In a landmark move, twelve online casino operators in Curaçao have accepted an out-of-court settlement for failing to properly verify the identities of their players, a critical violation under the island’s legal framework. This marks the first instance in which the Curaçao gambling industry has been held accountable for non-compliance with identity verification regulations. The Public Prosecutor’s Office (PPO), overseeing this case, found that these operators did not adhere to mandatory Know Your Customer (KYC) procedures, which are essential to preventing illegal activities such as fraud, money laundering, and gambling by minors.

The investigation process:

The settlement follows an extensive investigation, dubbed Operation Nebraska, which scrutinized seventeen gambling websites. This operation was initiated after media reports and criminal complaints were filed by the Foundation for Representation of Victims of Online Gaming. These complaints prompted the Special Police Taskforce (RST) to dive deeper into the activities of the online casinos under the PPO’s Central Team.

As reported by Openbaar Ministerie Sint Maarten, the probe revealed that several of these casinos allowed players to open accounts and deposit funds without verifying their identities, violating Curaçao’s legal requirements. The lack of KYC checks is particularly alarming because such measures are designed to protect against a variety of criminal activities, including identity fraud, money laundering, and underage gambling.

KYC procedures are designed to ensure that online casinos know the identities of their users before entering into business relationships with them. This safeguard is a part of the broader anti-money laundering (AML) measures that are critical for preventing online gambling from being misused for illicit purposes. The PPO’s settlement emphasizes the importance of these procedures, not just for regulatory compliance, but also for safeguarding vulnerable players from gambling-related harm.

However, despite the legal obligation, the investigation found that identity verification was either inconsistent or entirely bypassed in some cases. This non-compliance had significant legal repercussions, resulting in fines and the cancellation of the settlement for one operator that failed to meet its financial obligations.

The settlement terms:

Under the terms of the settlement, eleven of the twelve operators agreed to pay a fine of 22,500 Caribbean Guilders (approximately €10,650.80) for each casino they operated. The total fines amounted to 360,000 Guilders (€170,412.80). Despite the legal entities accepting the settlement offer, none of the operators admitted guilt or accepted the factual findings of the investigation. This out-of-court settlement is viewed as a practical solution, as the PPO anticipates that any conviction in criminal court would likely result in fines rather than other penalties, given that the suspects are legal entities.

One operator, however, did not pay its fine, leading to the cancellation of its settlement agreement. The PPO has now decided to pursue legal action in court against this entity, which will face prosecution for failing to comply with the settlement terms.

This enforcement action comes as Curaçao’s online gambling sector faces increasing international pressure. For years, the jurisdiction has been criticized for weak regulatory oversight and insufficient consumer protection measures. However, in response to mounting scrutiny, Curaçao recently reformed its gambling regulations, aiming to bring local operators in line with global standards. These regulatory changes were a significant step toward strengthening oversight, yet challenges remain as a number of operators continue to work under foreign licenses, which the Curaçao Gaming Authority (CGA) now deems illegal.

The PPO’s action is part of a broader trend where jurisdictions are intensifying their focus on KYC compliance and anti-money laundering protocols in online gambling. This case also highlights the growing recognition of the role of technology in combating fraud and ensuring compliance. Solutions such as biometric verification and other advanced identity-checking methods are becoming increasingly essential for the industry.