THE NEWSLETTER FOR THE GAMBLING INDUSTRY
VOLUME 12 ISSUE 09 SEPTEMBER 2013
WWW.E-COMLAW.COM
Bwin.party’s revenues fell 16% for the first six months of 2013 to € 342.5m, the online gaming group announced in its half year results on 30 August, caused by the challenge of optimising the business “with a much greater focus on nationally regulated and to-beregulated markets,” said CEO
Norbert Teufelberger.
“I can’t speak for bwin.party, but across the industry it is accepted that regulatory and taxation costs will continue to rise as more jurisdictions require local licences and aggressively seek to block access to those that do not hold them,” said Clive Hawkswood, Chief
Executive of the RGA.
Teufelberger spoke of his frustration at the delays to bwin.party’s poker launch and the company’s preparation to get back into the US market having filed an application in
New Jersey and a ‘preliminary finding of suitability’ in Nevada.
“Despite the challenges, the industry as a whole is still very healthy,” adds Hawkswood.
“The introduction of new licensing regimes will be a theme for many years to come, so there will be opportunities, but there is also more growth potential in existing markets.”
UK The KPMG report into the PoC tax 03
US Federal vs. stateby-state regulation 05
EU Report European
Parliament response 08
Social Gaming 10
Spain The state of play a year on 12
Serbia New licensing rules for i-gaming 14
Lithuania Update 16
The European Parliament (EP) adopted on 10 September a report led by MEP Ashley Fox, which inter alia calls for EC infringement action against
Member States whose online gambling laws are in breach of
EU law, and for the prevention of match-fixing.
“The recommendation to the
EC to launch infringement proceedings against Member
States that breach EU law is immediately preceded by recommendations to continue dialogue, and cooperate, with
Member States, and immediately followed by a statement that the EP ‘respects’ national gambling monopolies,” said
Andrew Danson, Senior
Associate at K&L Gates.
Commenting on the contradiction, Danson continued: “The report could barely have created less pressure in this area.”
The report advocates that
Member States follow the principles of the EU Treaty when developing national regulation, though the ability to develop such regulation would remain with the Member State itself. Further, the report recommends that operators only be licensed in a given Member
State provided that the company in question is not operating elsewhere in contravention of another Member
State’s law, unless, as Danson explains,“the laws of that other
State have been established as non-compliant with EU law by the Court of Justice. This is likely to be very controversial in the industry, particularly given that the report has shied away from putting any real pressure on the EC to bring infringement proceedings against
Member States whose online gambling laws may breach EU law.”
The report also suggests a ban on in-play sports betting, arguing that such activity is
‘very vulnerable to matchfixing,’ a recommendation that
Matthias Spitz, Attorney at
Melchers, calls “disappointing,” adding “The EP recognises that match-fixing mostly occurs through unregulated betting operators outside the EU; this erodes the credibility of this recommendation.” Spitz believes “protectionist regulators at national level could be tempted to invoke [the ban].”
“It is unlikely that further action will be taken on this point unless compelling evidence shows that this form of gambling does in fact represent a significant increased risk to consumers and / or to the integrity of sports,” said
Danson. “The UK Gambling
Commission, for instance, concluded in 2009 that on the basis of the evidence available to it, in-play betting needed no further controls at that time.”
The Gambling Commission
(GC) published consultations on proposed changes to the UK
Licence Conditions and Codes of Practice and proposals for the protection of customer funds on 12 September, rules which govern all licensed gambling operators, including remote operators who will be required to obtain a UK licence when the point of consumption
(PoC) regime comes into effect.
“In my view the GC needs to be more prescriptive in some areas of the LCCP and needs to understand that lots of remote operators have developed good relationships with regulators in other jurisdictions, so may find the GC's lack of detail in some areas a challenge,” said Stephen
Ketteley, Partner at DLA Piper.
The changes posed include: a requirement for licensees to take responsibility for third party compliance; restructuring of information requirements; software to be supplied by a
British gambling software operating licence holder; and protection of customer funds.
“In regards to the latter, where there have been genuine issues, the GC proposes no concrete requirements other than the very minimum, that customer and company funds are kept in separate accounts,” said Jason
Chess, Partner at Wiggin.
“The GC may need to evolve, as a licensing authority, in order to guide the myriad of operators and suppliers,” adds
Ketteley. “The LCCP will apply to many more operators than currently,” said Nick Nocton,
Director at Jeffrey Green
Russell, “the consultation is therefore of great significance to the whole UK facing industry.”