Just six months after granting its first license for offshore online gambling, East Timor has abruptly shut down the industry, citing mounting concerns over national security, criminal infiltration, and threats to its international standing.

The government announced on Wednesday that all existing licenses for online betting and gaming have been revoked. In addition, all pending applications and future approvals have been suspended indefinitely. The resolution, introduced by Minister for Cabinet Affairs Agio Pereira and adopted by the Council of Ministers, places enforcement responsibility in the hands of Pereira and the country’s security services.

UN Report Links Oecussi to Criminal Networks

The sudden reversal comes in the wake of warnings from the United Nations Office on Drugs and Crime (UNODC), which reported evidence of transnational crime operating within East Timor’s enclave of Oecussi, located on the Indonesian side of the island.

On 11 September, the UNODC flagged the growing influence of international scam and gambling syndicates in Oecussi. Recent investigations uncovered illegal betting and online fraud schemes in the region, leading to the arrest of 10 individuals.

The report suggested that Oecussi may be developing into a regional hub for organized digital crime, drawing comparisons to illicit gambling operations in Cambodia, Laos, Malaysia, the Philippines, and Macau. According to the UN agency, profits from these activities are often laundered through seemingly legitimate local businesses, including those with ties to political figures. One case cited involves a hotel in Oecussi allegedly serving as a base for criminal enterprises, with part ownership attributed to a government official.

Rising Risks for a Nation Seeking ASEAN Membership

The UNODC’s findings highlight broader vulnerabilities as East Timor moves toward formal membership in the Association of Southeast Asian Nations (ASEAN) this October. Oecussi’s Oecusse Digital Centre (ODC) free trade zone was identified as a weak point, where regulatory loopholes appear to have been exploited by organized crime networks posing as legitimate investors.

Concerns extend beyond financial crimes. The UNODC report, cited by LUSA, also referenced links between illicit activity in East Timor and the 14K Triad, including former Macau crime figure Wan Kuok-koi, known as “Broken Tooth.” His history of involvement in illegal gambling and money laundering across Southeast Asia has raised alarms about the potential spread of similar operations in Timor-Leste.

From Ambition to Reversal in Six Months

East Timor’s foray into the online gaming industry began in April 2025, when the government issued its first offshore license to Golden River Universe (GRU), a subsidiary of Grand Dragon Lotaria (GD Lotto). The move came after more than eight months of collaboration with the newly established Inspectorate General of Gaming (IGJ). GRU had presented its investment as an opportunity to transform the country into a credible digital gambling hub. GD Lotto had even prepared to relocate parts of its operations from Cambodia and the Philippines to East Timor.

At the time, President José Ramos-Horta had voiced support for licensing online gambling targeted at international players, while making clear that his government opposed the establishment of land-based casinos within the country.

That optimism was short-lived. The new resolution cancels not only GRU’s license but also the entire framework for future permits, effectively dismantling East Timor’s emerging online gambling sector before it could gain momentum. The government’s decision marks a dramatic shift for one of Southeast Asia’s youngest nations, cutting short an industry that only months ago was seen as a potential source of foreign investment and economic growth.