Monthly Newsletter – March 2020

Europe’s monthly online gambling news

Coronavirus Concerns Leads To 11% Drop In Forecasted Global Gambling Revenues 

Global concerns about the coronavirus (COVID19) have led to a 11% drop in forecasted global gambling revenues in 2020* – with 2020 global gambling gross win downgraded from its pre-COVID19 forecasts of $473bn to $421bn (close to 2016 levels), according to industry analysts H2 Gambling Capital’s new weekly COVID Impact Tracker. While H2 Gambling Capital expect an increase in online activity, with the online gambling sector moving from 13.2% to a 15.7% share of global gambling revenue, the unprecedented shutdown of major sports events across the globe will hit overall revenues across the entire gambling sector (both offline and online).

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Stronger Enforcement Of Single Market Rules Needed In The EU – EGBA

The European Gaming and Betting Association (EGBA) welcomes the European Commission’s action plan for the enforcement of EU single market rules published today (10 March) and urges the Commission to ensure online sectors and consumers truly benefit from the single market. EGBA agrees that implementation and enforcement of EU law is a joint responsibility of both the European Commission and Member States. But that joint responsibility does not negate the special role of the European Commission as the guardian of the Treaties to ensure EU law is adhered to, as well as its role in supporting Member States to avoid potential infringement by scrutinizing their draft laws and maintaining dialogue via the Technical Regulation Information System (TRIS) notifications.

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Gambling companies reel as coronavirus means most sports bets are off

The owners of gambling brands Paddy Power, Betfair, Ladbrokes and William Hill warned on Monday (16 March) of a big hit to earnings because of an unprecedented shutdown of global sports events caused by the coronavirus, hammering shares across the sector. Flutter Entertainment Plc, which operates the Paddy Power and Betfair brands, estimated that it would face a 90 to 110 million pound ($111 million-$136 million) impact on full-year earnings if curbs on sports fixtures remained in place until the end of August. That figure was based on horse racing continuing but only behind closed doors, as is the plan in Britain. GVC Holdings Plc, owners of the Ladbrokes betting shop chain, said its full-year core earnings may be reduced by 130-150 million pounds because of fewer sports fixtures.

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International group for healthcare mutualities publishes Memorandum on Gambling

The International Association of Mutual Benefit Societies (AIM), an international umbrella organisation of federations of health mutuals and other not-for-profit healthcare payers, has published a memorandum on gambling as compulsive gambling has a serious impact on public health. The present memorandum provides for a list of recommendations on how to tackle compulsive gambling and calls on public authorities (including the EU and WHO) to take action.

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Survey – 40% Of Europeans Use The Internet For Entertainment (Including Online Gambling)

A recent Eurobarometer survey for the European Commission has found that 40% of Europeans use the internet for entertainment purposes, including online gambling. The survey “Europeans’ attitudes towards cyber security” has a dedicated section (pages 9-32) about internet use amongst Europeans, as well as the devices they use for accessing the internet and the activities they do online. Key findings of the survey: 76% of Europeans use the internet on a daily basis; 85% of Europeans access the internet through smartphones; and 40% of Europeans use the internet for entertainment, including online gambling.

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Kindred Group publishes Annual Report and Sustainability Report for 2019

EGBA member Kindred Group plc has published its Annual Report for 2019 and its Sustainability Report for 2019 on the Group’s website. Kindred Group’s Sustainability Report covers activities during 2019 and includes facts, figures, ambitions and commitments within the five sustainability priority areas: Responsible gambling, Maintaining integrity, Running a compliant business, Being Kindred and Contributing to our communities. Kindred reports progress on sustainability commitments, including increase in customers who adopt healthier gambling behaviour after personalised responsible gambling messages, an increased focus on communicating sustainable consumption in the marketing and sponsorship advertisement space.

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National developments

Austria: Minister Plans To Set Up Independent Gambling Regulator

Austria’s new minister of finance has announced plans to establish an independent gambling regulator, moving it out of the Treasury where industry officials claim it faces a conflict of interest. Finance minister Gernot Blümel also said he is opposed to the sale of state shares in Casinos Austria, the casino gambling monopoly that the government part-owns through its Österreichische Beteiligungs (ÖBAG) holding company, and even raised the possibility of increasing its stake. But perhaps more significantly to the wider industry, the finance ministry is looking to set up an “independent institution which will be free of instructions and responsible for the supervision of casinos, transparent licensing and comprehensive player protection”, spokesman Andreas Jilly said. (SUBSCRIPTION ARTICLE)

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Bulgaria: Sports Totalisator handed lottery monopoly

The state-owned Bulgarian Sports Totalisator (BST) has been granted a monopoly over lottery products in the country, after a bill filed in January this year passed into law. This amendment to the 2012 Gambling Act was put forward by Valeri Simenov, a member of the National Front for Salvation Party, in January, and was ratified by the Bulgarian parliament on 7 February, then published in the country’s Official Gazette this week. This means that all private lottery operators will now have to pull their products from the market within three months, and must destroy all unsold lottery tickets and coupons by 31 December, 2020.

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Denmark: Regulator shuts down 25 illegal gaming sites in 2019

Denmark’s gambling regulator Spillemyndigheden has revealed that access to 25 sites were blocked as part of its efforts to stamp out illegal activity in the country in 2019. Working in partnership with the Danish Tax Authority, the regulator conducted a search of 502 websites. Ten were found to be operating illegally, prompting Spillemyndigheden to file court petitions to have internet service providers block access to the sites. These cases are all expected to conclude later this year. After expanding the scope of its search for potentially illegal content to include skin betting in 2018, 110 sites were reviewed in 2019, with closer investigations carried out for six. Petitions to have ISPs block access to 15 sites were filed in total.

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Finland: Minister hauls in Veikkaus bosses, demands probe into multi-million euro sweetheart deal

The Finnish Government’s state ownership steering minister Tytti Tuppurainen has called for an independent external investigation into the way state gambling firm Veikkaus hands out contracts. The move follows a report by Yle’s investigative journalism programme MOT in late January, which claimed that the gambling firm had signed a multi-million-euro deal without a competitive bidding process. MOT’s investigations revealed that Veikkaus agreed the deal to provide its core gambling system with gambling technology provider IGT in autumn 2018. The core gambling system operates Veikkaus’ sports and lottery games such as the weekly Lotto.

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France: New gambling regulator moves closer

L’Autorité nationale des Jeux (ANJ), has moved a step closer to replacing l’Autorité nationale de régulation des jeux en ligne (ARJEL) as France’s principal gambling regulatory body, following the publicaton of a decree setting out its key functions and responsibilities. A decree formalising the transition of power came into effect on 4 March, with ANJ to officially become the country’s new regulator once it meets for the first time. ANJ will act as a single body to oversee gambling in the country, including online gambling, casinos, horse racing in Paris and lottery games.

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Germany: Lawmakers approve new gambling regulations

A meeting of Germany’s heads of state in Berlin saw lawmakers approve gambling regulations to legalise online poker and casino from 1 July, 2021, as well as deciding on the location of the country’s new regulatory authority. The Glücksspielneuregulierungstaatsvertrag (GlüNeuRStv), which expands the nationally regulated igaming market beyond online betting for the first time, must now be ratified by each state parliament and submitted to the European Commission for approval before it can be brought into effect.

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Germany: Hesse receives 30 sportsbook licence applications

The Regional Council of Darmstadt, the Hessian body responsible for handling the federal sports betting licensing process, has revealed that 30 operators have now filed their applications. A spokesperson for the Council added that a further 20 had provided a serious expression of interest about joining the 30 in applying. This suggests a steady rise from January, when the Regional Council announced 11 applications, and a further seven expressions of interest. This in turn followed a warning, issued in December 2019, that unlicensed activity would not be tolerated, at a time when no companies had submitted applications or expressed interest in applying.

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Ireland: ‘State should be concerned’: National Lottery lobbied for change in law to prevent bookies taking lotto bets

The national lottery lobbied the government to introduce legislation that would prevent bookies being able to take bets on the outcome of lotto draws. In documents released to The Journal under the Freedom of Information Act, the National Lottery made a number of submissions to Minister for Public Expenditure and Reform Paschal Donohoe on the matter last summer and in October.

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Italy: Serie A pushes government to drop gambling ad, sponsorship ban

Italy’s top football league is asking the government to relax its gambling advertising rules to help the sport recover from the COVID-19 pandemic, while retail gambling operators are catching a viral tax break. On Thursday (19 March), authorities from the Serie A football league offered a series of suggestions to the Italian government regarding ways to help the sport recover from the current suspension of play caused by the COVID-19 coronavirus. Among these suggestions was scrapping the blanket prohibition on gambling advertising and sponsorships that the government announced in 2018 via the so-called Dignity Decree. The sponsorship ban alone, which took effect last summer, is projected to cost Serie A teams around €100m in lost revenue on an annual basis.

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Lithuania: Authorities agree new sports integrity pact

Leading government bodies in Lithuania have signed a new cooperation agreement to help fight match-fixing and move towards ratification of the Macolin Convention. The agreement was signed by Minister of Education, Science and Sport Algirdas Monkevičius, Minister of the Interior Rita Tamašunienė, Attorney General Evaldas Pašilis and Renatas Požėla, Commissioner General of the Police Department. The organisations that each of the four represent have been cooperating to help prevent match-fixing since 2015. In addition, Special Investigation Service (STT) director Žydrūnas Bartkus and director of the Ministry of the Interior’s Financial Crime Investigation Unit (FNTT) Antoni Mikulski signed the agreement as new parties in Lithuania’s anti manipulation efforts.

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Netherlands: Subordinate gambling regulations published

The Netherlands’ government has published regulations underpinning the measures set out in the Remote Gaming Act, with parliamentarians now able to submit comments on the proposed rules. The regulations set out in the Remote Gaming Decree establish how operators are expected to conduct business in the Netherlands, and the key conditions they must fulfil in order to secure a licence. Operators will be eligible for five-year licences, with Dutch gambling regulator the Kansspelautoriteit (KSA) to make a final decision on applications within six months of their submission. Licences will cover peer-to-peer casino games (such as poker), casino games where the players bet against the house, sports betting and betting on horse racing, and not online lotteries.

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Norway: NBO attacks TV ad ban plans

News that the Norwegian government has moved to finally close the loophole allowing offshore operators to advertise in the country has been greeted with dismay by the trade association representing these companies, Norsk Bransjeforening for Onlinespill (NBO). However, NBO Secretary General Carl Fredrik Stenstrøm added, while it was disappointing, it was not surprising. He argued in favour of a shift to a more liberal regulator model as opposed to attempting to maintain a monopoly for gambling. “[It is] disappointing that the authorities do not recognise the development we see in other countries where a license model has been implemented – where accountability is at the centre,” Stenstrøm said.

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Poland: Offshore market share declines

The Polish Ministry of Finance has revealed that the market share for so-called ‘grey’ operators fell to 18.5% in 2019, below the average across the European Union (EU). Based on data from industry analysts H2 Gambling Capital, the current EU average for grey operators stood at 26.5% in 2019. H2 based these findings on the average net revenue of such operators across EU countries. Poland classifies grey operators as those that are located outside of a country but offer online gambling to players inside the regulated jurisdiction, without regulatory approval.

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Poland: Polish Gambling Industry Requests Shift To GGR Tax

Poland’s industry trade association has petitioned the government to shift gambling tax away from turnover, alongside calling for changes to bookmaker terms and conditions and land-based casino limits. Trade group PIGBRiB filed a report with the Polish government recommending it replace the current 12 percent turnover gambling tax with a rate set at 20 percent of gross gaming revenue (GGR). Poland’s existing tax policy makes the country’s betting market unattractive for the majority of the world’s leading bookmakers, the association argues. (SUBSCRIPTION ARTICLE)

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Portugal: Tax arrangements a potential breach of freedom

The Portuguese tax regime for online gambling has been established by Decree-Law No. 66/2015 of 29 April. This regime offers different taxation rules among the diverse forms of gambling activities, namely in what defines the difference between land-based and online game providers. Since the entry into force of this Decree-Law, online gambling operators are subject to a special tax treatment, namely in the method used to calculate the tax. Online ‘fixed odds’ sports betting companies are subject to tax on their turnover – and the applicable tax rate – online gambling companies may be taxed at a maximum rate of 35% (as introduced by Portuguese State Budget Law for 2020). This special regime for online gambling activities creates an unfavourable framework for these operators.

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UK: Regulator issues £58.9m in penalties to Dec 2019

The Gambling Commission has collected £58.9m in financial sanctions and voluntary settlements over a five and a half year period between June 2014 and December 2019, according to the results of a public records request from the Gambling Business Group (GBG). Of these funds, the Gambling Commission has spent £756,997 covering their own costs in carrying out the investigations. A further £24m was repatriated to those who fell victim to illegal gambling activity and £34.8m was spent on “socially responsible purposes”.

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UK: Online gambling on the rise, in-play betting continues to fall

The UK Gambling Commission (UKGC) has released its latest gambling participation survey for 2019, which found that 47% of respondents had engaged in some form of gambling in the past four weeks, up one point from the 2018 survey. That number falls to 32% (unchanged) when you exclude those whose only gambling was on National Lottery draws. Online gambling participation was up three points to 21% in 2019, but this figure shrinks to 16.6% (+2.2 points) excluding online lottery-only participants. Those who gamble online are significantly more likely to do so via their mobile devices (50%, +6) than their laptops (38%, -6) or desktop computers (26%, -2).

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Market News

Danske Spil posts record profit despite falling gambling revenue
Finland Veikkaus revenue falls 4% as GGR lost to foreign operators
Latvia Latvia’s online gambling market sets revenue record in 2019
Spain Spanish market grows in 2019 despite Q4 decline
Sweden Swedish regulated gambling revenue reaches SEK24.8bn in 2019


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