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Timor-Leste urgently needs investment in sustainable sectors to reduce dependency on oil revenues and the Petroleum Fund. Fundasaun Mahein (FM) understands that political leaders are exploring various options to attract foreign capital to stimulate economic growth, diversify the economy and create employment opportunities. FM supports these goals, and we have continuously advocated for investments in sectors which can generate long-term benefits for Timorese communities, such as sustainable agriculture and fisheries, and community-based and eco-tourism.
However, recent developments regarding proposed foreign investments in offshore gambling and casino facilities have raised serious concerns among some observers. The following article analyses this important issue, first by documenting the latest developments regarding the offshore gambling and casino sector, including actions by the Timor-Leste Government and announcements by private sector actors. The article then analyses some of the risks related to this sector, with reference to debates and controversies surrounding similar developments across the Asia-Pacific region. By shedding light on this critical issue, FM hopes to stimulate public debate and alert policymakers to the need for increased scrutiny of this issue.
Recent Developments Related to Offshore Gambling in Timor-Leste
For several years, discussions have been circulating among key political leaders and private sector actors about transforming Timor-Leste into a host for offshore gambling operations (iGaming). While President Ramos Horta has expressed support for foreign investments for offshore gambling targeting foreign markets, he has opposed the expansion of gambling facilities which would target Timorese citizens.
While these discussions initially appeared to be speculative, recent events indicate that the Government and private investors are moving forward with concrete steps, such as:
- Creation of the Inspectorate General of Gaming (IGJ) and Oecusse Digital Centre (ODC) in late 2024, including its designation as a Free Trade Zone with its own “Oecusse Digital Zone Token” – a blockchain-based utility and payment system.
- Issuance of the first iGaming licence to Golden River Universe (GRU) – a subsidiary of Grand Dragon Lotaria. The company has stated that it will act as a “master operator” which can grant sub-licences to other iGaming companies to operate in Timor-Leste.
- Development of “Timor Offshore Gaming Operational Standards” (TOGOS) by GRU to organise operations in the iGaming sector.
- Establishment of the Virtual Gaming Association of Timor-Leste (VGA) to lobby on behalf of the iGaming sector within the country.
- Singapore-based Asia-Pacific Strategic Investments (APSI) Ltd. announced plans in early 2025 to build a $60 million casino resort and a $20 million bank, reportedly in partnership with BNCTL.
- APSI has also reportedly been in talks with the government to manage the Oecusse and Suai airports, although a June 2025 announcement by the company suggests that these discussions have been discontinued.
- Another Singapore-based entity, the blockchain network “AB,” plans to develop a “blockchain-themed resort” in Timor-Leste under the umbrella of a Decentralised Autonomous Organisation (DAO) and the “AB Charity Foundation”.
Risks from Offshore Gambling are Well Documented
Debates on social media and occasional commentary by other political figures reflect rising unease with recent developments surrounding the iGaming and casino sector in Timor-Leste. This is largely due to the fact that the casino and gambling sector carries numerous well-documented risks.
First, gambling is already a major and growing problem in Timor-Leste. Many families suffer due to the financial strain, domestic disputes and the diversion of household resources which result from gambling addiction. Promoting this sector – even if it nominally targets foreign tourists – risks exacerbating these social ills.
Beyond the individual and social harms directly caused by gambling addiction, casinos and online gambling platforms are well known as conduits for organised criminal activities, including prostitution, human trafficking, fraud, cybercrime, drug trafficking and money laundering. Even in jurisdictions with robust regulatory capacity such as the U.S.A. or Malta, gambling hubs are strongly associated with illicit activity and “vice”. In developing countries with limited law enforcement capacity and more fragile institutions such as Cambodia, Laos and the Philippines, the problems associated with the growth of the gambling and casino sectors have caused significant controversy and backlash.
The proposed investments in Timor-Leste involve international gambling facilities enabled by blockchain technology and data centres, which necessitate the development of advanced digital infrastructure. While some may view the development of such infrastructure as an advantage, reports by international monitoring organisations such as UNODC and the Global Initiative Against Transnational Organised Crime have documented how offshore gambling operations are strongly associated with scam compounds, cyber-enabled fraud and money laundering operations across Southeast Asia and Asia-Pacific. As FM has written previously, Timor-Leste’s domestic capacity to detect and prevent sophisticated cybercrime and financial crime is still limited. This vulnerability increases the likelihood that offshore gambling operations in Timor-Leste could be used as a front for criminal activities.
Furthermore, there are significant political risks associated with the growth of the offshore gambling sector: for instance, turning Timor-Leste into a gambling hub may contribute to domestic corruption and harm the country’s image among international partners concerned with good governance, corruption, transparency and human rights. It may also deepen Timor-Leste’s entanglement in regional geopolitical competition, as some analysts claim that the offshore gambling sector reflects the growing influence of the People’s Republic of China in the region (even while the PRC has cracked down on offshore gambling operations involving its citizens in neighbouring countries).
Lessons from the ASEAN Region
In Laos, the “Golden Triangle Special Economic Zone” (GTSEZ) has become a notorious hub for criminal activities linked to Macau-Chinese businessman Zhao Wei. Despite promises of tourism and development, the GTSEZ now functions as a centre for illegal operations allegedly involving drug trafficking, human trafficking and large-scale money laundering.
Similarly, Sihanoukville in Cambodia saw a surge of investment in casinos and online gambling from 2016 to 2019. While marketed as economic development, the city quickly became a hub for crime and vice, with powerful criminal organizations controlling large swathes of the area. In 2020, Cambodia banned online gambling due to these abuses. Despite this, Sihanoukville has remained a major centre of illicit economic activity, and thus serves as a cautionary tale of how poorly regulated gambling investment can lead to social harm, criminality and loss of state sovereignty.
In July 2024, the Philippines banned so-called “POGOs” (Philippine Offshore Gaming Operators) due to widespread scandals related to criminal activities. A lack of government oversight and weak police enforcement allowed foreign criminal syndicates to use the gaming industry as a cover for various criminal enterprises. As a result, the sector became associated with serious crimes including money laundering, human trafficking and cyber fraud, leading to public outcry and growing concerns about national security.
Conclusion: Debate and Oversight of Proposed Casino Investments Urgently Needed
Foreign investment in a range of sectors is essential for Timor-Leste’s economic and social development. However, investments must serve the public interest, promote inclusive development and uphold human rights and good governance by protecting our people and institutions from exploitation. FM believes that the proposed investments in offshore gambling and casinos in Timor-Leste present significant risks, particularly to vulnerable communities and the country’s relationships with international partners.
We therefore call for the following:
- Increased Oversight by Parliament and Relevant Authorities. Deputies must scrutinise the legal, financial and political implications of initiatives such as the Oecusse Digital Centre and Free Trade Zone, the issuance of gaming licences and the establishment of new financial institutions tied to gambling operators.
- Increased Public Debate and Transparency. The public must be fully informed and given the opportunity to provide feedback on decisions that will have a significant impact on Timor-Leste’s future.
- Comprehensive Digital Services and Cybersecurity Law. The Government and National Parliament, in collaboration with sector experts and international partners, should prioritise the development and passage of a comprehensive Digital Services and Cybersecurity Law. Such legislation should establish clear rules for the regulation of digital infrastructure and services, enhance protections against cybercrime and financial fraud, and ensure strong oversight mechanisms to safeguard national interests, human rights, data protection and public safety.
- Investment in Regulatory and Policing Capacity. If the Government is committed to developing such high-risk sectors as offshore gambling, it cannot rely on the private sector to exercise oversight. Instead, the Government must develop institutional capacity for regulating this sector, as well as strengthening the capacity of domestic law enforcement and national security agencies to prevent and detect complex financial, cyber and other crimes.
- Investment in Inclusive, Sustainable Economic Sectors. We urge our leaders to direct investment toward sectors that promote long-term, sustainable, and community-driven development, rather than those which promise quick profits but risk significant social harm and criminality.
FM believes that political leaders must build an economy rooted in transparency, sustainability and inclusion of all our people, including the most vulnerable communities. We urge all Timorese citizens, civil society and political leaders to carefully consider the proposals to transform this country into an international gambling hub, so that we may avoid the mistakes made in other countries.
