Panama began offering internet gaming licenses to interested operators under their jurisdiction since October 2002. The Online Gaming Act allows gaming companies registered within or hosted inside of Panama for international wagering to take place online in USD currency, so online gaming companies are not subject to foreign exchange control.
This Central American country offers Internet gambling licenses with very low fees, nontaxable profits and limited regulations, allowing for big and small casinos to invest in their country. The initial licensing fee is USD 40,000, with an additional USD 20,000 per year after that.
Casinos, horse racing, pari-mutuel and bingo houses are all allowed within Panama. Because gambling and casinos have been a big part in Panamanian culture, the country host legal gambling in the form of 36 gambling houses available to the public.
Panama offers licenses for all types of licensing activities, including online sportsbooks, online casinos, poker rooms and many others. The process to obtain each type of license is basically the same, allowing online gambling operators who offer different types of wagering options to obtain a license much more easily in Panama than in other jurisdictions around the world.
In order to get a license, applicants only need to state their business and provide a simple overview of their operations and what they intend to accomplish once they have a license. If the application gets approved, operators only need to pay the initial fee mentioned above in order to get the license for a seven-year period.
Thanks to the way that the Panama law is worded, casinos and other gaming sites based in Panama do not need to pay taxes on profits, as opposed to other jurisdictions around the world that require businesses to pay much larger fees and taxes. The jurisdiction includes a 30% corporation tax rate.
Additionally, internet businesses are exempt from import fees on all machinery, equipment, furniture, vehicles and other materials necessary for carry out the projects. Dividends and interest on securities issued by online casino operators and traded in local or international markets are also exempt from any national direct tax.
As long as the casino, sports book or other gambling operator continue to pay their annual fee, the licensing committee will not regularly audit their licenses and will only investigate them in the event of suspected money laundering activity. Companies are required, though, to keep a complete record of all gaming transactions for officials of the Panamanian Government to inspect.
Panama is known for having little control over their licenses, which do not guarantee fair software or reasonable payout times for their bettors. If a dispute between a bettor and the Panama-licensed casino should happen, the Panama licensing jurisdiction will not intervene to find a resolution. Fortunately, most disputes are solved between the casino and the consumer by contacting the site’s customer support service or by using third-party affiliates to assist in communication.
Panama is a great destination for online gaming operators for almost two decades, thanks to their modern infrastructure and to the support from the government to allow companies to set up their business within the country.