Category Archive: Enforcement

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.

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 OVG NRW in the German magazine “GRUR-Prax” 2017 p. 132. The article can be viewed here (in German, subscription based).

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).

Polish Regulator publishes a new report on the gambling market in 2015

The Polish Regulator has published a new report on the implementation of the Polish Gambling Act in 2015. The report presents interesting statistical data and summarizes the most important court judgements.

The Polish version can be downloaded from the Regulator’s website: link.

Prime minister conference: amendment of the German State Treaty on Gambling

By Dr. Michael Stulz-Herrnstadt and Christoph Engelmann

Last week the German prime ministers reached an agreement on the amendment of the German State Treaty on Gambling (GlueStV). They decided to cancel the limitation of concessions for sports betting. With the 2012 GlueStV the German states wanted to allow up to 20 licenses for private sports betting operators. However, none of the licenses has been issued. This led to criticism by the European Court of Justice (ECJ) and court decisions that even ordered the gambling authorities to issue sports betting licenses for operators. In the future the concessions shall not be limited to the amount of 20 but be assigned on the basis of minimum standards.

In addition to this the prime ministers ask the gambling authorities to consider the possibilities of improving the enforcement against illegal online gambling (especially unlicensed lotteries, sports betting and online casino games) possibly by founding a public-law institution with centralized responsibility. While evaluating the GlueStV the authorities shall also consider the simplification of identification and authentication of players and the substitution of the monthly stake-limit of 1.000 Euro with a loss-limit in the same amount. At last the prime ministers ask the gambling authorities to examine which regulatory measures could improve the regulation of online casinos considering the experience in other European countries. This decision hints in the direction that even licensing of online casinos might be possible in the future.

However, this is just the first decision of the prime ministers. After the criticism by the ECJ a new gambling regulation is needed in Germany and this decision of the prime ministers will hopefully lead to an amendment of the GlueStV in the near future. While the prime ministers of the 16 German states are discussing those amendments the authorities are working on a process to align the sports betting regulation with EU law. They reached an agreement to give out orders of approval for sports betting operators in the meantime. These orders allow (online) sports betting in Germany if certain requirements are met. However, the operator needs an order of approval in every single German state and not every state has an approval process in place.

Poland: Key points to be regulated by the new amendment to the Polish Gambling Act

On Monday 23 May, the Ministry of Finance (the Polish gambling regulator (“Regulator“)), published a list of points to be covered by the forthcoming amendment to the Polish Gambling Act. According to the list, the amendment will cover the following points:

  1. IP and payment blocking will target unlicenced operators. This should reduce the “grey area” in gambling, increase the market share of licenced operators, and raise the level of protection for players, because – according to the Regulator – only licenced operators guarantee the offering of games in a safe and responsible way.
  2. The operation of slot machine games outside casinos will be covered by a state monopoly and operated by a designated company. They will only be operated in designated places, under permanent supervision, and will not be available for people under the age of 18.
  3. Operators offering games on slot machines and online gambling will be required to introduce responsible gaming regulations which should increase the protection of players from the negative effects of gambling.
  4. Sanctions for violating the Polish Gambling Act will be more severe (however, it is not specified what this means). This will disrupt unlicenced operators and thus increase the market share of licenced operators.
  5. The regulation of poker games will be liberalized. It will be permitted to organize poker games outside casinos and the process of organizing them will be simplified. It will be possible to legally participate in online poker games.
  6. The requirement for people directly supervising and operating gambling games to pass professional exams will be liquidated. The exams will be replaced by training obligations. According to the Regulator, this should  reduce red tape and the costs for entities operating in the gambling industry.

According to the Ministry of Finance, these proposals represent a compromise between providing the highest possible level of protection for players against the adverse effects of gambling (including limiting the “grey area”) and guaranteeing the transparent and efficient functioning of the legal gambling market in Poland.

According to the Regulator’s announcement, the draft amendment has been transferred to departmental consultation. If enacted following EC notification, the amendment will come into force on 1 January 2017.

The key issue that is missing from the above list – and the most important issue for any onshore and offshore operator – is that of taxation. The announcement does not say anything about whether Polish gaming tax will be based on GGR under the amendment.

The proposed timing for the introduction of the amendment is quite challenging as it does not seem to take into consideration the fact that the EC notification process may take longer than three months stand-still. Another question mark is whether there will be any transitional period for operators to adjust their activities and apply for licences under the new regime.

The link to the full text of the Regulator’s announcement:

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.

New Polish Gambling Act – further speculation

Following a press conference on 2 April during which the Polish Minister of Finance announced that a draft of the new Polish Gambling Act should be ready by the end of the month, the media has been discussing how it may regulate gambling in Poland. There is a suggestion that the new regulations will be based on the Danish model and that it will include a gaming tax of (depending on the source) between 10% and 20% of GGR.

It is suspected that the new regulations will extend the list of permitted online gambling activities from online betting to include online poker (including live poker) and online casinos. It is expected that there will be a moderate fee for obtaining a gambling licence and that advertising and sponsoring rules will be liberalized. As well as providing an additional source for the Polish government to finance its family support program “500+” (PLN 500 monthly for each second and next child in a given family), the new law should also encourage gambling operators to spend more on sponsoring sport in Poland.

On the other hand, it is also speculated that the new law may introduce more effective measures to prevent Polish residents from using websites of unlicenced operators, such as IP blocking or payment blocking. Totalizator Sportowy (a state-owned company) would like to have a back-tax introduced for offshore operators as is the case in Romania.

Singapore: Draft Bill To Criminalise Online Gambling

By Lauren Silk

The Remote Gambling Act 2014 was introduced to Singapore Parliament for first reading on 8 September 2014. This Act adds to Singapore’s already stringent anti-gambling laws by criminalising online gambling.

The Ministry of Home Affairs, Singapore said that “the bill will prohibit all forms of remote gambling activities unless exempted”.  The only exemptions  are to government backed entities such as Singapore Pools and the Turf Club, which will be able to offer online products, subject to the discretion of the Ministry. Read the rest of this entry »

Belgium: Gaming Commission pleads for a further restriction and rationalization of the gaming industry

By Patrick Van Eecke and Raf Schoefs

Patrick Van Eecke and Raf Schoefs (DLA Piper, Brussels) discuss recent media coverage in relation to the Belgian Gaming Commission’s (BGC) open letter to the next government in which it requests for a further restriction of the gaming industry and for a tightening of the legal framework.

Read the rest of this entry »

GB: Voluntary agreement reached to block payments but no statutory control

In the House of Lords debate yesterday (4 March 2014), the issue of payment blocking as a measure to enforce against unlicensed operators post-implementation of the Gambling (Licensing and Advertising) Bill was once again discussed. The proposed amendment (set out in full below), which would have provided the Gambling Commission with statutory powers to oblige “credit institutions” and “financial institutions” to block payments to unlicensed operators was narrowly defeated.

However, Baroness Howe of Idlicote (who suggested the amendment together with Lord Stevenson) confirmed that a letter had been sent from Lord Garnier to other Lords which stated that “the Gambling Commission has reached agreement with a number of major payment systems organisations to work together to block financial transactions with unlicensed operators“.   Read the rest of this entry »

Great Britain: Internet Providers reject blocking of illegal gambling sites

According to a report by the Financial Times, British internet service providers (ISPs) have rejected an attempt by the Gambling Commission to post warning pages on unlicensed gambling websites, alerting the user that the site is illegal. Read the rest of this entry »

DLA Piper at European Responsible Gaming Day

On November 28,  a round table on the role of the European Union in online gambling was organized by the European Gaming and Betting Association (EGBA) during the sixth Responsible Gaming Day in Brussels.

Patrick Van Eecke, partner at the Brussels’ IPT department of DLA Piper and member of DLA Piper’s Gambling team recaps some of his statements made at the round table in Brussels.

Read the rest of this entry »

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 »

Netherlands: First fine for online gambling company

For the first time ever the Dutch Gambling Authority has sanctioned an online gaming company. Globalstars, a gambling company based on Curacao (The Netherlands Antilles), was fined for 100.000 euros for offering online games of chance to the Dutch public. Read the rest of this entry »

Europe: Effective Enforcement – Is there any such thing?

With the UK government committed to the reform of its licensing and taxation systems for online gambling companies, the focus will inevitably turn to the measures the Gambling Commission intends to use to effectively curb the black market. Ash Averill, (DLA Piper, London) explores the methods adopted in other European jurisdictions to implement effective enforcement strategies.

Read Effective Enforcement – Is There Any Such Thing?, which appeared in the March/April edition of iGaming Business.

Europe: Will the Fox Report urge the European Commission to take legal action against Member States

During the QED session on Tuesday 19 March last, 4 speakers gave their opinion on some online gambling topics and entered into debate afterwards. An interesting topic was the initiating by the European Commission of infringement cases against Member States due to non-compliance of national gaming legislations with European law principles. Read the rest of this entry »

Netherlands: A power play from the Dutch Gaming Authority

The Dutch Gaming Authority claims success in its curbing the offshore gaming market. Read the rest of this entry »

Europe: ECJ emphasises importance of compliance with Transparency Directive

The ECJ ruling in the case brought by Fortuna, Grand and Forta against the Polish government acts a timely reminder to Member States of the supremacy of EU Law and the need for Member States to notify domestic legislation to the Commission prior to its enactment or amendment. Read the rest of this entry »

Belgium: Bet-at-home the latest operator to challenge the blacklist

It was announced in Belgian media this weekend that Malta-based Entertainment Ltd., an online sports betting and casino games operator, has initiated legal proceedings against the Belgian State by means of an interim procedure before the Brussels’ Court of First Instance. Read the rest of this entry »

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