Category Archive: Sports

E-Sport will finally be recognised as a sport in Poland

Rafał Burda and Wojciech Biegański

On 14 March 2017, the Council of Ministers adopted a draft law amending the Act of 25 June 2010 on Sport (accessible here). The draft is currently subject to its first reading in parliament. The draft introduces an extension to the existing definition of sport, supplementing the solely physical activity expressed thus far in the sports law with “competition based on intellectual activity aimed at achieving a sports result”. This extension is aimed at achieving two main goals: (i) to officially recognise sporting disciplines like checkers, chess or sports bridge as sports competitions; and (ii) to bring e-sport competitions under the jurisdiction of sports law, due to the fact that such intellectual activity is widely regarded as having similar social effects to physical activity. Given the fact that e-sport is expected to expand its global fan-base to around 345 million by 2019, this change in the law seems absolutely necessary. As of 1 April 2017, accepting bets on virtual events (including e-sport) is expressly allowed under the Polish Gambling Act.

New AML Act for Germany – impact on gambling operators

By Dr. Michael Stulz-Herrnstadt and Christoph Engelmann

The financial committee of the Federal Parliament agreed on amendments to the new German Anti Money Laundering (AML) Act (Geldwäschegesetz, GwG) yesterday. The new law will bring important changes for gambling operators.

While the scope of the new AML Act will be extended from online gambling to also offline gambling operators, there are some gambling products (e.g. social lotteries, slot machines) that might benefit from new exceptions because of their low money laundering risk. Other gambling operators (e.g. sports betting shops) might be faced with new challenges like restrictions in payment methods and new administrative offenses with administrative fines of up to 1 million Euro.

To implement the 4th AML directive the new law has to enter into force by 26 June 2017. Prior to this the Federal Parliament and the Federal Assembly are expected to agree to the proposed changes. We will keep you updated on the developments.

Update (19 May 2017): The Federal Parliament adopted the changes on 18 May 2017.

Unlawful prohibition of sports betting in Germany

The Federal Administrative Court of Germany (BVerwG) ruled in a recent decision that if the state monopoly for sports betting persists an administrative prohibition of sports betting without a German sports betting concession would be unlawful.

This decision ties in with a recent decision of the European Court of Justice (ECJ). There the ECJ ruled that a criminal prosecution of a sports betting intermediate is contrary to EU law if the licensing process for private sports betting organizers has been held to not conform with EU law by national courts.

Dr. Michael Stulz-Herrnstadt and Christoph Engelmann commented on the decision of the BVerwG in the German magazine “GRUR-Prax” 2016 p. 542. The article can be viewed here (in German, subscription based).

Poland: Proposal of new betting and poker regulations

According to the statement of the Polish Minister of Finance, Paweł Szałamacha (the Gambling Regulator), proposals for the new Polish Gambling Act were to be presented by the end of April 2016. To date this has not been done. However, on Sunday 15 May, a press conference was organized by Minister Jarosław Gowin (Deputy Prime Minister and Minister of Science and Higher Education, representing the right wing party Polska Razem) and Zbigniew Boniek (President of Polish Football Association).

During the press conference, Minister Gowin outlined his proposals for the new law regulating betting and card games like poker. Under the new law, betting and card games like poker should be ‘excluded’ from the Gambling Law.

With respect to betting, the gaming tax should be based on 20% GGR instead of the current 12% turnover tax. According to the authors of the proposal, this should generate income of PLN 200 million (i.e. EUR 50 million) for the state budget. Further, since there should be some liberalization with respect to advertising and sponsoring, sports team in Poland should earn an additional PLN 100 million (i.e. EUR 25 million). 10% of the revenue from gaming tax should be allocated to socially important initiatives. Namely, 7% should be given to the Polish Olympic Committee and used to support youth sport, while the remaining 3% should be used to combat gambling addiction.

According to the authors of the proposal, it should result in the situation where 70% of the Polish betting market is regulated, because the new law should permit the blocking of both IP and payments of operators that do not have a valid Polish licence.

With respect to poker, which is currently permitted only in licenced land-based casinos, the new law should permit online poker and the organizing of tournaments by licenced operators. It should also de-criminalise poker games played in private houses as a social card game (which is currently prohibited and subject to fines and even imprisonment).

The proposals for the new law were not prepared by the main party in the Polish government – PIS (Law and Justice); however, Minister Gowin hopes that they will gain its support and be adopted by the Polish parliament.

Germany: Administrative court orders gambling authority to issue sports betting license

By Dr. Michael Stulz-Herrnstadt and Christoph Engelmann

Nearly four years have passed since the new State Treaty on Gambling (GlueStV) came into force allowing up to 20 sports betting licenses. The German gambling authorities reviewed the applications for sports betting licenses, decided that 35 companies meet the requirements and selected 20 companies to receive a license. But because of court challenges no license has been issued which led to criticism by the European Court of Justice (ECJ).

On Friday (15 April 2016) the administrative court of Wiesbaden (VG Wiesbaden) ordered the German gambling authorities to issue a sports betting license for one of the companies in the places 21 to 35. The court held that the limitation to only 20 licenses is contrary to EU law. Because the gambling authorities already decided that the company meets the requirements for a sports betting license they are required to issue the license without applying the limit of 20.

This is the first decision that orders German gambling authorities to issue a sports betting license under the current gambling regulation. With its decision the court “anticipates” the next move of the German gambling legislator which is rumored to be the extension of the limit of 20 to at least double the size. The legislator’s decision is expected in June.

Germany: EU Court rules against German sports betting regulation/new German legislation strongly needed

By Dr. Michael Stulz-Herrnstadt and Christoph Engelmann

The European Court of Justice (ECJ) ruled that EU law may preclude the imposition of penalties in respect of the unauthorised cross-border intermediation of sporting bets carried out in Germany (judgment in case C-336/14). The case has been referred to the ECJ by a German local court (AG Sonthofen). AG Sonthofen had to decide whether someone who carries out sporting bet intermediation activities by means of a gaming machine installed in a sports bar located in Germany without the necessary German gambling license could be prosecuted. The sporting bets have been collected on behalf of a company established in Austria and holding an Austrian but not a German sporting bets license.

In Germany it is a criminal offense to collect sporting bets without the necessary German gambling license. Following an ECJ decision in 2010 the German courts ruled that the former state monopoly for sporting bets was contrary to EU law. That is why in 2012 a new State Treaty on Gambling came into force that allows 20 sporting bets licenses for private organizers as an “experimental clause” for seven years. However no license has been issued because of court rulings finding the licensing procedure to be intransparent, discriminating and unconstitutional. The state sporting bets organizer on the other hand was able to continue its business because of a transitional provision.

The ECJ ruled that a prosecution of the sporting bets intermediate is contrary to EU law under this circumstances. The reason is that the licensing process for private organizers has been held to not conform with EU law by national courts. In addition the state monopoly for sporting bets that has already been decided by national courts to not conform with EU law persists because of the transitional provision. As a result the prosecution would only rely on a formality – no license – that roots in an infringement of EU law.

With its decision the ECJ strengthens the role of sporting bets intermediaries in Germany. The German state legislators are now even more put on the spot to pass a new legislation with a licensing procedure compliant to EU law. In addition the Bavarian Constitutional Court recently ruled that sections of the State Treaty on Gambling are unconstitutional and the Higher Administrative Court of Hesse ruled that the central decision-making body of the State Treaty on Gambling (the so-called gambling council) is unconstitutional, too. The decision of the ECJ continues these doubts about the German gambling regulation. Some states (like Hesse) have already demanded new and more liberal legislation.

Update: Dr. Michael Stulz-Herrnstadt and Christoph Engelmann commented on the ECJ’s decision in the German magazine “GRUR-Prax” 2016 p. 106. The article can be viewed here (in German, subscription based).

Germany: Advertising for sports betting on TV

By Dr. Michael Stulz-Herrnstadt and Christoph Engelmann

The High Administrative Court of Bavaria (BayVGH) had to decide whether the TV broadcasting of advertising for sports betting can be prohibited if the sports betting company has been selected for a sports betting license that has not been issued yet. The state media authorities decided to only proceed against tv advertising for sports betting if the relevant gambling authority decides to proceed against the sports betting company.

The BayVGH ruled that the state media authority acts contradictorily if it proceeds against the broadcaster without the corresponding decision of the gambling authority. It ruled in accordance with the court of lower instance (VG München) that the sustained licensing process cannot be held against the sports betting companies
especially as the (single) state licensed sports betting company is allowed to stay in business while private companies are waiting for the new licenses.

Dr. Michael Stulz-Herrnstadt (partner) and Christoph Engelmann (associate) commented on the BayVGH’s decision in the German magazine “Zeitschrift fuer Wett- und Gluecksspielrecht” (ZfWG) 2015 pp. 250-252. The article can be downloaded here (in German).

Australia: Racing Queensland Boards Abolished & Greyhound Racing Industry Report

By Thomas Zhong

The Queensland State government has announced a restructure of the racing industry in light of an inquiry into the greyhound racing industry. The Report published by inquiry commissioner Alan MacSporran was highly critical of the greyhound racing industry, noting that:

public confidence may have been dealt an almost terminal blow by the exposure of what is likely to have been a widespread practice of live baiting in the greyhound racing industry… the practice of live baiting could not be engaged in without the acquiescence of many, who although not directly involved, chose to ignore the cruelty and turned a blind eye.”

The key recommendation from the Report was the separation of commercial and integrity branches of the industry – allowing for one body to concentrate on the business (to maximise commercial success) and the other body to focus on ensuring integrity (with the prioritisation of animal welfare issues).

Other recommendations include:

  • a new statutory authority be created which is dedicated to ensuring the integrity of the Queensland racing industry.
  • an all codes board be established as the control body for all three codes of racing (Thoroughbred, Harness and Greyhound).
  • the tracking of Greyhounds from birth to leaving the racing industry.
  • increasing oversight over licensing requirements and compliance with the rules of racing.

The Queensland Inquiry is the first of three Inquiries announced by State Governments in Australia, with the New South Wales report due on 30 September 2015 and the Victorian report due imminently.

A copy of the Queensland Inquiry Report can be viewed here.

UK: DCMS continues its consultation on potential Levy replacement

The Department of Culture, Media and Sports has published consultation documents, through which it “seeks views on a bespoke statutory framework that could replace the Horserace Betting Levy”.

The consultation will close on 12 March 2015 and the documents can be found here.

Betting Integrity: Study seeks to understand which betting products lie at the heart of the matter

An interesting study has just been published by the Asser Institute, which looks at whether any empirical evidence can be found to support the views expressed by certain gambling and sports regulatory bodies that the major cause of sports integrity issues is the ability for punters to particpate in “micro-bets”. These are the wagers that covers specific instances in games, such as number of corners, number of cards etc.

The study, which can be read here, challenges this view and suggests the overwhelming majority of betting integity issues appear to involve more “traditional” bets such as the final score.

At a time when more and more jurisdictions are contemplating regulating online betting for the first time and, when doing so, considering whether betting should be restricted at all in terms of its product offering, the report offers a useful, additional, point of reference for the debate.

U.S.: United States Supreme Court Stops Sports Betting in NJ

Despite New Jersey’s long and hard fought battle to legalize sports betting within the Garden State, the United States Supreme Court decided not to hear New Jersey’s appeal of the lower, appellate court ruling that stayed the federal ban on sport betting. As a result of the Supreme Court’s decision, only Nevada will maintain the authority to offer plenary sports betting to its patrons within the State of Nevada, with Oregon and Delaware having the right to offer limited forms of sports betting.

EU: Detailed studies of the relationship between sports and gambling published

The International Centre for Sports Security, in collaboration with the University of Sorbonne, has published a detailed analysis of the integrity issues facing sport in the context of betting. The report can be accessed here.

The European Commission also published a report, analysing the rights of sports organisers, again in the context of betting. This report can be accessed here.

GB: Disappointing Budget, Levy and point of consumption. Does bad luck only run in threes?

As if the tax whammy on bookmakers wasn’t enough, the voluntary code of conduct compelling bookmakers to take tougher precautions to ensure limits are placed on the amount of money and time spent on machines is set to become a series of binding licence conditions.  Likewise the primary purpose revisions may also impact shops, even if the retail estates are scaled back, given they will limit the machines that are made available for use. Read the rest of this entry »

Media, Sport and Entertainment Webinar series 2014

DLA Piper is recognised as a world leading Media, Sport and Entertainment practice. This year, we mark our commitment to advising our clients seamlessly across borders through a variety of new publications and events for our clients and friends. Read the rest of this entry »

Sports and betting conference – 14 November

40% discount available for the 2013 Sporting and Betting conference in London

  Read the rest of this entry »

Spain: Approval of new regulations for betting and bingo

By Albert Agustinoy, DLA Piper Spain

The Spanish Official Gazette has published today a Decision from the Spanish Gambling Authority (namely Decision no. HAP/1998/2013, available in Spanish here) amending the regulations that apply to betting and bingo. Read the rest of this entry »

UK: Gambling Commission publishes betting integrity decisions making framework

The Gambling Commission has published its Betting Integrity decisions making framework. This outlines the Commission’s practices and decision making procedure when betting integrity issues arise, from when the Commission first receives a piece of information to when a case is closed. A flow chart on page five of the published document illustrates, in general terms, the structure of the overall framework.

The framework comes as a result of the Gambling Commission’s betting integrity work programme which aims to detect the threat and lessen the risks of betting in the UK being corrupted by the misappropriation of information or the manipulation of events.

To access the framework, please click here.

Spain: First Steps for Coordinating Measures against Match Fixing

By: Albert Agustinoy and Elisa Lorenzo, DLA Piper Spain

The Spanish General Directorate of Gaming Affairs (Dirección General de Ordenación del Juego – “DGOJ”) has recently held a first meeting with the some of the main licensed online sport bookmakers aimed at establishing a specific plan in order to fight against match fixing practices in Spain. Read the rest of this entry »

Australia: Government Report into Advertising and Promotion of Gambling in Sport – full details

In the midst of persistent public discussion and media interest the Parliamentary Joint Select Committee on Gambling Reform has released its report into Advertising and Promotion of Gambling Services in Sport. The Report has been released early following a five month inquiry by the Committee. Read the rest of this entry »

Australia: Government Report into Advertising and Promotion of Gambling in Sport now released

After a five month Inquiry into the Advertising and Promotion of Gambling in Sport, the Joint Select Committee on Gambling Reform has reported early. Read the rest of this entry »

Older posts «