On Wednesday, lawmakers in Timor-Leste approved a resolution to shut down the fledgling iGaming industry and rescind all licences. According to Portuguese news agency Lusa, they cited concerns about national security, social stability and economic integrity.
The decision followed an August raid in the special administrative region of Oecusse-Ambeno. The police action uncovered telltale signs of scam operations, including SIM cards and Starlink satellite devices. On 11 September, the United Nations Office on Drugs and Crime (UNDOC) followed with an Organised Crime Threat Alert, warning of transnational crime gangs at work in the region.
As a digital free-trade zone, Oecusse-Ambeno was a natural target for syndicates, UNDOC stated. “Convicted cybercriminals, offshore gambling operators and triad-linked networks” target special economic zones. Chased from major markets like the Philippines, they are “strategically shifting their focus to jurisdictions less prepared to counter such challenges.
“This trend underscores the resilience and adaptability of the scam centre industry” and the threat posed for emerging economies, according to the report.
In search of an economic lifeline
Timor-Leste is a young nation and one of the world’s poorest. Seeking more industry and foreign investment, its government rejected land-based casinos but approved online gaming.
“I don’t want some poor Timorese to lose everything in gambling with all the human, sometimes tragic consequences.” said President José Ramos-Horta in 2024. “But if foreigners want to gamble online and Timor offers an online gambling possibility, fine.”
The Virtual Gaming Association of Timor-Leste pledged to uphold “best practices in online gambling regulation and licencing”. VGA Chairman Richard Leather extended an invitation to “responsible operators and suppliers looking for a serious, safe and secure jurisdiction”.
Regulation was to be modelled on frameworks established in Malta and the Isle of Man.
Philippines warned of POGO-like scams
But the Philippines cautioned against the move. In a state visit last October, Justice Secretary Jesus Crispin Remulla warned that crime-ridden Philippine Offshore Gaming Operations could relocate to Timor-Leste, at the southernmost tip of the Malay Archipelago.
Remulla advised officials of “the potential socioeconomic and security challenges” associated with such providers. In July 2024, Philippine President Ferdinand Marcos Jr expelled POGO operations, many of which had served as fronts for online and crypto scams, money laundering and human trafficking.
But Timor-Leste pressed forward and, in April, it awarded its first licence to Golden River Universe. At the time, Flexi News called the development “a pivotal step in the country’s ongoing efforts to diversify its economy and strengthen its footprint in the digital innovation space”.
“This project is particularly important for Timor-Leste, a country in need of more job opportunities for young people, and where around 70% of the total population is under 30 years old,” agreed Antonio Sampaio, of Capital Ventures Timor-Leste. “It showcases the importance of private-sector initiatives.”
Pending ASEAN membership may help
In 2011, in hopes of stoking economic development, Timor-Leste applied for membership in the Association of Southeast Asian Nations (ASEAN). This month, it will finally join the influential body, which strives to integrate regional markets and “leave no one behind”.
That makes the iGaming ban well-timed, according to UNDOC. “As Timor-Leste prepares to join ASEAN, safeguarding its economic and digital systems against infiltration by organised crime will be critical to protect the security and prosperity of it citizens and people across the ASEAN region.”
The pending resolution revokes existing licences and closes the door on future online gambling ventures.
Lawmakers in the Southeast Asian nation of Timor-Leste vote to shut down online casinos following August police raid.