Wiggin EU regulation roundup — April 2018

In conjunction with Chris Elliott and Beth French of Wiggin LLP, iGaming Business provides a regulatory snapshot of igaming across the EU, including all regulated products, legalised operator types and market updates. Belgium, Germany, Spain and Sweden are among those updated for this issue

AUSTRIA
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: Licences for sports betting and horse race betting are available for private operators on a regional basis within Austria, whereas poker, casino, bingo and lottery are controlled by the monopoly, Casinos Austria, which has exclusive rights until 2027.

Status: In 2016, national courts reached conflicting decisions on the compatibility of Austria’s current gambling legislative framework with EU law, which remains unclear. The draft amendments to the Gambling Act, which would introduce ISP-blocking measures and an express provision rendering gambling contracts contrary to the Gambling Act void, has been temporarily withdrawn. It is unclear at this stage whether the initial draft will be re-published.

BELGIUM
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: All products are available to private operators except for lotteries, which are reserved exclusively for the monopoly provider. However, online operators need to partner with local casinos in order to satisfy the land-based establishment requirement; alternatively, apply for one of the 34 retail licences (F1 licences) that can be extended to cover online (F1+ licence).

Status: There remain valid arguments that the existing regime is incompatible with Belgium’s EU Treaty obligations. On 22 March 2018, Belgium's Constitutional Court ruled in favour of an exemption from VAT obligations for online gambling transactions. Active enforcement measures against operators and players are in place. A draft bill containing responsible-gambling measures is being reviewed by the Belgian Council of State.

BULGARIA
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery (excluding raffles and instant lottery games).
Operator Type: All products are available to private operators except for lotteries, which are reserved exclusively for the monopoly provider.

Status: Any operator from an EU/EEA jurisdiction or the Swiss Confederation can apply for a licence. The Bulgarian regulator has awarded approximately 20 licences to date, including to a number of international operators. The change from a turnover to a GGR tax-based system has prompted a number of local licence applications.

CROATIA
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: All products are available to private operators except for lotteries, which are reserved exclusively for the monopoly provider. Private operators can only be licensed to offer igaming if they obtain a land-based casino or betting licence.

Status: Following Croatia’s accession to the EU in 2013, it was understood that it would submit new legislation that was compatible with EU law. However, on 5 March, 2014, the Croatian government notified a draft bill to embolden the position of the monopoly and local operators, giving rise to further incompatibility issues. The receipt of a detailed opinion from the EC stalled the legislative process.

CYPRUS
Regulated Gambling Products: Sports betting, horse race betting and lottery.
Operator Type: OPAP has a monopoly over lottery operations; sports-betting licences are available to private operators.

Status: Cyprus regulated online betting in July 2012, although a licensing regime was not established until 2016. Applications for online sports-betting licences were accepted for a one-month period only from 3 October, 2016. ISPs are obliged to implement blocking measures to prohibit Cypriot residents from accessing unlicensed gambling websites. Cyprus has notified new draft gambling legislation to the EC in response to concerns about the local establishment requirement under the Betting Law and the equal treatment of gambling operators in the country (principally as a result of the exemption afforded to OPAP).

CZECH REPUBLIC
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: EU and EEA-based operators are able to apply for licences.

Status: Amendments to republic’s gambling legislation became effective on 1 January, 2017, and allow EU/EEA companies to apply for online licences. The first international operator licence was granted on 28 January, 2017. The licensing regime has recently been called into question after at least one operator announced it would no longer pursue a licence, citing the current regime as incompatible with EU law. There is no transitional/grace period for licence applicants while awaiting full licensure.

DENMARK
Regulated Gambling Products: Sports betting, fantasy sports, horse race betting, poker, casino, bingo and lottery.
Operator Type: Sports betting, poker and casino licences are available to private operators. Lottery is controlled by the state monopoly.

Status: The Danish online gambling regime went live on 1 January, 2012. ISP-blocking measures are active in the jurisdiction and the Danish Gaming Authority has been granted an injunction to block operators and suppliers that have been targeting Danish customers without the requisite licence. Denmark recently passed amendments to the country’s gambling legislation, opening up online bingo and horse race betting markets to private operators, effective from 1 January, 2018.

ESTONIA
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: Licences for all gambling products are available to private operators save for lotteries, which are reserved exclusively for the monopoly operator.

Status: Operators seeking to accept business from players in Estonia must be issued an activity licence for the type of gambling they wish to offer, then an operating permit to provide the services remotely. A blacklist of about 1,100 operators is maintained and updated by local authorities and ISP and payment blocking is in force. Though some operators argue that the regime is still not compatible with EU law, there has been no open challenge by the EC to date.

FINLAND
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: All gambling products are under the exclusive control of the three monopoly providers, Raha-automaattiyhdistys (“RAY”), Fintoto Oy and Veikkaus Oy. The monopolies merged into one state entity on 1 January, 2017.

Status: An ECJ ruling confirmed that Finland’s three monopoly providers are legally permitted, which was subsequently written into law. In November 2013, the EC also withdrew infringement proceedings. Active enforcement measures are in place (restrictive marketing for offshore operators and ISP blocking).

FRANCE 
Regulated Gambling Products: Sports betting, horse race betting, poker, bingo and lottery.
Operator Type: Private operators can obtain online licences for sports betting, horse race betting and poker. The monopoly has exclusive rights to bingo and lottery.

Status: A regulated market since the introduction of a licensing regime in 2010, following which the EC withdrew its infringement proceedings. Parliament announced a full review of French gambling legislation in 2016, although little progress has been made to date except for changes to allow for international poker liquidity and provisions relating to the organisation of esports tournaments. ARJEL has reached an agreement with regulators from Portugal, Italy and Spain to allow for international poker liquidity, with the first licence to operate cross-border shared liquidity granted in December 2017.

GERMANY
Regulated Gambling Products: Schleswig-Holstein, a small northern-German state, regulates sports betting, horse race betting, poker, casino and bingo. The other 15 states of Germany currently permit only sports betting and horse race betting.
Operator Type: Private operators can no longer obtain licences in Schleswig-Holstein and those in existence will expire on 30 June, 2019. In the other 15 states, horse race betting licences are available at a regional level but the position surrounding the 20 available sports-betting licences is still uncertain.

Status: The licensing regime is in a state of flux. The tender for 20 federal sports-betting licences was aborted following a number of appeals by operators who were not granted licences. The ECJ ruled in 2016 that Germany’s sports-betting regulation was incompatible with EU law and that enforcement actions would be unlawful where none of the 20 licences could, in practice, be acquired. The decision led to calls for comprehensive legal reform of Germany’s gambling legislation. In March 2017, all 16 German states signed amendments to the country’s gambling law; however, on 22 September, 2017, Schleswig-Holstein’s state parliament voted against ratifying these, with North-Rhine Westphalia and Hesse since announcing their intention to follow suit. Without full state support, the intended changes did not take effect, further delaying reform. A Federal Administrative Court ruling on 26 October, 2017 upheld the ban on online casinos and poker. The ruling, which is now the subject of a constitutional complaint, appears to have led to action by local regulators seeking to enforce the prohibition of online casinos by issuing interdiction letters to operators. Payment-blocking initiatives are also being pursued.

GREAT BRITAIN
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: All licences are available to private operators save for lottery, which is reserved exclusively for the monopoly provider, Camelot.

Status: Any operator that transacts with, or advertises to, British residents requires a licence from the Gambling Commission. Licensed operators are required to source gambling software from commission-licensed businesses. Since 1 August, 2017, the first use of free plays for remote gaming will be taxed and winnings will be brought into the duty calculation at the end of the rewagering process. The Horserace Betting Levy Regulations 2017 became effective on 25 April, 2017, requiring that all gambling operators (including companies based overseas) that offer bets to UK-based bettors on horse racing in Great Britain must pay a 10% levy on the profit on those bets where that profit exceeds £500,000 a year.

GREECE
Regulated Gambling Products: Sports betting, horse race betting and lottery.
Operator Type: All products are exclusively reserved for the monopoly providers, although 24 transitional licences for private operators remain active, with all products permitted.

Status: The enabling regulations that implement a Greek online gambling licensing regime are yet to be implemented. In 2012, a “transition period” commenced, whereby the Greek government granted 24 transitional licences to operators, enabling them to keep transacting with Greek residents. The fate of the 24 licences is still unclear, although the Hellenic Gaming Commission launched a consultation on the reform of the country’s online gambling regulation in late 2017. Tax authorities in Greece are currently investigating the 24 licensees for taxes owed on operations from 2010-11.

HUNGARY
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: Only the state monopolies (Szerencsejáték Zrt. and Magyar Lóversenyfogadást-SzervezőKft) and local concession companies can apply for a licence.

Status: Amendments to Hungarian gambling law came into force on 1 October, 2015, and allow only two land-based casinos to hold remote casino concessions. The regulator has since issued fines, a number of which have been challenged, against unlicensed operators that continue to target the market. In June 2017, the ECJ determined
Hungary’s gambling regime to be incompatible with Article 56 TFEU. A subsequent ECJ decision in February 2018 ruled against the Hungarian requirement that online gambling operators must have a land-based licence to offer online gambling services to Hungarian citizens, further strengthening arguments that the current regime is incompatible with EU law. The Hungarian Ministry of Justice has stated its intention to continue to seek to enforce the existing regime despite the most recent ruling. A draft bill that would introduce payment-blocking measures was notified to the EC on 15 December, 2017. Although the standstill period ended on 16 March, 2018, the bill does not appear to have been adopted to date.

IRELAND
Regulated Gambling Products: Online gaming is not specifically accounted for in Ireland’s outdated legislation and as such is currently unregulated.
Operator Type: Online betting regulated since August 2015.

Status: Ireland is currently updating its legislation, which will create a comprehensive igaming regime and payment restrictions. In January 2018, the Irish Cabinet gave the go-ahead to draft a new version of a bill that was first proposed in 2013. However, Ireland’s opposition party has tabled its own legislation to reform the country’s gaming laws, citing a lack of progress by the government on its own bill. The Betting (Amendment) Act 2015 requires remote bookmakers to hold a licence and pay a 1% turnover-based duty.

ITALY
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: Fully regulated market.

Status: The Stability Law 2016, passed in December 2015, introduces various measures affecting the remote gambling industry, including tax changes and tighter advertising rules. The law also provides for the award of 120 new online gaming licences. On 10 January, 2018, the Italian authorities published a call for tender for the allocation of the new licences. The tender process for applications closed on 19 March, 2018.

LUXEMBOURG
Regulated Gambling Products: Lottery.
Operator Type: Monopoly.

Status: The general prohibition on gambling appears sufficiently wide to cover all forms of online gambling.

MALTA
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: Private operators can apply for a local licence (except for lottery products).

Status: Following an announcement by the Malta Gaming Authority in 2015 that it was to modernise its online gambling rules, Malta published a white paper in 2017 proposing widespread reforms to its regulatory framework on gambling. The white paper seeks to replace the licensing system with two types of licence only (B2B and B2C). Subject to parliamentary approval, it looks likely that the new Gaming Act will come into force on 1 July, 2018.

NETHERLANDS
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: Monopoly for all products.

Status: The Dutch parliament’s lower house approved the Online Gambling Bill in 2016, which will introduce an online gambling licensing regime. The legislation will impose a 29% GGR tax on both online and land-based operators. The bill requires approval from the Senate and licensing is not expected to commence until at least 2019. In the interim, the regulator continues to implement enforcement measures against operators targeting Dutch players and has announced that, as of 1 June, 2017, it would expand its approach to enforcement to pursue any operators that are “specifically and unequivocally” targeting the Dutch market. The regulator has published a list of factors that it considers to indicate ‘targeting’, but expressly states that the list is not exhaustive.

NORWAY
Regulated Gambling Products: Sports betting, horse race betting and lottery.
Operator Type: Online gambling is reserved for the two monopoly providers, Norsk Tipping and Norsk Rikstoto.

Status: The monopoly has extended its offering to include live betting, online bingo and casino games in an attempt to redirect traffic from unlicensed sites. In March 2017, the government published a long-awaited white paper on how best to regulate the gambling sector, which proposed that the gambling monopoly remain in place and no licensing system be introduced. The Norwegian regulator continues to step up enforcement efforts against unregulated operators, local banks and payment service providers.

POLAND
Regulated Gambling Products: Sports betting, horse race betting, casino and poker.
Operator Type: Betting licences are available for companies with a representative in Poland. Casino and poker are reserved for a state monopoly.

Status: Legislation enacted 1 January, 2012 permits betting. Following the approval of various amendments to the Gambling Act, online gaming (including poker) is no longer prohibited as of 1 April, 2017, although the exclusive rights to offer such products are reserved for a state monopoly. Provisions that provide for the establishment of a blacklist of unlicensed operators and ISP and payment blocking came into force on 1 July, 2017. The blacklist contains more than 1,000 domain names. Totalizator Sportowy, the state-owned monopoly provider for online gaming, has announced the technology provider for delivery of its online casino.

PORTUGAL
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: Any EU/EEA operator can apply to be granted a licence for online gambling. Lottery games and land-based fixed-odds sports betting remain reserved for a monopoly.

Status: A regulated market since 2015. Although operators can now apply for licences, their Portuguese revenue streams will be subject to comparatively high tax rates, particularly in sports betting, which is subject to an 8-16% tax on turnover. In 2015, the RGA filed a state aid case with the EC challenging the Portuguese betting tax as breaking EU trade rules. On 30 January, 2018, the Portuguese gambling regulator published a call for contributions on the review of the current regulatory framework for online gambling.

ROMANIA
Regulated Gambling Products: Sports betting, horse race betting, casino, bingo and lottery.
Operator Type: Any operator from an EU/EEA jurisdiction or the Swiss Confederation can apply for a licence. Lottery games remain reserved for the monopoly.

Status: The Romanian government passed legislation in 2014 that allows entities within the EU to apply for a licence, imposes a reform on licence fees and eliminates many (but not all) of the tax burdens placed on player revenues. The Gambling Law (as amended) introduced a legal framework for a fully regulated online gambling market and requires licences to be held by online gambling operators, as well as software providers, payment processors, affiliates and testing labs. After some delay, the secondary legislation that fully implemented the new licensing regime came into force on 26 February, 2016. The National Office for Gambling in Romania published a blacklist of unlicensed gambling operators in July 2015.

SLOVAKIA 
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: Monopoly, save that land-based sports-betting operators can offer services online owing to a legal loophole.

Status: In November 2016, a bill amending the existing gambling legal framework was approved. The amendments, which entered into force on 1 January, 2017, included the introduction of ISP and payment blocking of illegal online gambling offerings in the Slovak territory. Slovakia’s Financial Directorate began to perform its supervisory function over these blocking measures from 1 July, 2017. Whether amendments will also be made to introduce a formal licensing system remains unclear.

SLOVENIA
Regulated Gambling Products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator Type: Online gambling must be operated by land-based casinos or lotteries and, as a result, only the monopoly holds online licences in Slovenia.

Status: Draft amendments to the Gaming Act were published in 2015, which aim to remove the current local establishment requirement. The proposal is yet to be submitted to the Slovenian parliament, although it is expected to be adopted in 2018. Whether any amendments will introduce a formal licensing system remains unclear. In January 2018, a proposal was submitted to parliament by an individual MP regarding the liberalisation of sports betting. Parliament is expected to vote on the proposal later in 2018.

SPAIN
Regulated Gambling Products: Sports betting, horse race betting, casino, poker, bingo and lottery.
Operator Type: Private operators can apply for licences for all gambling products save for lottery.

Status: First online licences were issued on 1 June, 2012. Operators must hold a general licence and a specific licence, both issued by the National Gambling Commission, for each activity. In June 2015, 10 new licences were awarded, the first since 2012. In addition, 25 online slot permits were issued to new and existing operators. This followed the approval of the regulation of slots and betting exchanges. The Spanish regulatory body DGOJ has formally opened its third call for tender, with applications for online licences accepted from operators for a period of one year, until 18 December, 2018. On 16 January, 2018, online poker liquidity sharing between Spain and France came into effect. The 2018 parliamentary budget includes a proposal to lower gambling tax from 25% to 20%. If approved, the amendment would come into effect from 1 July, 2018.

SWEDEN
Regulated Gambling Products: Sports betting, horse race betting, poker, bingo and lottery.
Operator Type: Only public-benefit organisations, the horse-racing industry and the state lottery may obtain a licence. No licences are available for private operators.

Status: In preparation for the introduction of an online-gambling licensing regime, the draft gambling law has now been submitted to the Swedish parliament. The draft law is expected to enter into force on 1 January, 2019, with the licence application process expected to open from 1 August, 2018.

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