All-In June (Global)

by DLA Piper
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Australia

Gambling advertising, and in particular live odds during the broadcast of events, has been the subject of much attention and debate in Australia recently.  Continuing in the same vein, on 3 June 2013 Senator Richard Di Natale introduced the Broadcasting Services Amendment (Advertising for Sport Betting) Bill 2013 ("Bill").  The Bill proposes more stringent restrictions on advertising than those already implemented as a result of changes to the country's Commercial Television Industry Code, and suggests a ban on all gambling ads before 9pm. Such changes would obviously have a significant impact on the gambling industry and its ability to market its products.

However, earlier than anticipated, the Joint Select Committee on gambling reform published its report on the Advertising and Promotion of Gambling in Sport on 10 June 2013.  Amongst the nine recommendations made in the report, one was that the Bill would not be introduced.  Although operators can take some comfort from this recommendation, all of the other recommendations made by the Joint Select Committee suggest an increase in regulation of the gambling and sports industry.  In particular, the key concerns were in relation to the effect of marketing on children and vulnerable people, the persuasive nature of the promotion of sports betting, and the integration of sports betting into commentary.

For more information on these developments please read:

Australia: Government report into advertising and promotion of gambling in sport.

Australia: Further advertising restrictions for betting operators on the horizon.

Bulgaria

Now that the licensing regime is in place, the Bulgarian Gambling Commission ("BGC") have taken steps to prevent unlicensed operators from taking business from the jurisdiction.  On 11 June 2013, the BGC published a blacklist of operators which was subsequently updated on 24 June and now contains 48 operators.

Once an operator is included on the blacklist it has three days in which to either suspend operations in Bulgaria or obtain a licence.  Failing to do so will result in a cease and desist order for ISP blocking being sought from the local courts.

It appears that the BGC is trying to encourage operators to apply for a local licence so that they fall within the local regulatory and, more importantly, taxation net.  With the tax rate set at 15% of turnover, it is unlikely that any operator will be able to conduct a profitable business in the territory.  It remains to be seen if operators will apply for a licence.

Czech Republic

A recent court decision held that the Ministry of Finance was incorrect in refusing a local casino operator, Casino Kartàc Group, a licence to operate online casino when similar online licences have been offered in respect of fixed odds betting.  Given the case has been ongoing for almost six years, Casino Kartàc Group has already filed a damages claim for loss of profits in an amount equal to €100 million. 

This decision highlights the need for all gambling products to be licensed in a consistent manner, and with new online gambling legislation expected to be submitted to the European Commission imminently, hopefully the Czech Ministry of Finance has taken note. 

For more information please read: Czech Republic: Ministry of Finance about to lose €100 million case against national gambling provider.

Germany

Following on from an administrative court decision on 14 May which ruled that the online licensing procedure in Germany was contrary to EU and equal treatment principles, it is no surprise to hear that licences for online sports betting are not expected to be issued until at least August 2013.

It is now a year to the day that the Interstate Treaty on Gambling came into force.  The fact that no licences have been issued illustrates that an inconsistent and non-EU complaint licensing regime will not always pass muster. The industry has been particularly instrumental in defending its position.

For more details please read: Germany: Delay of sports betting licensing process

Hungary

In January 2013 the Hungarian government submitted an amendment to its Gambling Act which essentially reserved gambling activities for the state or local concession companies.  The standstill period for the European Commission to review the legislation ended on 10 June 2013, but comments have not been published. Given the incompatibility of the proposed amendment with EU principles, it is assumed that the European Commission would have criticised the draft legislation.  That said, on 26 June, the Hungarian National Assembly approved plans to tax and regulate online gambling in this way and also to block any unlicensed sites from 2 January 2014.

The main concern regarding the recently approved gambling law is the requirement to establish a domestic concession company.  Although the executive order that implements the current licensing regime is yet to be introduced, the latest proposed amendments obviously present problems in terms of compliance with European law and therefore it can be expected that operators will challenge the regime.

Italy

As anticipated, the Italian Betting Exchange Regulations have now come into force.  However, with a more favourable tax regime than sports betting, questions have been raised over whether or not it will have a negative impact on the sports betting market.

In addition, the technical regulations for new hi tech slot machines were approved on 20 June.  The new technical regulations permit new gaming functions as well as containing provisions relating to machine fraud, problem gambling and underage gambling.

For more information on both these stories please read:

Italy: Betting Exchange Regulations will save or kill sport betting?

Italy: New comma 6 A slot machines (NewSlot 3) regulations approved

Sweden

Although it is not possible for private operators to obtain a gambling licence in Sweden, Swedish residents can freely access and participate in gambling services offered over the internet.  However, there is a specific prohibition against advertising.

Recent case law in relation to advertisements from foreign gambling companies has intensified the debate about Sweden's need for some comprehensive laws for online gambling.  Despite this pressure, the Swedish authorities appear to be in no rush to implement new legislation and officials have confirmed that any new gambling legislation should not be expected until after the elections in 2014.  Further, if new legislation is implemented, it is unlikely to be more liberal than the current regime.

The inactivity in Sweden is good news for operators as it provides a respite from the continual need to obtain separate online licences in an increasingly polarised gambling market.

For more information on this story please read: Sweden: No changes to a Swedish gambling regulation for another two years

US

Draft legislation was published in the US congress on 6 June seeking to introduce a federal system for the regulation of online gambling (apart from sports).  Republican Congressman Peter King introduced the legislation entitled "Internet Gambling Regulation, Consumer Protection, and Enforcement Act 2013".

The bill is meaningful because it restarts the discussion about potential federal legislation regulating online gambling.  However, its enactment is by no means certain due to all the procedural and political hurdles that have to be overcome. It is certainly not anticipated that any developments will occur in the short term.

For further comment on the proposed federal legislation, please read: US: Federal online gambling legislation issued in U.S. Congress

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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