Panama Casino License

Disadvantages of obtaining a Panama Gambling License

• Not all players are aware of what a Panamanian license is and what level of protection and regulation it has. Theoretically, it can reduce the flow of clients to the site. But if you work with clients, improve service and transparency, and additionally provide information about the license on the site - this issue can be solved.
• The regulator carefully monitors the gambling activities of companies and requires compliance with several rules. Without professional legal assistance, it can be difficult to run a business that will meet the legal requirements.
• Panama has a small domestic market; companies must realize that they must take certain steps to enter the international market to increase profits.
• In the past, the Panamanian government had problems with money laundering, which affected the reputation of the jurisdiction. Now these moments are controlled but are still "fresh in the memory" of many global players.

Requirements for obtaining a Panama Gaming License

• Register a legal entity in Panama and enter it in the Public Registry of Panama.
• Have at least one shareholder and three directors (nominee directors may be appointed).
• Establish a physical presence in Panama, such as an office or call center.
• Pay a $50,000 license fee, $500,000 compliance guarantee, and $100,000 winnings guarantee.
• Provide monthly financial statements including deposits, wagers, and player account balances.
• Comply with AML/KYC standards, data protection, and fair play policies.
• Comply with regulatory requirements, including anti-money laundering measures, protection of minors, and responsible gambling.
• The majority shareholder or president of the company must have at least 5 years of experience in the gambling industry.
• Provide a certificate of no criminal record and proof of funding sources.
• The use of international servers is allowed, but their location must be declared to the regulator.
• The license covers both B2C and B2B activities, without the need for separate permits.

Overview of Gambling license in Panama

Panama Gambling Laws

Panama's first gaming regulation law No. 2 was passed in 1998, which legalized gambling enterprises in the country, regulated the issuance of licenses, and defined the powers of the Junta de Control de Juegos regulator.

Despite the amendments, the government decided to establish new legislation. Online gaming is regulated by Decree-Law No. 2 of 1998 and the Gaming Control Board’s Resolution No. 65 of 2002 on internet gaming, as amended by Resolution No. 11 of 2020. The resolution is aimed at the development of gaming activities, as companies working with residents of Panama or residents of other countries.

Main provisions of the legislation:

• Compulsory licensing

Operators must obtain a Panama iGaming License, which allows B2C and B2B activities without restrictions on types of gambling. License holders can offer online casinos, sports betting, poker, roulette, slot machines, and others.

• Presence in Panama

To obtain a permit, you must register a company in Panama and have a local presence, such as an office or call center.

• Financial transparency

Companies are required to pay government fees, file annual financial statements, ensure cash flow transparency, and prevent fraud.

• Protection of players' interests

Operations are subject to strict regulations, including age restrictions (under 18 years of age gambling is prohibited), mandatory risk communication and responsible gambling programs.

• Compliance and crime control

Licensees must comply with Act No. 23 of 2015 aimed at combating money laundering (AML), terrorist financing (FT) and illegal financial activities. Companies are required to identify customers (KYC), track transactions and report to the JCJ.

• Regular audits

JCJ's Audit Department conducts scheduled and unscheduled audits, assessing gaming operators' activities, accounting records, and compliance with legal requirements. If violations are found, companies are required to make adjustments to their operations.

• Use of servers and cryptocurrencies

Local servers are not required, but official documentation of the location of the servers must be provided. The use of cryptocurrencies is not prohibited, but all accounting and tax calculations are done in U.S. dollars. In addition, operators can link cryptocurrency wallets to bank accounts if the bank allows it.

Taxation

Companies with a gaming license in Panama are subject to a 10% tax on gross gaming revenue (GGR). This tax is calculated monthly and must be paid in the first 10 days of the following month. At the same time, companies are required to submit a report to the regulator containing details of:

• the sum of all player deposits,
• the total amount of bets,
• the balance of funds on users' accounts.

In addition, the following tax rates apply when distributing profits:

• 10% - on dividends received from income within Panama (20% if the company's shares are issued to bearer),
• 5% on dividends distributed from income earned outside Panama or from export operations.

Companies operating outside Panama are exempt from corporate income tax if the income is not related to the economy of the country. However, all operators are required to maintain transparent accounting and comply with PANAMA GAAP or US GAAP financial standards, providing regular reporting to the regulator.