European regulation round up
Chris Elliott and Jane Ashford-Thom of Wiggin provide a regulatory snapshot of igaming markets across the EU for iGaming Business. This includes regulated products and legalised operator types within each country and impending market updates.
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, Austria Lotteries.
Status: A recent appeal challenging Austrian tax legislation is seen as a test case by other offshore operators targeting Austrian business. The Member State has proposed changes to its regulations (notably a ban on in-play betting) to help curb match fixing, measures which the Austrian Bookmakers Association has agreed to implement. The Austrian government recently put forward a proposal to block unlicensed offshore operators targeting the country, although next steps are unclear.
BELGIUM
Regulated gambling products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator type: All products are available to private operators save for lotteries, which are reserved exclusively for the monopoly provider. However, online operators need to partner up with local casinos in order to satisfy the land-based establishment requirement; or alternatively, apply for one of the 34 retail licences (F1 licences) which can be extended to cover online (F1+ licence).
Status: The new Belgian government has published a coalition agreement which proposes to increase the number of land-based casinos from 9 to 11. Accordingly, this will allow online operators to team up with the new casinos to offer casino products online. Further restrictions and a tightening of the legal framework is also proposed, with three decrees having been notified to the EC. The regulator recently introduced rules to prevent live casino products being offered to players unless the dealers are physically in Belgium. It is uncertain if the proposed changes will be implemented this year. The potential for EC infringement proceedings remains. The Belgian Gaming Commission recently announced its decision to suspend virtual sports from 1 June, as well as proposals to introduce new advertising restrictions.
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 save for lotteries, which are reserved exclusively for the monopoly provider.
Status: Bulgaria’s Gambling Act became law on 1 July 2012 but licences were not available until mid-2013 as further implementing legislation needed to be in force. Any operator from an EU/EEA jurisdiction or the Swiss Confederation can apply for a licence. The Bulgarian regulator has subsequently issued licences, including to a number of international operators, and recently announced plans to remove the restriction on Gibraltar-based applicants.
The change from a turnover to a GGR tax-based system has prompted a number of operators to apply for a local licence.
CROATIA
Regulated gambling products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator type: All products are available to private operators save for lotteries, which are reserved exclusively for the monopoly provider.
Status: Following Croatia’s accession to the EU in July 2013, it was understood it would submit new legislation which was compatible with European law. However, on 5 March 2014 the Croatian government notified a draft bill which seeks to embolden the position of the monopoly and local operators. Only land-based casinos and betting operators can apply for a licence pursuant to the draft bill. ISP blocking is also proposed. The receipt of a Detailed Opinion from the EC stalled the legislative process and there have been no developments since.
CYPRUS
Regulated gambling products: Sports betting and lottery.
Operator type: OPAP have a monopoly over lottery operations and only sports betting licences are available to private operators.
Status: Cyprus regulated online betting in July 2012. The government published a blacklist and warned local ISP providers that they would face fines for failures to block sites offering unlicensed gambling products. Moves in late 2013 to update the laws further have not resulted in any substantial changes.
CZECH REPUBLIC
Regulated gambling products: Sports betting, horse racing betting and lottery.
Operator type: Online gaming is not expressly regulated but a limited number of local licences are available for Czech companies with Czech share ownership. Lottery is reserved for the monopoly.
Status: A draft bill has been published which creates a local licensing regime for all gambling activities together with stringent enforcement measures for any unlicensed operators. New legislation has been submitted to the Czech Parliament and notified to the EC, but has received criticism from EU regulators and Malta., meaning the government’s aim to have the law implemented by 1 January 2017 looks in doubt.
DENMARK
Regulated gambling products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator type: Sports betting, poker and casino licences are available to private operators. Bingo, lottery and horse race betting (fixed odds only) 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 in order to block operators and suppliers that have been targeting Danish customers without the requisite licence. In December, the government adopted two amendment bills which will create specific licences for fantasy sports operators, as well as bring about certain new match-fixing and AML measures.
ESTONIA
Regulated gambling products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator type: Licences for all gambling products are available for private operators save that the monopoly has exclusive rights to lottery.
Status: Only 18 operators are currently licensed in the jurisdiction, 10 of which relate to online gambling. A “blacklist” of around 1,100 operators is constantly maintained and updated by local authorities and ISP blocking is in force. A new law which introduces new player protection measures and relaxes certain online sports betting advertising restrictions came into force in June 2015.
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-automaatiyhdistys (“RAY”), Fintoto Oy and Veikkaus Oy.
Status: ECJ ruling confirmed that Finland’s three monopoly providers are legally permitted which has subsequently been 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 and lottery.
Operator type: Private operators can obtain online licences for sports betting, horse race betting and poker. The monopoly has exclusive rights to lottery.
Status: France is a regulated market that has been sanctioned by the EC. On 13 February 2014, French Members of Parliament introduced a bill which amends several provisions of the French Consumer Code. The amendments expand the definition of prohibited games of chance to capture games that are, even in part, based on chance. ARJEL, the French gambling regulator, is currently carrying out a review of the country’s online gambling regime.
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 only permit 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 in Germany is in a state of flux. The 20 Federal sports betting licensees were named on 2 September 2014, but following numerous appeals from operators not granted one. In October, Hesse’s highest administrative court rejected the regional government’s appeal against an earlier decision to suspend the awarding process, leaving the legal and regulatory position uncertain. Following a referral from the German court of Sonthofen , the CJEU ruled, on 4 February 2016, that Germany’s sports betting regulation is incompatible with EU law and that enforcement actions will be unlawful where a de facto monopoly exists and none of the 20 licences could, in practice, be acquired. The decision throws doubt on the underlying compatiblity of Germany’s gambling regulation with EU law, leading to calls for comprehensive legal reform.
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. From 31 March 2015, licensed operators are required to source gambling software from Commission licensed businesses. A corresponding tax rate of 15% of gross profits was introduced on 1 December 2014. This is subject to an ongoing judicial review by a Gibraltar trade association and its questions regarding its compatibility with European law have been referred to the EJC. The Treasury is confident that it can defend its position.
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 licensing regime in Greece (like Germany) is also in a state of flux. The Greek government granted 24 transitional licences to operators in December 2012 enabling them to keep transacting with Greek residents. However, in March 2013, the government notified draft legislation to the EC which effectively rescinds the licences; a position criticised by the EC. Greece’s new government is currently considering plans to more tightly regulate online gambling, to end the ongoing transition position. The fate of the 24 licences is still unclear.
HUNGARY
Regulated gambling products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator type: Only the state monopoly, Szerencsejáték Zrt. and local concession companies can apply for a licence.
Status: Amendments to Hungarian gambling law came into force on 1 October 2015 which allow only two land-based casinos to hold remote casino concessions. State monopoly operator Szerencsejáték Zrt alone may offer sports betting and only the state monopoly provider Magyar Lóversenyfogadást-SzervezőKft can offer online horse race betting under the new law. The regulator has since issued fines against unlicensed operators who continue to target the market. ISP blocking of unlicensed sites has occurred since June 2014.
IRELAND
Regulated gambling products: Online gaming is not specifically accounted for in Ireland’s outdated legislation and as such is currently unregulated. Online betting regulated since August 2015.
Status: Ireland is in the process of updating its legislation which will create a comprehensive online gambling regime and payment restrictions. The Betting (Amendment) Act 2015 now requires remote bookmakers to hold a licence, and pay a 1% turnover-based betting duty.
ITALY
Regulated gambling products: Sports betting, horse race betting, poker, casino, bingo and lottery.
Operator type: All products available to private operators save for lottery which is reserved for the monopoly provider. However, it is currently not possible to obtain a licence in Italy.
Status: Fully regulated market. Previous restrictions on the type of events/markets on which bookmakers can offer odds is possibly to be abolished. A recently passed Stability Law introduces various measures affecting the remote gambling industry, including tax changes and plans for tighter advertising rules. The law will provide for the award of 120 new online gaming licences (lasting for 6 years), the tender for which will begin on 31 July 2016. The government also moved to a GGR-based tax for online betting operators (22%), with effect from 1 January.
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, lottery.
Operator type: Private operators can apply for a local licence but not in relation to lottery products.
Status: On 3 June, Maltese regulator the Malta Gaming Authority introduced a number of policy changes. These include changes regarding hosting servers abroad, audit requirements and the cloud environment. Malta plans to introduce gambling legislation during 2016 to modernise online gambling rules.
NETHERLANDS
Regulated gambling products: Sports betting, horse race betting, poker, casino, bingo, lottery.
Operator type: Monopoly for all products.
Status: The Remote Gambling Act was published in May 2013, which stipulates the conditions which operators will be able to offer online gambling in the Netherlands. The Remote Gambling Act has now received approval from the Council of Ministers and the Secretary of State, paving the way for its implementation. Due to political issues, licences are now unlikely to be awarded until 2017. The government’s recent announcement to set online gambling duty at 29% (in line with the offline tax rate) has faced industry criticism. In the interim, the regulator has started to implement enforcement measures, and signed cooperation agreements in October 2014 with Dutch banks and payment processors over blocking illegal gambling websites. In November 2015, the regulator levied its highest ever fine on two gambling operators for continuing to target Dutch players.
NORWAY
Regulated gambling products: Sports betting, horse race betting and lottery
Operator type: Online gambling is reserved for its two monopoly providers: Norsk Tipping and Norsk Rikstoto.
Status: The monopoly has extended its offering to include live betting, e-bingo and casino games in an attempt to redirect traffic from unlicensed sites. However, the new government is understood to be considering a limited licensing regime for foreign operators. The government is preparing a white paper on how best to regulate the gambling sector, and aims to present this to Parliament in November.
POLAND
Regulated gambling products: Sports betting and horse race betting.
Operator type: From 3 September, licences are now available for companies with a representative in Poland as opposed to a local establishment.
Status: Legislation enacted 1 January 2012 only permits betting and only four licences were granted to local companies (Fortuna, Milenium, STS and Totolotek). The recent amendment to Poland’s Gambling Act removes the requirement to incorporate a separate Polish limited liability or joint stock company. The Government confirmed in January that it is considering changes to its gambling tax regime (one of the highest in Europe).
PORTUGAL
Regulated gambling products: Sports betting, horse race betting, poker, casino, bingo, lottery.
Operator type: Monopoly for all products, but changes imminent.
Status: Portugal’s online gambling legislation was passed by Parliament in late February and came into force on 29 June 2015. While operators can now apply for licences, their Portuguese revenue streams will be subject to comparatively high tax rates, particularly sports betting, the subject of a 8-16% tax on turnover. The RGA recently filed a state aid case with the EC challenging the Portuguese betting tax as breaking EU trade rules. There is no deadline for the licensing window or limit on the number of licences that may be issued. Delayed technical standards were introduced on 23 December, paving the way for operators to certify their online systems to obtain a licence.
ROMANIA
Regulated gambling products: Mutual horse racing, parimutuel sports betting and lottery.
Operator type: Regulation pending
Status: The Romanian government passed legislation at the very end of 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. Secondary legislation, setting out the details and requirements for licensing, was notified to the EC in April and implemented on 12 June 2015, initiating a 90-day period in which operators may apply for an interim licence which would be valid until 31 December 2015. The law includes a provision requiring prospective licensees to pay back-taxes (20% of GGR) if they have taken Romanian customers dating back to December 2010 or risk criminal charges. The regulator has stepped up enforcement attempts by publishing a blacklist of unlicensed gambling products, whilst a number of large European operators have challenged the regulator’s decision on the award of licences. The resignation of Romania’s prime minister in November has cast uncertainty as to whether the implementation of the regulations will
be delayed.
SLOVAKIA
Regulated gambling products: Sports betting, horse race betting, poker, casino, bingo, lottery.
Operator type: All products are operated by the monopoly save that land-based sports betting operators can offer services online due to a legal loophole.
Status: No developments anticipated.
SLOVENIA
Regulated gambling products: Sports betting, horse race betting, poker, casino, bingo, 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: Slovenia has published a new draft gambling law but it seeks to reserve its restrictive position on gambling.
The law has not yet been voted on in parliament and a timeline for implementation is unclear.
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: The first online licences were issued on 1 June 2012. Under the law, online operators must hold a general licence and a specific licence for each activity from the National Gambling Commission. In June 2015, 10 new licences were awarded to new operators, the first new licensees since the market opened in 2012. 25 online slot permits were also issued to new and existing licensees. This followed on from the approval of the regulation of slots and approval of the regulation of betting exchanges.
SWEDEN
Regulated gambling products: Sports betting, horse race betting, poker, bingo and lottery.
Operator type: Only public benefit organisations, the horseracing industry and the state lottery may obtain a licence. No local licences for private operators.
Status: The Swedish government is under pressure to update its regulations. The commencement of infringement proceedings by the EC appeared to mobilise the Government but recent statements have suggested that updated regulation to permit private operators to obtain a licence may not emerge in the short-term. A government-commissioned inquiry recently proposed amendments to the Lotteries Act which would remove the differences between the sanctions imposed on advertising by unlicensed foreign and unlicensed domestic operators. The Government has confirmed it is proceeding with an investigation into reforming the law with a view to potentially opening the market to private operators in due course. The review will conclude at the end of March 2017.