Costa Rica presents new bill to modernise gambling regulation and target illegal operators

Costa Rica is considering a new legislative initiative that would strengthen the powers of the Junta de Protección Social, introduce tighter controls over digital gambling platforms and create stronger tools against illegal betting and lottery structures.

Costa Rica has introduced a new bill aimed at modernising the country’s gambling framework and strengthening the state’s ability to combat illegal gaming structures. The proposal, filed as Expediente 25.600, was presented on May 21 and is formally titled the “Law for the Strengthening and Modernisation of the Powers of the Junta de Protección Social and Regulation of Games of Chance in the Framework of Security and the Fight against Organised Crime.”

The bill seeks to recognise and expand the exclusive role of the Junta de Protección Social in two separate areas: as a direct operator of lottery and betting products, and as the single regulatory, supervisory and enforcement authority for the broader games-of-chance sector. This would allow the JPS to authorise, supervise, inspect, sanction and revoke licences or equivalent operating permits for private operators.

A central part of the proposal is the fight against unauthorised digital platforms. The explanatory text says that illegal online lottery and betting operations reduce funds available for social programmes, weaken state supervision, increase technological fraud risks and make financial flows harder to trace. The bill cites JPS estimates that around 53% of Costa Rica’s lottery and betting market is currently in illegal hands, equivalent to about ₡297 billion per year.

The proposed framework would apply to physical and digital activities, including printed and electronic lotteries, betting, sports betting, video lotteries and other games of chance offered through platforms, mobile applications or computer networks. It would also cover foreign operators when their services are directed at the Costa Rican market, including through local advertising, Spanish-language services, access from Costa Rica without effective geoblocking or local references.

The bill includes several technology-focused controls. Authorised platforms would need to follow principles such as consumer protection, interoperability, information security, data protection, accessibility, transparency and technological neutrality. The proposal also refers to software audits, real-time transaction monitoring, certification of random-number systems and stronger controls over privileged system access.

Financial crime prevention is another major element. The draft provides for anti-money laundering and counter-terrorist-financing policies aligned with Costa Rica’s Law No. 8204 and FATF recommendations. It also proposes economic guarantees and capital reserves linked to the scale of authorised operators’ activity, with the goal of reducing contractual, financial and administrative risks.

The initiative would also restrict payment methods. Transactions linked to lotteries, betting, sports betting, video lotteries and other games of chance would need to be carried out in legal tender, while cryptoassets, virtual currencies and payment methods not regulated by the Central Bank of Costa Rica or the national banking system would generally be prohibited, except where expressly authorised for traceability and AML purposes.

The reform is important for Costa Rica because the current regulatory model has struggled to keep pace with digital betting and illegal online lottery products. If approved, the bill could give the JPS stronger tools to supervise the sector, protect social funding and reduce the role of unlicensed operators. The main challenge will be legislative approval and implementation, especially because the proposal gives the JPS both operational and regulatory functions, which will require clear separation to avoid conflicts of interest.