VisorMan
08-19-2003, 12:50 PM
WHAT'S UP WITH COSTA RICA? 08/19/03 - Stephen Nover
For six months now, we've been hearing reasons why Costa Rica may no longer continue to be the offshore sports betting capital.
The arguments range from a new bookmaker tax imposed by the Costa Rican government, to bad lifestyle environment, to complaints about the local banks not cooperating any longer.
There is even the perception Costa Rica is just a puppet of the U.S. government, ready to jump at whatever order Uncle Sam gives.
So will Costa Rica remain the focal point of operations for offshore bookmakers?
Yes it will, says Cole Turner, CEO of BoDog sports book in Costa Rica.
"If you look at all the pieces that have come out recently, you will see that nobody who is actually in Costa Rica is really coming out with any arguments for any jurisdictions better than Costa Rica," Turner said.
"What they all are arguing is that Costa Rica is not as good as it used to be, so they are really still comparing Costa Rica to itself."
Lately, Panama is drawing a lot of attention and interest as a potential offshore booking Mecca.
But, while Panama has lifestyle, banking and infrastructure advantages, Turner says most bookmakers aren't ready to leave Costa Rica.
"...The arguments for moving do not yet pass the reality test for a number of reasons," he said. "I suspect the main motivation for suggesting a move is to try to make the government in Costa Rica reevaluate its plans for imposing a tax on our industry. That means it's political in nature.
"The other group publicly arguing for moving out of Costa Rica all have a vested interest in other jurisdictions that would like to get a bigger share of the international sports betting industry.
"The hard reality is that business decisions have to be made primarily based on economics. And if you do the study entirely based on this, you will see that no operating sports book can currently afford to move anywhere.
"All of the original reasons why Costa Rica attracted this industry to begin with are still valid, and in some cases are improved. The ones still valid are decent lifestyle in the Central Valley of Costa Rica where San Jose is located, economically priced and well educated work force, decent infrastructure, very little regulation and a government that works well enough that it is predictable."
However, how good is the work force in Costa Rica and the telecommunications there? Turner said these areas have improved since he first arrived in Costa Rica during the mid-'90s, in part because locals have become better trained.
"Last year, we completely upgraded our bookmaking team by hiring one of the industries best," Turner said. "He brought with him three very talented Costa Rican's who had been working under him for five years.
"Additionally, this month we cut over to a clear channel fiber optic cable connection between us and North America for voice and data. We no longer have to use the much more expensive and less reliable Satellite system. Neither of these situations would have been available to us in the past."
There has been banking problems for bookmakers in Costa Rica brought about by pressure from the U.S., which is very much anti-Internet gaming.
"Other than the money we wire to pay bills locally, we don't do much banking in Costa Rica," Turner said. "We have everything set up to process and store money in Europe."
For instance, BoDog keeps segregated accounts with player balances in the Zurich branch of the largest private bank in Europe, Turner said. BoDog also set up its own direct bank transfer money payment system.
"You could have similar banking issues in any other country should a critical mass of our industry concentrate there," Turner said. "And you have to pay for a license everywhere else that is a realistic alternative to Costa Rica.
"It would cost us hundreds of thousands of dollars just to move to a new building. It may cost us millions if you factor in the potential for lost income from any glitches to move to another country. I can not see anyone risking millions only for an opportunity to have a huge amount of extra work to get essentially the same thing or worse."
Some remain skeptical and untrusting of the Costa Rican government. They believe the government is fickle and easily manipulated by the U.S.
They feel it wouldn't be inconceivable if the Costa Rican government raises taxes and fees every year on bookmaking operations trying to extort money under a legal guise.
Turner isn't in this thought camp.
"I see no evidence that the government of Costa Rica is fickle," he said. "They have a well established working democracy that publicly debates new laws before passing them and gives all interested parties opportunities to get your message out.
"...I have never seen one scrap of evidence that the government of Costa Rica is pushed around any more than the government of Canada gets pushed around. Sure it is happening, but so what, it happens everywhere.
"What is more important is how the government is handling it. Passing new laws to tax and manage our industry is a much more positive reaction from our industries' perspective than to just start kicking guys out of the country, which any country can easily do if they want.
"My lawyer is in regular contact with the branch of the local government that is responsible for issues related to sports books, and we know they are working on ways to clean the industry up more and finding new revenue sources for themselves in the process.
"This is not the actions of a government that is intent on killing the industry."
For six months now, we've been hearing reasons why Costa Rica may no longer continue to be the offshore sports betting capital.
The arguments range from a new bookmaker tax imposed by the Costa Rican government, to bad lifestyle environment, to complaints about the local banks not cooperating any longer.
There is even the perception Costa Rica is just a puppet of the U.S. government, ready to jump at whatever order Uncle Sam gives.
So will Costa Rica remain the focal point of operations for offshore bookmakers?
Yes it will, says Cole Turner, CEO of BoDog sports book in Costa Rica.
"If you look at all the pieces that have come out recently, you will see that nobody who is actually in Costa Rica is really coming out with any arguments for any jurisdictions better than Costa Rica," Turner said.
"What they all are arguing is that Costa Rica is not as good as it used to be, so they are really still comparing Costa Rica to itself."
Lately, Panama is drawing a lot of attention and interest as a potential offshore booking Mecca.
But, while Panama has lifestyle, banking and infrastructure advantages, Turner says most bookmakers aren't ready to leave Costa Rica.
"...The arguments for moving do not yet pass the reality test for a number of reasons," he said. "I suspect the main motivation for suggesting a move is to try to make the government in Costa Rica reevaluate its plans for imposing a tax on our industry. That means it's political in nature.
"The other group publicly arguing for moving out of Costa Rica all have a vested interest in other jurisdictions that would like to get a bigger share of the international sports betting industry.
"The hard reality is that business decisions have to be made primarily based on economics. And if you do the study entirely based on this, you will see that no operating sports book can currently afford to move anywhere.
"All of the original reasons why Costa Rica attracted this industry to begin with are still valid, and in some cases are improved. The ones still valid are decent lifestyle in the Central Valley of Costa Rica where San Jose is located, economically priced and well educated work force, decent infrastructure, very little regulation and a government that works well enough that it is predictable."
However, how good is the work force in Costa Rica and the telecommunications there? Turner said these areas have improved since he first arrived in Costa Rica during the mid-'90s, in part because locals have become better trained.
"Last year, we completely upgraded our bookmaking team by hiring one of the industries best," Turner said. "He brought with him three very talented Costa Rican's who had been working under him for five years.
"Additionally, this month we cut over to a clear channel fiber optic cable connection between us and North America for voice and data. We no longer have to use the much more expensive and less reliable Satellite system. Neither of these situations would have been available to us in the past."
There has been banking problems for bookmakers in Costa Rica brought about by pressure from the U.S., which is very much anti-Internet gaming.
"Other than the money we wire to pay bills locally, we don't do much banking in Costa Rica," Turner said. "We have everything set up to process and store money in Europe."
For instance, BoDog keeps segregated accounts with player balances in the Zurich branch of the largest private bank in Europe, Turner said. BoDog also set up its own direct bank transfer money payment system.
"You could have similar banking issues in any other country should a critical mass of our industry concentrate there," Turner said. "And you have to pay for a license everywhere else that is a realistic alternative to Costa Rica.
"It would cost us hundreds of thousands of dollars just to move to a new building. It may cost us millions if you factor in the potential for lost income from any glitches to move to another country. I can not see anyone risking millions only for an opportunity to have a huge amount of extra work to get essentially the same thing or worse."
Some remain skeptical and untrusting of the Costa Rican government. They believe the government is fickle and easily manipulated by the U.S.
They feel it wouldn't be inconceivable if the Costa Rican government raises taxes and fees every year on bookmaking operations trying to extort money under a legal guise.
Turner isn't in this thought camp.
"I see no evidence that the government of Costa Rica is fickle," he said. "They have a well established working democracy that publicly debates new laws before passing them and gives all interested parties opportunities to get your message out.
"...I have never seen one scrap of evidence that the government of Costa Rica is pushed around any more than the government of Canada gets pushed around. Sure it is happening, but so what, it happens everywhere.
"What is more important is how the government is handling it. Passing new laws to tax and manage our industry is a much more positive reaction from our industries' perspective than to just start kicking guys out of the country, which any country can easily do if they want.
"My lawyer is in regular contact with the branch of the local government that is responsible for issues related to sports books, and we know they are working on ways to clean the industry up more and finding new revenue sources for themselves in the process.
"This is not the actions of a government that is intent on killing the industry."