica has allowed officials from the US to arrest gaming operators in Costa Rica. After a decade of prosperity the industry is showing signs of strain.

A recent film, ‘Runner Runner’ starring Ben Affleck and Justin Timberlake has brought unwelcome attention to the online gambling industry in Costa Rica. The film tells the tale of a coll,ege student who is convinced he has been swindled and goes to Costa Rica to confront the owner of an online gambling site. The film is being used by the American Gaming Association in their attempt to lobby congress for federal regulation of online gambling. The AGA’s actions are undermining the efforts of entrepreneurs in Costa Rica that developed the nation’s multimillion dollar industry.

Internet gambling operators arrived in Costa Rica just before the turn of the century. Costa Rica was not the first country to welcome online gaming operators. The tiny island nation of Antigua was the first to legalize online gambling in 1994. By 1999 there were hundreds of operators in Antigua and the industry took in about a billion dollars annually. The US took a prohibitionist course and banned online gambling. In 2006 the infamous UIGEA was passed. In Costa Rica close ties with the US allowed the Central American nation to build a prosperous call center and outsourcing industry. Lax tax laws allowed online gaming operators to ship their money to overseas accounts avoiding taxes in Costa Rica.

The first years of the new century were a golden age for gaming operators in Costa Rica. Online bingo operators, bookies and casino operators could operate in relative freedom. The arrests on what has become known as ‘Black Friday’ put real pressure on operators. One popular online bingo network closed and several operators went out of business to avoid prosecution. The abrupt exit of major brands and constant pressure by tenacious law enforcement agencies in the US has fragmented the online gaming industry in Costa Rica. To make matters worse operators now face serious competition from states that have legalized online gambling.

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