Curaçao’s LOK Reform: From Licensing Jurisdiction to Regulatory Jurisdiction

CHARTING THE JOURNEY OF OUR SECOND INTERNATIONAL GAMING HUB TO MATCH INTERNATIONAL REGULATORY STANDARDS WHILE REMAINING OPEN AND ACCESSIBLE

Curaçao’s National Ordinance on Games of Chance (Landsverordening op de Kansspelen or “LOK”), which came into force on 24 December 2024[1], represents the most significant transformation of the jurisdiction’s gaming framework since the emergence of its online gaming sector in the 1990s. It is a significant milestone in the island’s journey from a licensor of operators to a gambling regulator. The LOK abolished the NOOGH legislation, historically known for the master-sublicensing system, after a majority vote in parliament. This enactment established direct government licensing under the supervision of a new governing body, the Curaçao Gaming Authority (“CGA”), replacing the former Curaçao Gaming Control Board (“GCB”). The latter was formerly appointed as the regulatory body of the gaming sectors in Curaçao. The LOK, established a law that expanded regulatory oversight, strengthened anti-money laundering (“AML”) obligations and introduced new requirements relating to governance, substance and player protection, directly on the operators.

From a legal perspective, the reform is substantial. Yet legislation alone does not transform a regulatory jurisdiction. The more interesting question is how Curaçao’s regulatory regime is advancing to combine its long-standing role as a licensing jurisdiction with an increasingly comprehensive supervisory framework that inspires confidence across the global gaming ecosystem. This article examines that evolution, which has occupied the regulatory end of that spectrum for over two decades, and considers what it means when set against comparable international licensing jurisdictions (e.g. Malta and Isle of Man).

For many years, Curaçao occupied a distinctive position within the global gaming ecosystem. It was often regarded as one of the most accessible gateways into regulated online gaming. The jurisdiction attracted entrepreneurs, start-ups and international operators seeking a practical route into global markets.

The LOK represents a modernization of Curaçao’s regime, with the attempt to further align its position with international markets, while preserving Curaçao’s commercial attractiveness.

Why change became necessary

Any assessment of the LOK must begin with an understanding of why reform became unavoidable.

For almost three decades, Curaçao’s online gaming industry was regulated indirectly by the government. A handful of license holders, otherwise known Master License Holders, had been granted a license by the government to operate games of chance under the NOOGH and established a global gaming industry in Curacao by issuing a sublicense to operators throughout the world. As the market expanded, a growing number of businesses came to operate under the Curaçao banner, making it one of the largest online gaming licensing jurisdictions globally.

The system delivered undeniable commercial success. It was relatively straightforward, comparatively affordable and capable of supporting rapid industry growth. Many businesses that later became major international operators began their journeys under a Curaçao license.

However, the regulatory weaknesses of the model gradually became more apparent as international standards regarding supervision, including AML compliance, beneficial ownership transparency, corporate governance and consumer protection, evolved significantly ove the past decade. Regulators across numerous sectors faced increasing pressure to demonstrate active supervision and effective enforcement. In gaming, the expectation increasingly became that regulators should know who their licensees are, understand their business models and intervene where risks arise. Yet under the old framework, direct engagement between regulator and operator was limited, a degree of separation that became increasingly difficult to justify in a modern compliance environment.

The LOK can therefore be understood as more than an exercise in modernizing legislation. It is a strategic response to a changing international environment, intended to protect the long-term viability of Curaçao’s established gaming industry.

A fundamental shift in regulatory philosophy

The abolition of the master license system has understandably attracted most of the attention surrounding the LOK. Yet the more significant change may not be structural at all, but philosophical.

At its core, the reform reflects a shift in how Curaçao views its role in the gaming industry. Historically, the jurisdiction was often perceived primarily as a place that issued licenses. Under the LOK, Curaçao is seeking to become a jurisdiction that actively regulates those license holders throughout their business lifecycle.

That distinction is important. A licensing jurisdiction can largely function as a gateway to market entry, focusing on the initial approval process. A regulatory jurisdiction, by contrast, maintains an ongoing relationship with its licensees[2]. It supervises compliance, monitors risks, gathers information, investigates potential breaches and takes enforcement action when necessary.

The LOK clearly embraces this more interventionist approach. The CGA is intended to act as an active supervisory authority aligned with international standards[3]. Licensees are expected to engage directly with the regulator, submit reports, and demonstrate ongoing compliance with their regulatory obligations. The introduction of supplier licensing further expands the regulator’s reach, while consumer protection and responsible gambling measures are embedded within the regulatory framework rather than being treated as matters of voluntary corporate responsibility.

In many respects, Curaçao is following a broader international trend. Across mature gaming jurisdictions, regulators have increasingly moved away from a model focused on formal compliance and towards one based on outcomes and effective risk management. Similar to a jurisdictions’ FATF standing, the mere existence of policies and procedures is not sufficient. Regulators expect operators to demonstrate the effectiveness of these responsibilities and processes.

Viewed in that context, the LOK is about far more than replacing the NOOGH regime. It represents an attempt to reposition Curaçao within the modern regulatory landscape and to signal that a Curaçao license should be associated not only with market access, but also with meaningful regulatory oversight[4].

What has changed for operators?

For operators, the LOK changes the nature of the relationship between gaming businesses and the regulator and, in doing so, alters many of the assumptions that historically underpinned the Curaçao licensing model.

For many operators, the most significant consequence is that regulatory engagement becomes an ongoing process rather than a one-time licensing exercise: operators must continuously demonstrate that they remain suitable license holders throughout the license lifecycle, rather than simply qualifying at the point of application. The new framework also demands considerably greater transparency into ownership structures, governance arrangements, sources of funding, key personnel and operational activities, which is a notable departure from historical perceptions of Curaçao as a jurisdiction defined primarily by accessibility.

The same applies to compliance obligations more generally. AML systems, customer due diligence procedures, transaction monitoring, risk assessments, reporting mechanisms and responsible gambling frameworks are no longer peripheral functions, but central operational requirements demanding dedicated resources, expertise and management attention, and the cost of compliance has increased accordingly.

For smaller operators and start-ups that historically selected Curaçao for its flexibility and relatively low barriers to entry, the new obligations may require a fundamental reassessment of their business models: compliance functions once outsourced, lightly resourced or viewed primarily as administrative necessities may now require a more significant investment. However, the LOK does have provisions that favor start-ups and smaller operators new to the industry, thus ensuring that Curacao remains open to all stakeholders.

The analysis is often very different for larger and more established operators. Many international groups already operate under multiple regulatory regimes and maintain sophisticated compliance, legal and governance infrastructures. For these operators, the reforms may not represent a dramatic increase in regulatory burden. Instead, they may be viewed as a welcome development that strengthens confidence in the jurisdiction itself, particularly since banks, payment service providers and institutional partners increasingly conduct their own due diligence before entering into commercial relationships.

In practice, the reform is likely to create a degree of market segmentation and consolidation. Operators today must actively diversify their regulatory exposure to protect their revenue streams, and respond efficiently to regulatory, political, or enforcement shifts. As such, the more important question is not whether certain operators will exit the market, but whether the industry appreciates the necessity for a modernized international license framework that is aligned with international standards.

Economic substance: one of the most significant changes

One of the most transformative aspects of the LOK is the intention for economic substance[5]. While direct licensing and enhanced supervision have attracted much of the industry’s attention, the intended introduction of meaningful substance requirements may ultimately have an even greater impact on how Curaçao is perceived internationally.

For many years, regulators, international organizations and financial institutions have expressed concerns about structures that allow businesses to obtain licenses in a jurisdiction while maintaining little or no meaningful connection to that jurisdiction. In such circumstances, the regulator may have legal authority over a licensee, but relatively limited practical ability to supervise its activities or hold key individuals accountable when problems arise.

The LOK represents a deliberate move away from that model. License holders are intended to be established under Curaçao law, maintain their statutory seat in Curaçao and demonstrate genuine local management arrangements and operational presence rather than merely a corporate registration. The rationale is straightforward: effective supervision becomes considerably more difficult when key decision-makers, operational functions and corporate records are scattered across multiple jurisdictions, and substance requirements seek to bridge that gap by bringing operators closer to the regulator.

Nevertheless, establishing and maintaining a meaningful presence in Curaçao requires investment. Local directors, office facilities, personnel and support functions all increase operational expenditure. Businesses that historically relied on highly decentralized corporate structures may need to reconsider aspects of their governance arrangements to meet evolving expectations.

There is also another side to the equation. While substance requirements involve investments, they also enhance the value of the license itself. A regulatory framework built upon genuine local presence and accountability is likely to inspire greater confidence among banks, payment service providers, software suppliers, investors and foreign regulators.

In practice, the introduction of substance requirements reflects a broader strategic decision by Curaçao to compete on more than speed, accessibility and cost. Economic substance has become an increasingly important feature of gaming regulation worldwide and is already embedded within many mature licensing jurisdictions. The ultimate question is whether the market will appreciate the additional investments as a burden or as an added value to participate in a more credible and sustainable regulatory environment.

The expanding role of suppliers

Historically, gaming regulation has focused primarily on B2C operators, because they interact directly with players and ultimately bear responsibility for compliance with licensing conditions. Increasingly, however, regulators have recognized that many of the most important risks within the gaming ecosystem originate much earlier in the chain. Software suppliers determine how games function, platform providers influence operational integrity, payment providers facilitate financial transactions, and technology vendors often control critical aspects of customer interactions, data management and compliance infrastructure.

The LOK reflects this evolving regulatory philosophy by introducing a licensing framework for suppliers of critical gaming-related goods and services established in Curaçao. Importantly, this obligation does not take effect immediately. The legislation provides a delay of entry for two years, meaning supplier licensing requirements are becoming effective at the end of 2026. This transitional period has given both the regulator and the industry time to prepare for an expansion of Curaçao’s regulatory framework, acknowledging that supplier supervision presents different challenges from operator supervision and will require careful preparation on both sides[6].

From a regulatory perspective, the introduction of supplier licensing addresses a longstanding gap in the oversight framework. Modern gaming businesses often rely on a complex network of third-party providers. Critical functions such as game development, platform management, sports betting infrastructure, payment processing, customer verification and data security are frequently outsourced. If those service providers remain entirely outside the regulatory perimeter, significant risks may arise that are difficult for regulators to monitor or control.

The practical implications for B2B suppliers could therefore be considerable. Companies that previously operated with little direct regulatory engagement may find themselves subject to reporting obligations and compliance expectations, somewhat similar to those imposed on operators. In particular, issues relating to ownership transparency, governance, AML controls and operational integrity are likely to receive increased scrutiny.

At the same time, supplier licensing may create important commercial advantages. A licensing framework may provide operators with greater confidence when selecting technology partners and thus will encourage more robust due diligence throughout the supply chain.

In the long term, the impact of supplier regulation may prove every bit as significant as the direct licensing of operators. If implemented effectively, it has the potential to improve transparency, strengthen market integrity, raise industry standards and contribute to the overall perception of Curaçao as a regulated gaming jurisdiction.

B2B providers outside Curaçao

An often-overlooked aspect of the new framework is that the LOK does not focus exclusively on suppliers established in Curaçao. While Curacao-based suppliers will ultimately be required to obtain a supplier license under the LOK, foreign suppliers offering such services to Curacao-based B2C license holders (Operators) are not entirely outside the regulatory perimeter.

Under the new regime, foreign B2B providers that offer critical gaming-related goods or services to Curaçao-licensed operators will be required to register online with the Curaçao Gaming Authority. This reflects the reality that many essential functions within the modern gaming industry are performed by businesses located outside the jurisdiction. Game studios, platform providers, sportsbook suppliers, KYC providers, payment technology companies and other specialized service providers frequently operate on a cross-border basis while supporting Curaçao-licensed operators.

The registration requirement serves several regulatory objectives. It provides the CGA with greater visibility over the wider ecosystem supporting licensed operators, enables the regulator to identify who is performing critical outsourced functions and reduces the risk that key operational components remain entirely outside the regulator’s field of view.

For foreign suppliers, registration is considerably less burdensome than full licensing. Nevertheless, it signals a clear shift in Curaçao’s regulatory philosophy. Rather than limiting oversight to entities physically established within the jurisdiction, the CGA is seeking greater transparency across the entire supply chain.

What will players notice?

Ultimately, the success of any gaming reform should not be measured solely by licensing procedures, compliance frameworks or regulatory architecture. It should also be measured by whether consumers experience a safer and more reliable gaming environment.

The LOK places far greater emphasis on player protection than Curaçao’s previous framewor[7]k. Consumer protection, responsible gambling and the prevention of gambling-related harm are now embedded within the regulatory framework, while the Curaçao Gaming Authority has also been granted enhanced supervisory and enforcement powers. Operators are expected to implement measures aimed at preventing underage gambling, identifying vulnerable players and promoting responsible gaming.

Whether players will immediately notice a difference, however, remains uncertain. Historically, criticism of Curaçao was often less about the absence of rules and more about concerns regarding enforcement and direct supervision. Complaints relating to delayed withdrawals, disputed account closures and difficulties obtaining meaningful regulatory intervention regularly raised questions about the effectiveness of the existing framework.

The transition to a direct licensing regime seeks to address these concerns. By establishing a direct relationship between the regulator and individual operators, the CGA is in a stronger position to supervise licensees, investigate complaints and take enforcement action where needed. Yet consumers are unlikely to judge the success of the LOK on legislative provisions. They will judge it on practical outcomes: are complaints handled efficiently and transparently, are operators sanctioned when misconduct occurs, and does a Curaçao license provide greater confidence that an operator is subject to genuine oversight?

The answers will emerge only over time. Regulatory confidence is built through consistent supervision and enforcement rather than legislation alone. If the CGA demonstrates a willingness to intervene where operators fail to meet their obligations, the reforms may gradually strengthen both consumer confidence and Curaçao’s broader reputation as a regulated gaming jurisdiction. For that reason, responsible gaming and player protection may ultimately prove the most important measures of whether the LOK has achieved its objectives.

Malta: the regulatory benchmark

Any discussion of where Curaçao is heading benefits from a point of comparison, and Malta offers the clearest one available in the European gaming sector. The Malta Gaming Authority (“MGA”) has operated a direct licensing model since the jurisdiction first opened its doors to remote gaming operators, without ever passing through a master license or sublicense structure. Operators hold a direct relationship with the regulator from day one, covering ownership disclosure, source of funds, key function holders and ongoing reporting obligations. That structure, built up over two decades and reinforced by Malta’s status as a European Union member state, is one of the reasons an MGA license is generally well regarded by banks, payment providers and institutional counterparties.

Malta’s experience is instructive for Curaçao in two respects. First, it demonstrates that a direct, supervisory model can coexist with a healthy, commercially attractive market; regulatory rigor and competitiveness are not mutually exclusive. Second, Malta’s own history is a reminder that regulatory credibility is not static: even a mature, long-established regime faced renewed scrutiny in 2021, when the Financial Action Task Force placed Malta under increased monitoring over anti-money laundering and beneficial-ownership shortcomings, and it took a year of demonstrated reform to be removed from that list. The lesson for Curaçao is less about reaching Malta’s starting point and more about the fact that credibility, once built, still has to be maintained. Curaçao is not attempting, and does not need, to replicate Malta’s model in every detail; the two jurisdictions serve different segments of the market and are likely to continue doing so.

What the LOK does is move Curaçao’s supervisory architecture conceptually closer to the Malta approach – direct licensing, ongoing obligations, substance and accountability – while retaining the commercial characteristics that have long distinguished it. For operators holding licenses in both jurisdictions, or weighing where next to expand, that convergence in philosophy, even without full convergence in practice, is one of the more significant long-term implications of the reform.

Has the reform been successful so far, and where does this leave Curaçao?

At present, the most honest answer is that it is too early to know. The legislative transformation itself is undeniable. Few jurisdictions have undertaken such a comprehensive restructuring of their online gaming framework in recent years.

Regulatory reform should ultimately be assessed against measurable outcomes rather than legislative ambition. Increased regulatory requirements may lead some operators to reconsider their licensing strategy. However, the number of operators that remain in Curaçao may be less important than the type of operators that remain.

One indicator of success will therefore be whether Curaçao succeeds in attracting and retaining operators that value regulatory certainty, sustainable banking relationships and long-term market acceptance. Equally important will be the response of external stakeholders. Banks, payment service providers, software suppliers and foreign regulators may ultimately have a greater influence on the perception of Curaçao than the legislation itself.

The introduction of the LOK suggests that Curaçao is seeking to evolve beyond its traditional reliance on accessibility, speed and cost. However, the objective does not appear to be transforming the jurisdiction into a direct competitor to Malta or the Isle of Man. Those jurisdictions have spent decades building regulatory reputations, supervisory capacity and international recognition. Regulatory standing on that scale is not created through legislation alone and is not achieved overnight.

Instead, Curaçao appears to be pursuing a more nuanced strategy: positioning itself between the traditional offshore model and the highly mature regulatory regimes, retaining the commercial advantages that have historically attracted operators, while introducing the oversight and accountability expected by banks, payment service providers, business partners and international stakeholders. There remains significant demand for jurisdictions that offer meaningful regulation without the complexity, cost and administrative burden of the most heavily regulated markets and Curaçao may be well positioned to serve operators seeking that balance. The challenge is that regulatory reform involves trade-offs. As compliance obligations, substance requirements and supervisory expectations increase, some operators may question whether Curaçao still offers sufficient advantages compared to alternative jurisdictions, and the success of the reform will depend on whether that burden is matched by tangible benefits such as stronger international recognition, improved banking relationships and greater confidence among commercial counterparties.

Ultimately, Curaçao’s future standing will depend less on the ambitions reflected in the LOK and more on its implementation. The legislation has provided the jurisdiction with the framework of a modern regulatory regime. Whether Curaçao succeeds in strengthening its position within the global gaming industry will depend on the consistency of supervision, the credibility of enforcement and the regulator’s ability to demonstrate that the new system delivers meaningful outcomes in practice.

Conclusion

The LOK is far more than a licensing reform. It represents a modernized strategy to align Curaçao with international standards required for the offering of these services in an increasingly scrutinized global gaming market.

Direct licensing, enhanced supervision, economic substance requirements, supplier regulation and strengthened responsible gaming and player protection obligations collectively demonstrate a clear shift away from a model focused primarily on accessibility and towards one centered on accountability and regulatory oversight.

For operators, suppliers and players alike, the practical effects of that transition will only become fully apparent over time. The legal foundations have now been laid. The question that remains is whether operators appreciate the necessity for a modern and international recognized licensing framework.

Cindy Drommond is Legal Director at EM Group