Gambling and online casinos in Palau

Palau is a small Pacific nation of more than 300 islands and is known for its stable economy, tourism and innovative approach to digital technology.

Although gambling in the country is not officially legalized, Palau authorities are gradually showing interest in creating a regulated environment for online gambling, especially in the context of the development of digital services and cryptocurrency solutions.

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Historical context

Palau has long maintained a strict stance on gambling.

After gaining independence from the United States in 1994, the country adopted

The Constitution and the Criminal Code, where there was no direct permission for gambling activities.

Attempts to legalize casinos have been made several times:

• in 2003 and 2012, projects to create resort casinos for tourists were discussed, but under pressure from the public and religious organizations, the government abandoned the idea.

However, since 2018, the situation has begun to change:

• Palau authorities began to consider online gambling and fintech licensing as a possible source of income for the budget and a tool for digital integration with Asia.

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Legislation and regulation

At the moment, there is no law in Palau that allows gambling.

However, there is no complete ban on the participation of citizens in international online games.

Key provisions of the legislation:

• There is no Gaming Act - no casino or bookmaker licenses are issued;
• participation of citizens in offshore online casinos is not punished;
• gambling advertising is limited but not separately regulated;
• all disputes and violations are considered within the framework of the Criminal Code of Palau (2015).

Government bodies such as the Ministry of Justice and the Financial Institutions Commission oversee financial flows but do not regulate gambling directly.

Palau is therefore in a "no man's land" -

where gambling is not legalized, but also not prohibited, and participation in offshore online casinos remains at the discretion of citizens.

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Online gambling and offshore platforms

Due to the lack of local licenses, Palau residents use foreign sites for gambling.

These are primarily international and crypto casinos offering anonymous deposits and instant payments.

Popular destinations:

• slots and live games;
• sports betting (especially American leagues and esports);
• poker and dealer games;
• crypto gambling using Bitcoin and USDT.

Popular platforms:

• Stake. com
• BC. Game
• Bet365
• 1xBet
• 22Bet
• Fairspin. io

Ways to pay:

• bank cards (Visa, MasterCard);
• international payment systems (Skrill, AstroPay);
• cryptocurrencies (Bitcoin, Ethereum, Tether, Tron).

According to the Pacific iGaming Report 2024, about 12% of Palau's Internet users regularly visit offshore casino sites, and the volume of unlicensed online bets is estimated at $8-10 million per year.

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Economic context

Gambling does not yet affect the economy of Palau, but the country's authorities are showing increasing interest in offshore licensing of online gambling.

Palau has a favorable geographical position between Asia and Oceania, which makes it an attractive jurisdiction for international companies.

Development potential:

• introduction of Palau eGaming License for online operators;
• taxation according to the Vanuatu and Curaçao model (3-5% of income);
• creation of a digital offshore focused on crypto gambling.

Experts believe that the legalization of online gambling can bring up to $10 million in tax revenues per year, which is comparable to income from tourism and fishing.

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Social and cultural context

Palau is a country with Christian traditions, so public attitudes towards gambling remain restrained.

Many residents consider gambling "foreign entertainment," but the younger generation is increasingly playing online -

especially in crypto casinos, where registration and verification are not required.

The government also emphasizes that with the legalization of eGaming, restrictions on the age and protection of players will be introduced to avoid the growth of addiction.

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Digital economy and cryptocurrencies

Palau is actively developing digital transformation and gambling is seen as part of this course.

Since 2022, the Digital Residency Program has been operating, which allows foreigners to obtain Palau e-citizenship for business, including fintech and online gambling.

Key steps:

• the launch of the national digital currency Palau Stablecoin (PSC) in 2023;
• partnership with Ripple (XRP) to implement blockchain infrastructure;
• discussion of creating an eGaming Sandbox for crypto operators.

This makes Palau a potentially new crypto-gambling licensing centre, able to compete with Malta, Vanuatu and Curaçao.

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Prospects

Palau is gradually forming a digital regulatory strategy, and online gambling could become one of the key industries of this model.

Possible steps until 2030:

• the adoption of the Palau Interactive Gaming Act;
• the establishment of the Palau eGaming Authority;
• issuing international licenses for online operators;
• integration of licenses with the digital residency system;
• tax incentives for crypto companies.

Forecast:

• with the legalization of online gambling and crypto games, the Palau market can reach $50 million per year of turnover, becoming one of the leading "digital offshore" of the region.

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Palau is a small country with big digital ambitions.

Although gambling is not yet officially allowed, the government sees online gambling as part of a future strategy for the e-economy.