ITALY: Is the 4th AML Directive a risk for the market?

The implementation of the 4th AML Directive might have a considerable impact on the Italian gaming market, subject to the way the new provisions will be interpreted by the competent authorities.  Read the rest of this entry »

The Netherlands: annual report Gambling Authority – visible enforcement is “Achilles heel”

By Richard van Schaik and Róbin de Wit

Yesterday, the Dutch Gambling Authority (Kansspelautoriteit, “KSA”) published its 2016 annual report. The report provides some facts and figures with respect to 2016, as well as a forecast for the following years. A short overview:

  • The KSA will increase the level of enforcement, as it considers visible enforcement as the “Achilles heel” of a regulator. It confirms that if is fully ready to meet the 80% channeling degree to the legal online offer as envisaged by the Dutch government, meaning that the KSA will actively fight against illegal online operators.
  • The KSA stipulates that despite its efforts, fines imposed are difficult to collect. This is partly because a binding remedy to collect fines imposed on foreign illegal online operators is lacking, but also because offenders are often unable to pay because of debts issues. Despite this, the KSA takes several steps to improve the number of fines actually collected.
  • The KSA confirms its stricter enforcement strategy for the coming period to combat illegal online gambling. This means that the KSA will no longer issue a warning first but will take immediate enforcement measures. Such measures may involve fines of up to EUR 820,000 or 10% of the operator’s turnover. For more information, please read our earlier blog here.
  • It is expected that the KSA will also continue to put up barriers against third party service providers that provide services to illegal operators (such as payment service providers).
  • The KSA expects to grant a totalizator license in Q2 2017. For more information about the background of this procedure, please see our earlier blog here.
  • A number of charity lottery license applications are still being handled over the coming period. More background information can be found here.
  • The KSA will be closely involved in the revised casino regime, whereby Holland Casino will be privatized. Sixteen business locations will be sold and two additional licenses for new locations will be issued. The KSA will be responsible for granting the necessary licenses and will supervise the (feasibility of the) new regime. It is unknown when the new regime will kick off: the bill was adopted by the House of Representatives on 31 January 2017 and will now be handled by the Senate.

Polish blacklist of gambling websites

On 1 April 2017, the Polish Regulator set up a gambling domain names blacklist. It will contain all gambling games websites addressed to recipients in Poland (i.e. in particular the websites that are in Polish or are advertised in Poland) which are run by gambling operators that do not have a Polish licence. Read the rest of this entry »

Sweden: Proposal for the introduction of a licensing system

Today, the investigator appointed by the Swedish Government, Mr. Håkan Hallstedt, handed over his proposal (1,340 pages) for the introduction of a Swedish licensing system to the Swedish Minister for Public Administration, Mr. Ardalan Shekarabi.

Read the rest of this entry »

eSports YouTube star and business partner prosecuted for operating and promoting an unlicensed gambling website

By Greg Mason

On 6 February 2017, in the first successful prosecution of its kind by the GB Gambling Commission, Craig Douglas (33) and Dylan Rigby (34) pleaded guilty to offences under the Gambling Act 2005 relating to unlicensed eSports gambling.

Douglas, a prominent eSports YouTuber known as “NepentheZ”, was fined £91,000 for advertising unlawful gambling and inviting children to gamble. His business partner, Rigby, was ordered to pay £174,000 in fines and costs for offences relating to the provision of facilities for gambling and the advertising of unlawful gambling.

The pair admitted to being directors of Game Gold Tradings Limited which operated and advertised the unlicensed gambling website FutGalaxy.com.

FutGalaxy.com, which has no official connection with the FIFA series of games or EA Sports, allowed customers to buy virtual currency known as “FUT coins”. These FUT coins could then be used to gamble (on products including sports betting, a jackpot lottery style game and a higher or lower style game) and could even be converted into FIFA coins which could be sold for real money via an unauthorised secondary market.

In this case, the lack of child protection was particularly concerning. The District Judge, DJ McGarva, labelled the offences as “very grave” given that there were no restrictions on young persons from accessing the website and placing bets. Sarah Harrison, CEO of the GB Gambling Commission, noted that “the defendants knew that the site was used by children and that their conduct was illegal but they turned a blind eye in order to achieve substantial profits. The effect on children of online gambling was rightly described by the Court as ‘horrific’ and ‘serious’“.

Given the gravity and nature of offending, it is perhaps surprising that the Court did not impose a custodial sentence and instead opted for a relatively small financial penalty. Previous voluntary settlements with the GB Gambling Commission relating to failures in AML compliance and social responsibility controls resulted in significant financial penalties.

With eSports and eSports gambling becoming a growing global trend, it is attracting greater attention from regulators. The GB Gambling Commission is currently undertaking a discussion paper on emerging products in the gambling market, including betting on eSports events. The GB Gambling Commission’s current guidance states that “betting on eSports should be treated no differently as betting on any other live event… if you wish to offer bets to GB consumers on eSports events then you will need a betting licence. The types of betting offered and how you offer them will determine the licence required.

For further information from the GB Gambling Commission in relation to eSports, please visit: http://www.gamblingcommission.gov.uk/for-gambling-businesses/Compliance/Sector-specific-compliance/Betting/e-Sports.aspx.

Top 3 takeaways from DLA Piper gambling and tax event

Upcoming licensing regimes, strict sanctions and privacy compliance are among the regulatory changes discussed during the DLA Piper gambling and tax event. Read the rest of this entry »

The Netherlands: fines for online operator and directors

By Richard van Schaik and Róbin de Wit

Today, the Dutch Games of Chance Authority (“KSA”) published its decision to impose a fine of EUR 170,000 on a gambling company for offering unlicensed online gambling aimed at the Dutch public. Moreover, the company’s directors were also in person faced with a fine amounting to EUR 50,000 each.

Reason for the KSA to impose fines is that games – such as blackjack and roulette – were offered through a website using e.g. the Dutch flag and ‘the Netherlands’ as country option in the dropdown menu in the players account. Furthermore, the website was mainly set up in Dutch language. Using Dutch language is part of KSA’s prioritization criteria, meaning that enforcement by the KSA is initially focused on companies who, amongst others, offer gambling websites in Dutch language.

As the company had ignored the Dutch prohibition on offering online gambling as well as KSA’s warnings upfront, the KSA held that the company wilfully took the risk that sanctions would be imposed. Furthermore, the KSA took the opinion that the violations of Dutch gambling legislation could be attributed to the directors involved in person as they failed to take measures to prevent the violations, whilst they were reasonably required to do so. This gave cause for the KSA to also to fine the directors individually.

Notices of objection to the decision of the KSA can still be lodged.

Please click here for the report issued by the KSA.

DLA Piper Italy and AIGI event on the General Data Protection Regulation

DLA Piper Italy and AIGI will run an event on how the General Data Protection Regulation will impact the business of companies on 16 February 2017. Read the rest of this entry »

Sports betting does not require a German gambling license in North Rhine-Westphalia at the moment

By Dr. Michael Stulz-Herrnstadt and Christoph Engelmann

The Higher Administrative Court of North Rhine-Westphalia (OVG NRW) ruled in a recent decision that sports betting intermediation by an EU-licensed provider does not require a(n additional) German gambling license in North Rhine-Westphalia at the moment. With this decision the court takes a very liberal stance. Yet, this is consistent with last year’s decisions by the ECJ and the German Federal Administrative Court (BVerwG). As a result the operation of sports betting in North Rhine-Westphalia on the basis of an EU-license (and without a German license) cannot be prosecuted as a criminal offense and it cannot be subject to an administrative prohibition.

The decision is anticipated by other EU-licensed sports betting operators that are now able to offer their services at least in the German state North Rhine-Westphalia until the new State Treaty on Gambling enters into force in 2018 when a new sports betting licensing procedure is expected to start. Although the decision is limited to only one of the 16 German states (i.e. North Rhine-Westphalia) it would be consistent to apply it to the other German states, too.

Update: Dr. Michael Stulz-Herrnstadt and Christoph Engelmann commented on the decision of the BVerwG in the German magazine “GRUR-Prax” 2017 p. 132. The article can be viewed here (in German, subscription based).

Data Protection Day 2017!

At DLA Piper we pride ourselves in providing the insights, tools and know how you need to plan ahead and manage change in a privacy landscape that is constantly evolving. With publication of the final text of the EU General Data Protection Regulation in April 2016, many organisations are now actively looking ahead to a challenging timetable to secure GDPR readiness, ahead of May 2018.

International Data Protection Day provides an opportunity to reflect on where we see organisations are in terms of managing privacy to an appropriate standard of protection, and share some of the materials and learning we have created to help those on the compliance journey navigate the road ahead.

Data Protection Laws of the World

We are pleased to launch the 2017 edition of our newly designed Data Protection Laws of the World, which now covers over 95 jurisdictions. This highly regarded complimentary go-to guide offers a high-level snapshot of selected aspects of data protection laws across the globe, in an easily accessible online format.

Access the handbook

Data Privacy Snapshot

Over 250 organisations have completed our Data Privacy Scorebox to assess current levels of privacy compliance in their respective business operations. Our inaugural Global Data Privacy Snapshot draws on data from the scorebox assessments to provide a perspective on current maturity levels in levels of compliance across the market. The report pays particular focus on maturity levels in the Financial Services, Life Sciences and Healthcare, and Technology and Telecoms sectors, with an overall finding that suggests most organisations have a lot of work on their plate to achieve the levels of compliance they need.

This report will be launching soon.

Data Privacy Scorebox

Launched in 2016, this online tool will help you assess your organisation’s data protection maturity level. Complete a survey covering areas such as storage of data, use of data, and customers’ rights to generate a report that shows your organisation’s maturity levels against 12 key areas of privacy compliance. The report includes a practical action point check list and peer benchmarking data.

Access the scorebox.

Privacy Matters Blog

Our Privacy Matters blog is where you will find the latest updates (often within hours) from our global privacy team on all matters related to data protection, privacy and security. Subscribe with your email address on the home page to receive a message whenever a new post is made.

Access the blog.

Want to know more about the EU Data Protection Regulation? 

We maintain a dedicated GDPR microsite, where you can find lots of useful information to help you learn about the EU Data Protection Regulation – what it covers, the impact it is likely to have on organisations across different sectors, actions to take now to prepare, as well as regular updates and information on our webinars and events.

You will also find our summary Guide to the GDPR which many organisations find a helpful quick guide to the key requirements of the GDPR.

Access the microsite.

COMING SOON: EU GDPR App

We are soon to launch an EU GDPR App which gives easy access to the Regulation text. Available for download on iOS and Android, the App will provide a handy guide to the GDPR so you can quickly access Articles, link to relevant Recitals and make comparisons back to the Directive. The App will be available in 13 different languages.

For more information on any of these tools or to contact us, please email dataprivacy@dlapiper.com.

Sweden: Amendments to the Swedish gambling legislation

Only months before the investigator appointed by the Swedish Government is scheduled to present his proposal for the introduction of a licensing system in Sweden, changes are made to the current Swedish gambling legislation.

Read the rest of this entry »

DLA Piper Gambling and Tax Event before ICE Gaming Conference

Here is the opportunity of getting free gambling and tax law advice from DLA Piper lawyers of the hottest gaming jurisdictions of the moment.  Read the rest of this entry »

Amendment to the Polish Gambling Act signed by the Polish President

On 28 December 2016, an amendment to the Polish Gambling Act (described in this post) was signed by the Polish President. It will come into force on 1 April 2017. On 30 December 2016, new secondary legislation to the amended Gambling Act was notified to the EC. The notifications can be found here (700, 699 and 698). The standstill period expires on 31 March 2017.

Top 5 gaming predictions for 2017

It was a very interesting year for the gaming market that is setting very high expectations for 2017 and here are my predictions. What are yours?  Read the rest of this entry »

Amendment to Polish Gambling Act adopted

Last Thursday (Sejm) and Friday (Senat), an amendment to the Polish Gambling Act was adopted. Once signed by the Polish president and published, it will come into force on 1 April 2017. Its official aim is to increase the protection of players against risks related to excessive gambling and to decrease the unlicensed market. However, it extends the number of games permitted in Poland and includes a couple of revolutionary changes: Read the rest of this entry »

Casinos Given Green Light in Japan

On December 15th 2016, the National Diet officially opened Japan’s doors to Casino gambling by passing the ‘Integrated Resort Promotion Act’, which lays the groundwork for the legalization of Casinos in Japan. If the process continues smoothly, casinos will be operating in Japan after the 2020 Tokyo Olympics.

Current Status of Gambling Regulations in Japan

Gambling has generally been prohibited in Japan subject to several exceptions including government-managed sports betting on horseracing, speedboat racing, bicycle racing and motorcycle racing as well as government-sanctioned lotteries. Pachinko, which resembles a mix between pinball and slot machine games, has traditionally been the most popular form of gambling in Japan although it has operated in a legal grey area as it is not specifically recognized as a legal form of gambling.

In order to change Japanese attitudes towards Casino gambling, a group of lawmakers called the Lawmaker Alliance for the Promotion of Integrated Resorts first prepared a draft bill to promote the introduction of casino-integrated resorts in 2011, but it did not receive popular support. However, after Tokyo was awarded the 2020 Olympic/Paralympic Game, the bill gained momentum and has received new life as Komeito (one of the coalition parties of the ruling LDP) has reversed its position regarding Casino gambling. This shift has paved the way for passage in the National Diet, provided that additional measures are implemented to limit the number of integrated resorts and reduce gambling addiction in Japan.

Brief Overview of the Bill

The Integrated Resort Promotion Act provides preliminary guidance for the development of implementing legislation and basic framework for the Casino industry in Japan. Notably, the Act specifies that Casinos will be limited to certain geographic areas as selected by the government to promote tourism, contribute to local economies, and establish Japan as a premier sightseeing destination.

In addition to the requirement for implementing legislation, the Act establishes a new governmental organization named the Casino Control Committee to grant Casino licenses and provide regulatory oversight for the Casino industry in Japan. The Committee will set regulations on gaming machines, systems, and tools manufactured and imported for use in the Casinos and otherwise monitor compliance.

Looking Ahead

The Act does not provide any specific requirements for licensing and a more detailed regulatory regime will be provided in another law, which must be enacted by next year. It should further be noted that the Integrated Resorts Promotion Act only legalizes licensed private onshore casinos and will not legalize other forms of gambling such as Pachinko and online casinos. With the expected opening of Japan’s casinos shortly after 2020, Japan is well positioned to sustain the economic momentum and tourism influx that will be generated by the Olympics.

BAGO – A new Belgian gaming sector initiative

Last Friday (on 25 November 2016), DLA Piper Belgium attended a colloquium of BAGO, the Belgian Association of Gaming Operators. BAGO is a new sector initiative composed of various gaming operators licensed under Belgium’s regulatory framework.

During the event, attended by several of the sector’s stakeholders, BAGO called upon the Belgian regulator as well as the legislator to create a legal and operational framework which allows for a diverse gaming offering, whilst respecting both customer protection considerations and economic viability of the sector which will become increasingly digitized.

BAGO intends to offer better insight in the Belgian gaming market by supporting studies and market research and equally drives self-regulation by proposing a gaming advertising code.

Should you have any further questions, please contact Antoon.dierick@dlapiper.com or Patrick.Vaneecke@dlapiper.com

The Netherlands: new enforcement strategy against illegal remote gambling

The Dutch Games of Chance Authority (Kansspelautoriteit, “KSA”) announced a revision of its enforcement strategy in combatting illegal online gambling. This new strategy kicks off as per 1 January 2017.

Key change is that the KSA will no longer warn individual operators offering online gambling to Dutch players prior to actually taking enforcement measures. To date, the KSA issued warning letters to operators that meet one or more of the prioritization criteria (.nl website, Dutch language, advertisements) first, giving them the chance to modify their gambling operations and cease targeting the Dutch market. In case the warning was neglected, sanctions followed.

As from 1 January 2017, operators that fall under one or more of KSA’s prioritization criteria will no longer receive a warning: illegal online operators are immediately exposed to serious enforcement measures. Such measures may involve fines of up to EUR 820,000 or 10% of the operator’s turnover. The KSA declared that operators that do not meet one or more of the prioritization criteria, but do offer online gambling to Dutch players, are not exempted from enforcement measures either. The operator may be confronted with KSA’s enforcement powers particularly when public interests are at stake.

Reason for the revision in KSA’s enforcement policy is that KSA holds the opinion that by now, it should be generally known by operators that offering online gambling targeted to the Netherlands without a license is illegal.

Until 31 December 2016, operators have the opportunity to amend their current practice in a way that their gambling offer is no longer available to Dutch players and that they do no longer fall under the prioritization criteria. To that end, the KSA recommends operators to take care of an IP-country blockade or other measure that makes online gambling unavailable to Dutch players.

It is expected that the online gambling market in the Netherlands will be open as from early 2018.

The Netherlands: totalizator licensing procedure now open to applicants – deadline December 30

By Richard van Schaik and Róbin de Wit

The first phase of the totalizator licensing procedure for the years 2017-2022 is open now and ends December 30, 2016. Yesterday, the Dutch games of chance authority (Kansspelautoriteit, “KSA”) revealed further details around the two-phased application procedure.

Phase 1

In the first phase, parties can show their interest by downloading and filling out online forms supported by necessary appendixes (e.g. recent certified extract from the Commercial Register and statement of good conduct). Further licensing criteria are defined in the downloadable application form.

Interested parties can be admitted to the official licensing procedure until December 30, 2016, 23:59. This is the closing deadline of phase 1.

Phase 2

The second phase of the licensing procedure will start mid-January 2017. During this phase, parties selected by the KSA during the first phase will be invited to present how they will implement and execute the totalizator license. Specific details as to the criteria are yet unknown. Eventually, the KSA will grant a license to one operator that will be allowed to offer horse and harness racing bets in the Netherlands.

Further details around the second phase will be revealed prior to its commencement early 2017.

Further information about the licensing procedure and any criteria connected thereto will be published on this blog as soon as it becomes available.

Please read our previous blog regarding the totalizator licensing procedure here.

Autumn Budget – Gambling Taxes

Freeplays

The Government has confirmed it will go ahead and bring the remote gaming duty treatment of freeplays in line with the less generous treatment of free bets under general betting duty. This will take effect for accounting periods commencing on or after 1 August 2017 as previously announced.  We expect to see the responses to HMRC’s consultation on freeplays and the draft legislation on 5th December 2016.

Use and enjoyment VAT charge for advertising services

There is still no news on whether the UK is going ahead to impose VAT, under an extension to the effective use and enjoyment rule, on B2B advertising and marketing (including affiliate marketing) services which are supplied to non-EU established businesses.  The UK had announced it was intending to do this, once it had imposed VAT on insurance repair services carried out in the UK, which has been done.  With Brexit preparations ongoing, the extension of the use and enjoyment rule to advertising services may now be on the back-burner.

Avoidance Disclosure Regime to include gambling duties

In a bid to strengthen the tax avoidance disclosure regimes for indirect taxes, the government intends to extend the scope of the VAT Avoidance Disclosure Regime to cover all indirect taxes, including gambling duties.  Provisions will also be made to move the primary obligation to disclose avoidance schemes from users to promoters.  These changes will have effect from 1 September 2017.

For further information please contact Richard Woolich, UK Head of Tax.

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