Illegal Betting Site in Costa Rica Faces Closure Three Days After Launch

Posted on: November 18, 2022, 06:52h. 

Last updated on: November 18, 2022, 06:52h.

Just as the 2022 FIFA World Cup is about to begin, a new sportsbook popped up in Costa Rica, ready to serve sports bettors in the country. However, just a few days later, it’s already running into trouble with the authorities.

Costa Rica national World Cup team
The Costa Rica national soccer team poses as it celebrates its entry in the World Cup. A new sportsbook that just opened in the Central American country is causing a dilemma for authorities. (Image: Reuters)

Costa Rica’s Social Protection Board (JPS, for its Spanish acronym) called out for its grandiose entry into the sports betting industry. The president of the government-led organization, Esmeralda Britton, pointed out that only the JPS that has the authorization to develop betting mechanics within the national territory.

As a result, Britton expressed her frustration with the site, and denied that it has authorization to operate in the country. However, the website doesn’t plan on changing anything.

Exploiting A Loophole launched on November 14 and, according to public records, received by 25 of Costa Rica’s 81 cantons permission to operate. These are divisions of the country’s seven provinces, each of which has its own local government.

However, according to the JPS, those cantons gave their approval based on an incorrect interpretation of a particular federal law. That law establishes and authorizes tax collection for gambling-related activity.

However, it only covers ancillary operations, such as customer service, in support of operators who target sports bettors in other countries, not those within Costa Rica. It does not authorize these companies to operate land-based sportsbooks, lotteries or games of chance.

Costa Rica’s sports betting laws are somewhat in a grey area. Land-based sports betting is illegal unless the JPS offers it (which it doesn’t). Online sports betting, however, is not a prosecutable crime.

This means an online operator can open an office in Costa Rica. But, because of the way the law is written, it cannot process bets through in-country banks and, technically, cannot accept bets from Costa Ricans.

The individuals behind the company likely know the rules. One is Luis Polinaris, a lawyer who was also once the head of the JPS. He created the platform with a long-time Costa Rican businessman, Cristian Obando.

The two held a gala to celebrate the launch of the site, knowing, and possibly not caring, that it would draw unwanted attention. It could also be an attempt to get the government to react, as the JPS has yet to facilitate legal in-country sports betting.

Equally frustrating for the JPS is the lack of responsibility on the part of the cantons. These, as government entities, should have understood the nature of the law and that they have no authorization to approve in-country sports betting.

A Secondary Agenda

Obando, in an interview with local media outlet Diario Extra, said that the company isn’t just looking at sports betting. He explained that it arose in order to help clandestine lottery sellers transition into certified, legal operators.

Lawmakers are pushing for changes that would increase the penalties against illegal lotteries and other games of chance. The JPS, according to Britton, is losing around CRC600 million (US$981,000) a year from these operations.

Britton told local media that the JPS is going to crack down on illegal lotteries and hold their operators accountable. They have no license and don’t comply with regulations. In addition, they don’t provide any revenue to help social welfare organizations like the JPS-led options.

Legislators have shown their support for the bill, even though they haven’t shown the ability to quickly act on it. When and if it’s approved, it would establish fines and prison sentences for those who benefit from this type of business. That could take a while, as it has already been on the table for over two years.

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