Costa Rica’s Online Sportsbook and Casino Laws as of 2018
While researching Costa Rica’s online gambling industry recently, it occurred to me that the country’s long history with online sports betting might seem nebulous to many gamblers. Costa Rica’s shorter history with online casinos and poker sites might be even more of a mystery.
Costa Rica is known as a haven for many online sportsbooks, casinos, and poker sites. Bookmaker Sports, BetCRIS, 5Dimes, and Heritage Sports are famous US-friendly online bookmakers which either are based in Costa Rica or were based there at one time.
The legality of online gambling in Costa Rica therefore might be confusing to some players. In fact, a recent article by a Costa Rican tourist site covered the subject and it seemed to confuse the matter somewhat. That is natural, because it took a government official to explain the law by analogy in 2016.
Costa Rican Land-Based Gambling
That article described Costa Rica as banning gambling. All games of chance are considered illegal, though that is not necessarily true. In fact, Costa Rica has 52 land-based casinos, including 19 brick-and-mortar casinos in San Jose alone. Most of these are inside hotels and resorts, such as Talamanca Hotel, Radisson Hotel, and several Fiesta Casino gaming operations inside hotels.
Costa Rica also has a national lottery, organized by Junta de Proteccion de San Jose. Beyond that, Costa Rica is home to over 300 online gambling sites, give or take a few at any given time.
Costa Rican Online Gambling
Despite that, online gambling is illegal in Costa Rica. That might be why the article writer for the Costa Rican tourism site believed gambling is illegal in their country. It is illegal for residents to gamble online. That’s why you’ll see sites like 5Dimes and Bookmaker Sports list Costa Rica as one of their few banned countries.
In many cases, players from most other countries are allowed to gamble from sites hosted in Costa Rica. Those sites agree not to sign up Costa Rican residents. Otherwise, they hire Costa Ricans to provide support and services, while paying taxes on their revenues. It makes sense.
CRIS and Ron Sacco
People might wonder how Costa Rica became an online gambling powerhouse. It actually began before online betting sites became widespread and mainstream. Ronald Sacco and the BetCRIS franchise is a big reason.
Ron “The Cigar” Sacco was one of the most famous handicappers in the United States in the 1980’s. Second in appearances only to Jimmy the Greek, Ron Sacco appeared on hundreds of TV shows as an expert sports bettor. That came to an end shortly after an ill-fated appearance on 60 Minutes, when the TV news/journalism show exposed his operation.
The Formation of BetCRIS
Sacco actually appeared on 60 Minutes and boasted of his skills. Combined with some investigative reporting that filled in the segment, Ron Sacco suddenly had a big target on his back. He was arrested by US authorities in 1994 and went to prison until 1998.
While Ron Sacco was in prison, the world changed. The Internet became a mainstream tool for US citizens. Online gambling became a favorite pastime for many Americans. Ron Sacco’s remaining crew joined with a man named Harry Craft, relocated to Costa Rica, and set up a successful international gambling operation called “Costa Rican International Sports” (CRIS).
By the time Sacco got out of prison, CRIS was a huge success. Over the next 4 years, it became the world’s most successful online sportsbook. Then Ron Sacco was extradited to the United States on an illegal passport charge in 2002. His highly-publicized 2003 trial proved to be free advertisement for BetCRIS.
2003 Ron Sacco Trial
At a time when online poker was exploding in popularity, massive numbers of Americans began to try their luck at online sports betting. While they were picking a site, US newspapers told the story of BetCRIS, which accepted huge sports bets and never missed a payment. The 2003 Ron Sacco trial became a huge windfall for BetCRIS.
Over the next few years, CRIS bought sites like Boomaker.com and paid out the players of other failed bookmaker sites. When the UIGEA was passed in 2006, it led to many online sportsbooks either selling out to BetCRIS or removing themselves to offshore online gambling havens. Costa Rica was the natural place to go.
Costa Rica: Online Gambling Haven
From 2007 to 2012, Costa Rica became a major hub for online gambling. One wave relocated to Costa Rica in 2007, to escape scrutiny due to the UIGEA. This included sites like 5Dimes and Bookmaker, along with software design companies like RealTime Gaming (RTG).
When the 2011 Black Friday scandal happened, more sites relocated to Costa Rica. Most of those were poker sites, but that led to the formation of new poker networks. Many online bookmakers launched their own card rooms. By that time, BetCRIS had relocated to Malta and catered to European sports bettors. Bookmaker Sports took all of BetCRIS’s American players and remained in Costa Rica.
2013 Costa Rica Gaming Control Board
Before 2013, online gaming operators paid a $5,000 permanent licensing fee, a $5,000 license renewal fee, and $500 additional yearly fee for legal costs. It was a sweet deal. In 2013, Costa Rica’s government suggested establishing a Costa Rica Gaming Control Board as part of the Finance Ministry.
The CRGCB would charge a $50,000 licensing fee, along with a 0.5% tax on revenues to pay for the control board. An additional 5% would be charged to help pay for enforcing crime. President Luis Guillermo Solis wanted to pass a gaming law, but it never came to pass. Therefore, a Costa Rica Online Gambling Company or Gaming Control Board never came into being.
Gambling exists in a gray area, though Costa Rica remains a safe haven for companies. An incident in 2016 is a good example of how online gambling works in Costa Rica.
5Dimes Sportsbook in 2016
In March 2016, the U.S. Justice Department asked the Costa Rican government to look into claims that 5Dimes Sportsbook and Casino was breaking US online gambling laws by signing up US residents. 5Dimes Sportsbook is one of the top US-friendly online bookmakers and it hosts its servers in Costa Rica, like many international gaming sites do.
Costa Rica’s Office of Money Laundering‘s Deputy Prosecutor, Dr. Alvaro Montoya, told the US officials he would not do that. Montoya was quoted by Costa Rican publication La Nacion saying that 5Dimes is not doing anything illegal under Costa Rican law. In fact, 5Dimes pays taxes to the Costa Rican government.
To illustrate his point, Dr. Montoya said that Costa Rica is “hardly going to tax someone who commits a crime.”
Alvaro Montoya on Online Gambling
Alvaro Montoya added that he would work with US authorities if they came to him with “concrete charges” and material evidence that 5Dimes was laundering money, or if it was helping others launder money through their site. Money laundering is illegal under Costa Rican law, so Montoya would punish wrongdoers for any such financial crimes. This would apply to a range of crimes, such as “laundering money from drug trafficking”.
At the same time, he would not aid US authorities when they came to him with charges made “in the abstract”. If US officials claimed 5Dimes “might be” laundering money, then that is an abstract or hypothetical crime. Like any law enforcement agency, the Office of Money Laundering has limited resources and would not look for hypothetical crimes.
Costa Rican Sovereignty
In short, Costa Rica punishes real crimes that occur inside Costa Rica, as any sovereign country does. Costa Rica does not enforce US laws inside Costa Rica, if Costa Rican law does not consider those activities to be a crime. It is a sovereignty issue. It goes without saying, but the United States would not enforce Costa Rican law in the US, either.