Legislation

Costa Rica – Tighter legislation needed as Costa Rican crash continues

By Phil - 22 January 2014

The casino industry in Costa Rica is showing continued signs of decline with operators complaining of a lack of regulation when it comes to illegal gambling and high tax rates.

Jorge Hidalgo, President of the Association of Costa Rican Casinos, said the industry has been struggling for 16 years due to a lack of regulatory framework when it comes to casinos.

Mr. Hidalgo said:  “For 16 years now we’ve been trying to regulate the industry. We’ve made progress on tax matters, we have had several meetings with the Treasury, but lack of control means that many operators are operating without paying anything while others are drowning.”

According to Mr. Hidalgo the industry has not been profitable for three years now and there have been a number of significant closures of late due to additional obstacles such as the smoking ban and taxes which have forced other larger operations to reduce their running costs. He also warned that a number of casinos are running at a loss and could soon close.

“There were four Casino Concordes running in Costa Rica but there is now only one and it has been forced to dramatically cut its number of staff,” he explained.  “From what I know already in the last few years two casinos have closed in Puntarenas, one in Jacó, another in Quepos,a few in Guanacaste and another in  Guápiles.”

Criticism has also come from Thunderbird the leading operator in Costa Rica which owns four Fiesta and four Lucky casinos. Thunderbird has been in Costa Rica for eight years. David Pirie, Director of Marketing for Thunderbird Costa Rica was quoted in the article as saying that while the market is still profitable profits have fallen slightly compared to three years ago. He also said that the main problem is illegal slot parlours which do not pay any tax.

“The authorities do not know which the serious and responsible operators are and which are the operators which operate on the margins of the law,” he said. “Worse still are those concealed under the guise of being innocent amusement arcades.”

In common with many other countries in the region casinos were first permitted in order to boost tourist infrastructure and were only allowed in hotels.  With around 50 casinos now operating nationwide the vast majority are located around the most well-known beaches with another handful located in the capital.

Unfortunately, casinos in Costa Rica have been consistently singled out for special attention from the Department of the Treasury and have been hit by a series of additional taxes and restrictions over the years. In 2011 the newly elected government of Laura Chinchilla promised to raise taxes once again in order to raise money in order to combat growing crime and taxes were once again raised in 2012 along with an additional yearly licence fee for operators.