Timor-Leste, a young Southeast Asian nation that officially gained independence in 2002, is exploring new paths for economic development in its unique way. Facing a single economic structure heavily reliant on oil revenue, the Timor-Leste government has recently turned its attention to the online gambling industry, attempting to achieve economic diversification through this controversial yet lucrative sector.
Policy Background: From Oil Dependence to Economic Diversification
The economy of Timor-Leste has long been severely dependent on oil and natural gas revenues, making the country particularly vulnerable in the face of global energy price fluctuations. According to a World Bank report, Timor-Leste's long-term fiscal stability is facing risks of "high government spending and limited oil fund earnings." Although the country's oil fund had accumulated $17.41 billion by the end of 2022, experts warn that relying solely on this fund is insufficient to support sustainable national development.
In this context, the Timor-Leste government has begun actively exploring paths to economic diversification. In early 2024, Timor-Leste's President José Ramos-Horta explicitly expressed support for online gambling services targeting foreigners, while emphasizing discouragement of gambling activities among local citizens. "I do not want some poor Timorese to lose everything in gambling, which sometimes leads to tragic consequences," Ramos-Horta said in an interview with Macau media, "but if foreigners want to gamble online, and Timor-Leste provides this possibility, then there is no problem." This stance has laid the policy groundwork for the development of the offshore gambling industry in Timor-Leste.
It is worth noting that Timor-Leste had already passed Decree Law No. 6/2009 in 2009, providing a legal framework for various forms of gambling (including lotteries, cockfighting, and casino games). This law categorizes gambling within the legal economic domain, emphasizing the issuance of operating licenses through public and transparent bidding processes, while requiring the gambling industry to contribute to public fiscal revenues. This provides a legal basis for the current development of the online gambling industry.
Strategic Implementation: Ambition to Build "The Malta of Asia"
In April 2025, Timor-Leste took a crucial step in developing the online gambling industry by officially issuing the first offshore gambling operation license. This historic license was granted to Golden River Universe Lda (GRU), marking Timor-Leste's entry into the international gambling market. GRU is a subsidiary of the online lottery provider GD Lotto, whose parent company has obtained gambling licenses in multiple countries including Cambodia and Nigeria.
Under the agreement, GRU commits to investing $100 million over the next 10 years to establish "one of the best offshore gambling operation centers in Asia" in Timor-Leste. The company plans to relocate its research and development, customer service, and global support departments from Cambodia and the Philippines to Timor-Leste, expected to create numerous job opportunities and facilitate technology transfer.
GRU's CEO, Datuk Harry Ng, stated that this license "is not just a license, but a platform for national development, indicating that Timor-Leste is ready to participate in the global digital economy."
To regulate this emerging industry, Timor-Leste has established specialized regulatory bodies—the Timor-Leste Virtual Gambling Association (VGA) and the Gambling Supervision Directorate (IGJ)—responsible for developing regulatory frameworks that meet international standards. IGJ will work closely with operators to ensure that business operations comply with responsible gambling principles, digital transparency, and compliance requirements. This regulatory model draws on the experience of mature gambling jurisdictions like Malta, with Timor-Leste hoping to build an image of "The Malta of Asia"—a trustworthy center for offshore gambling, compliance, and digital innovation.
Geographically, Timor-Leste plans to establish an offshore gambling hub in its only special administrative region, Oecusse. GRU has signed a memorandum of understanding with the local government of Oecusse to transform a local hotel into a gambling operation center that can accommodate 1,000 foreign employees. Choosing Oecusse as the base for the gambling industry not only considers its policy flexibility as a special administrative region but also aims to drive economic development in this remote area through industrial growth.
Potential Benefits: Employment, Investment, and Digital Economy Development
The core appeal of developing the online gambling industry in Timor-Leste is to drive economic growth and create job opportunities through this emerging industry. As a young country with a high unemployment rate (approximately 60% of the population is under 25 years old), creating job opportunities is a primary task for the government. As a labor-intensive industry, the gambling sector can directly create various positions from customer service to IT development. GRU's commitment to relocating some of its operations from Cambodia and the Philippines to Timor-Leste is expected to bring hundreds of direct job opportunities.
In addition to direct employment, the gambling industry will also stimulate related industry development. The Timor-Leste government hopes that the investment by gambling operators will drive the construction of digital infrastructure and promote the development of supporting industries such as financial services and hotel tourism.
For example, alongside the gambling license, there are also projects for the construction of a five-star hotel and a bank—Singaporean developer Asia-Pacific Strategic Investments Ltd (APS) plans to invest $60 million to build a comprehensive resort including a casino, and $20 million to establish a bank. These projects will comprehensively enhance Timor-Leste's tourism reception capacity and financial service level.
From a fiscal revenue perspective, the online gambling industry is expected to bring substantial license fees, taxes, and other related revenues to the government. Although Timor-Leste has not yet announced specific tax policies, drawing on the experience of other offshore gambling centers, this revenue may include initial license fees, annual fees, and taxes based on turnover. For Timor-Leste, which heavily relies on oil fund revenues, this will be an important supplementary income channel.
It is worth noting that Timor-Leste specifically emphasizes that its online gambling business mainly targets foreign customers. This positioning not only avoids the negative impact of gambling on the local society but also attracts global capital through the "offshore" model. Dr. Joseph Borg, an iGaming industry expert, pointed out that Timor-Leste is likely to complement rather than compete with Malta, providing a gateway for Maltese operators to enter the Asian market. This international cooperation model may bring more European and Asian investment and technology to Timor-Leste.
Facing Challenges: Regulatory Capacity, Reputation Risks, and International Competition
Despite the promising outlook, the development of the online gambling industry in Timor-Leste still faces multiple challenges. The primary challenge is building regulatory capacity. As an emerging industry, Timor-Leste lacks experience and professional talent in regulating online gambling. Although VGA and IGJ have been established, these institutions need time to build authority and accumulate regulatory experience. Balancing commercial development with compliance regulation and preventing illegal activities such as money laundering will be a long-term test.
Reputation risk is another major concern. The gambling industry is still a sensitive industry in many countries, associated with negative images such as crime and money laundering. As a country led by Nobel Peace Prize laureate Ramos-Horta, Timor-Leste needs to be particularly vigilant about the potential damage to the national image caused by the gambling industry. The president himself is also aware of this risk, hence he explicitly stated his opposition to gambling activities targeting local citizens, only supporting offshore online gambling.
Fierce international competition should not be overlooked either. The Asian region already has mature gambling centers such as Macau, Singapore, and the Philippines, and countries like Cambodia and Laos are also actively developing their gambling industries. Compared to these competitors, Timor-Leste is at a clear disadvantage in terms of infrastructure, talent reserves, and service support. GRU's commitment to invest $100 million in building a gambling center is far less than the investment scale of similar projects in neighboring countries.
Additionally, geopolitical factors may affect the development of Timor-Leste's gambling industry. As a new member applying to join ASEAN, Timor-Leste needs to carefully handle relations with neighboring countries. Indonesia and Australia have cautious attitudes towards the gambling industry, and the development of the gambling industry in Timor-Leste may raise concerns among these major partners. Especially, online gambling may involve cross-border regulatory challenges, requiring strengthened cooperation with neighboring countries to avoid legal conflicts.
Future Outlook: Cautiously Optimistic Development Path
A comprehensive analysis shows that the strategy of developing the online gambling industry is an important component of Timor-Leste's exploration of economic diversification, with practical necessity and potential economic benefits. By focusing on offshore online gambling, Timor-Leste can minimize the negative impact on the social body while attracting foreign investment and creating jobs. The issuance of the first license to GRU is just the starting point, and more international operators may enter this emerging market in the future.
However, success will not come overnight. Timor-Leste needs to continuously strengthen regulatory capacity building to ensure the healthy development of the industry; it needs to invest in digital infrastructure to enhance international competitiveness; it needs to balance economic interests with social responsibilities to maintain the national reputation. As President Ramos-Horta emphasized, development must be people-centered and cannot come at the expense of national welfare.
From a broader perspective, Timor-Leste's attempt provides an interesting case study for the economic development of small countries. In the era of globalization, how to use one's policy flexibility and geographical advantages to find development opportunities in niche markets is a common challenge faced by many small countries. Timor-Leste's choice of the special path of online gambling, whether successful or not, is worth continuous attention. In the coming years, as the first batch of projects are implemented and operated, we will see more clearly the actual effects of this strategy.
It is foreseeable that, regardless of how the online gambling industry ultimately develops, Timor-Leste's exploration of economic diversification will continue. The gambling industry may be a starting point, but it will not be the endpoint. This young country is learning how to find its place in the global economy, and this learning process itself is worthy of respect.
