Overview of El Salvador’s Gambling Industry

Gambling was largely restricted in El Salvador until the 1990s, when the country began legalizing land-based casinos. The most significant regulatory shift occurred in 2021, when the government established a legal framework for online gambling and sports betting.

Today, gambling activities are overseen by the National Lottery of El Salvador (LNB), which regulates both land-based and online gaming. Instead of issuing traditional gambling licenses, as seen in other jurisdictions, businesses in El Salvador must obtain an official permit from the LNB.

With a pro-business government and policies that promote foreign investment, El Salvador is becoming a competitive jurisdiction for gambling operators.

Advantages of an El Salvador Gambling License

Acquiring a gambling license in El Salvador provides operators with several key benefits:

1. Legalization of Cryptocurrency Transactions

El Salvador was the first country in the world to recognize Bitcoin as legal tender. This allows gambling operators to accept cryptocurrency payments freely and conduct transactions in Bitcoin without additional taxation.

2. Competitive Tax Structure

El Salvador offers one of the most favorable tax environments in Latin America:

• VAT: 13%
• Dividend tax: 10%
• No income tax for non-residents

These low tax rates make the jurisdiction attractive to international operators.

3. Fast and Simple Company Registration

Establishing a business in El Salvador takes approximately two to four weeks, significantly faster than in many other gambling jurisdictions. The minimum share capital requirements are:

• $2,000 for an LLC
• $10,000 for a corporation

4. Business-Friendly Policies

• No physical presence required
• No mandatory server location within El Salvador
• Full foreign ownership permitted

5. Global Market Access

An El Salvador gambling license allows operators to offer services worldwide, except in jurisdictions with strict regulatory restrictions, such as the United States and the United Kingdom.

6. Versatile Licensing

Unlike many other jurisdictions that require separate licenses for B2B and B2C operations, El Salvador provides a single permit covering both business models.

Disadvantages of an El Salvador Gambling License

Despite its benefits, there are several potential challenges to consider:

1. Developing Regulatory Framework

El Salvador’s gambling regulations are relatively new, which may lead to uncertainties and potential legislative changes.

2. Cryptocurrency Volatility

While Bitcoin transactions are an advantage, cryptocurrency’s price volatility can pose financial risks for operators relying heavily on digital assets.

3. Political and Economic Instability

The political climate in El Salvador can be unpredictable, creating risks for long-term business planning.

4. Limited Reputation of the License

El Salvador’s gambling license does not yet have the same level of international recognition as licenses from Malta, Curacao, or the UK, which could impact partnerships and customer trust.