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THE MONTHLY JOURNAL FOR THE ONLINE GAMBLING INDUSTRY
VOLUME 13 ISSUE 12 DECEMBER 2014
WWW.E-COMLAW.COM
Expert report
on Norwegian
gaming market
An expert committee set up to
investigate the Norwegian
gambling market has submitted
a report to the Minister of
Culture, which was published
on 8 December, recommending
measures and amendments to
the current gambling regulation
in order to inter alia protect the
Norwegian gaming market
from illegal offshore operators.
The committee was tasked in
June 2013 with studying the
technological developments in
the gaming market, particularly whether legislation should
be expanded to include new
types of gaming, mapping the
competition from illegal operators and proposing measures to
protect regulated games of
chance from such operators.
The recommendations to
protect Norwegian games from
illegal competition include: the
prohibition of payment transfers must be made more effective through consultation with
the banking industry; and
procedures should be initiated
to stop the advertising of
foreign betting companies that
do not hold a licence. The
committee also recommended
that a study be carried out into
whether social games that
resemble games of chance
should be regulated.
IN THIS ISSUE
Grey Markets 03
New Jersey To trial the
potential of social 05
Romania New draft
proposal introduced 07
India Sikkim licence 09
Cloud Malta’s LGA
issues consultation 10
Malaysia Gambling 12
Norway Proposed
regulatory changes 14
Canada Quebec 15
Tribal online bingo website
targeted by Californian AG
The California Attorney
General (CA) argued in a US
District Court on 4 December
that the Iipay Nation of Santa
Ysabel’s real money bingo
website Desert Rose Bingo
(DRB) is in breach of the
Nation’s tribal compact with
California, as it constitutes an
activity not authorised by the
compact or the federal Indian
Gaming Review Act (IGRA).
CA, and the US Department of
Justice in a separate suit filed on
3 December, also argue that the
Nation violates the Unlawful
Internet
Gambling
Enforcement Act (UIGEA) by
accepting wagers for gambling
prohibited by state law; both
suits seek to enjoin the Nation
from offering real money online
bingo.
The DRB site utilises ‘proxy
play technology,’ meaning that
anyone in California can log on.
The Nation argues that its
website is a ‘technologic aid’ to
bingo and thus its offering is
Class II gaming, permissible
under the IGRA. Further, it
argues that wagering on the
DRB website, carried out as it is
via the proxy technology, takes
place exclusively on tribal lands,
and that its offering is subject to
tribal jurisdiction only and the
state has no jurisdiction in this
case.“The Nation has taken the
position that its activities fall
outside the compact’s scope,”
said
Jennifer
Carleton,
Shareholder at Brownstein
Hyatt Farber Schreck.
CA contends that the website
is an ‘electronic or electromechnical facsimile of bingo,’
which is specifically not considered Class II gaming and the
activity is thus prohibited Class
III gaming.“It seems inevitable
that it would take a lawsuit to
determine whether proxy play is
a legitimate means to accept a
wager on Indian lands consistent with IGRA,” said Carleton.
“CA also argues that wagering
under the Nation’s offering
takes place at the location of the
person placing the wager as well
as where the wager is received,”
explain Linda Shorey, Marsha
Sajer and Anthony Holtzman of
K&L Gates. “The Nation
responds that all gaming is
taking place on the reservation,
just as states offering i-gaming
have declared a specific location
to be where the wagering occurs
without regards to the location
of the player.”
“It will ultimately be tested in
the courts to see what is legally
permissible, and what is not,”
concludes Heidi McNeil
Staudenmaier, Partner at Snell
& Wilmer.“This is a novel case,
so nothing is guaranteed in the
judicial process and how a judge
will ultimately rule on the
merits. The situation could
certainly have an impact
throughout
the
gaming
industry.”
GBGA challenge to British PoC tax
is granted judicial review by court
The UK High Court on 3
December granted permission
for the Gibraltar Betting and
Gaming Association (GBGA) to
bring its challenge to the new
British point of consumption
(PoC) tax regime; Mrs Justice
McGowan noted that‘the application raises very significant
points of principle and equally
important practical issues for
the enforcement of revenue
collection.’
“Given the potential impact
on operators, it is understandable that leave to bring the
challenge has been granted,”
said Julian Harris, Partner at
Harris Hagan. “It seems to me
likely that in that circumstance
it would only have been refused
if there were no arguable case.”
The GBGA filed its challenge
against the betting and gaming
duty provisions contained
within the Finance Act 2014 in
October, alleging that the PoC
tax breaches Article 56 of the
TFEU. The tax came into effect
on 1 December.
“The Department for Culture,
Media & Sport and the Treasury
have always been very keen to
keep the licensing and tax
regimes separate, partly, one
suspects, to shield the licensing
regime
from
successful
challenge,” said Andrew
Danson, Partner at K&L Gates.
“That approach has left the tax
regime slightly exposed, since
the tax is not part of the licensing regime, so cannot be justified on consumer protection
grounds.”
“It will be interesting to see if
a British judge will overturn a
British tax on EU law grounds,
when other EU Member States
are able to tax operators on a
PoC basis,” concludes Danson.