Costa Rica Sanctions 10 Casinos ₡361.5 Million Over Unbilled Chips and Undeclared Tables

Costa Rica's Ministry of Finance says every casino it inspected in late September sold gaming chips without issuing electronic receipts, and some declared zero profit or zero VAT. The sanctions, worth about $780,000, test a casino tax regime built on counting tables in a country that still has no licensing framework for online gambling.

• Costa Rica's Ministry of Finance (Hacienda) has determined ₡361.5 million (approximately $780,000) in sanctions against 10 casinos in San José, Alajuela, Heredia and Puntarenas after inspections in late September
• According to the ministry, all 10 failed to issue electronic receipts when customers bought gaming chips, some had not declared all their gaming tables and games of chance to the tax administration, and others had declared zero profit for income tax or zero value added tax
• Deputy Minister of Revenue Víctor Julio Carvajal Porras said proceedings have begun to apply the sanctions and recover the unpaid tax, and that "en esta lucha no hay intocables" (in this fight there are no untouchables)
• The casinos were not named, and the ministry did not break the total down by casino or by type of breach
• Casinos pay a monthly tax under Law 9050 of 2012 on net income and on each authorised table and slot machine, while Costa Rica has no dedicated licensing regime for online gambling and its latest attempt to create one was rejected in committee in January

Inspectors Find Every Casino Selling Chips Without Receipts

The inspections were carried out at the end of September by the Directorate General of Taxation, the Directorate General of Customs and the Fiscal Control Police, as part of the government's National Strategy Against Smuggling and Tax Evasion, according to the ministry's statement of 1 October, which was published in full by Heredia Hoy. The 10 casinos are in four of the country's seven provinces: San José, Alajuela, Heredia and Puntarenas. The total of ₡361.5 million is equivalent to about $780,000 at the Central Bank of Costa Rica's reference rate of 2 October.

The Directorate General of Taxation found that all 10 casinos failed to provide electronic receipts (comprobantes electrónicos) for the purchase of gaming chips. Some had not declared to the tax administration the full number of tables and games of chance they operated. Others had filed returns showing zero profit for income tax purposes or zero VAT. Carvajal told Teletica that in some cases the casinos then applied tax credits that were carried forward or claimed back. The ministry did not say how many casinos fell into each category, how the total divides between unpaid tax and penalties, or how long the breaches had run.

"En esta lucha no hay intocables, nos comprometimos a enfrentar la evasión fiscal en todos los sectores y lo seguiremos haciendo" (In this fight there are no untouchables; we committed to confronting tax evasion in every sector and we will keep doing so), Carvajal said in the statement. The proceedings to apply the sanctions and recover "los impuestos que no pagaron" (the taxes they did not pay) have begun, he said. The figure is therefore a determination by the tax authority rather than a final, collected amount, and the casinos have not been identified.

A Tax Built on Tables and Machines

Costa Rica taxes casinos under Law 9050, the Law on the Tax on Casinos and Electronic Betting Call-Linking Companies, published in August 2012. Article 1 imposes three taxes, declared and paid together each month within 15 days: 10% of net income from operating a legally authorised casino, 60% of one base salary for each gaming table authorised by the Ministry of Public Security, and 10% of one base salary for each authorised slot machine. Article 2 sets a fine of ten base salaries for each table where prohibited or unauthorised games are played, and the same for each slot machine operating without authorisation, collected by the Ministry of Public Security. New casinos may only be authorised in hotels rated four stars or above, in an area no larger than 15% of the hotel. The proceeds are earmarked for prison infrastructure and police equipment.

The ministry did not say which taxes the undeclared tables affected. Under the law's structure, a table the tax administration does not know about is a table on which no monthly levy is paid, and if it was also unauthorised, it falls within the Ministry of Public Security's separate fine. Income tax and VAT sit on top of the Law 9050 taxes.

A Chip Sale Without a Receipt Leaves Nothing to Audit

The most telling finding is the one common to all 10 casinos. Electronic receipts give the tax administration a record of a business's sales against which to check its returns, and the purchase of chips is the point at which a casino's cash enters the business. A casino that sells chips without issuing receipts leaves no record against which a return can be checked, which is why the zero-profit and zero-VAT returns are the natural companion finding. That every inspected casino was doing it suggests a sector-wide practice rather than isolated lapses, and the ministry's response, sanctions and recovery rather than closures, treats it accordingly. The next test is whether the sanctions survive challenge, and whether chip sales are invoiced from now on.

Undercounting Tables Undercuts a Tax That Depends on Counting Them

Law 9050 deliberately taxes capacity as well as income, because capacity is easier to verify than a casino's net win. A per-table and per-machine levy only works if the state's count matches the floor, and the inspections found that for some casinos it did not. That may point to a gap between the agencies: the Ministry of Public Security authorises tables and machines, while Hacienda collects the tax on them. The finding is an argument for the two to share their registers, so that the authorised count and the taxed count are the same number.

Costa Rica Audits the Casinos It Can See, Not the Gambling It Cannot

The land-based sector is the visible part of the market. Online, Costa Rica has no dedicated licensing regime, and Law 9050 taxes companies that receive and process data for electronic bets by headcount, from 57 to 113 base salaries a year, rather than by what they take. In January the Legislative Assembly's security and drug trafficking committee rejected bill 25.057, which sought to strengthen state control of gambling, and in May deputy Esmeralda Britton filed bill 25.600 to make the state lottery, the Junta de Protección Social, the sole regulator of all gambling, according to Yogonet. The bill says the illegal market takes 53% of lottery and sports betting. Elsewhere in the region, the Dominican Republic has just passed a gambling law that taxes online operations at 10% a month, one of several markets on the regulatory map moving to license the online sector.

The inspection shows Hacienda can find what is on a casino floor. The harder question for Costa Rica is the gambling that never passes through one.