Monthly Newsletter – October 2019

Europe’s monthly online gambling news

EU: EGBA’s Online Gambling Focus – Autumn 2019

As a new mandate of the European Union (EU) institutions begins, it seems appropriate to review the EU’s approach to online gambling in this Autumn edition of our Online Gambling Focus newsletter. Many of the concerns about online consumer protection in gambling are crossborder in nature and affect consumers regardless of where they live. But regulating a borderless online environment requires policies which are responsive, flexible, and borderless – that go beyond national borders to establish a more common European regulatory basis. These issues will be explored further in this edition and we’re delighted to be joined by Dr Margaret Carran of the City University of London who gives her perspective on the regulatory situation for online gambling in the EU and the implications of this for good regulation and ensuring a safe and consistent online gambling environment.

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EU: EGBA meets with European Commission and other stakeholders to discuss progress on MoU advertising and IPR

At the end of the 1-year assessment period, EGBA met with the European Commission and the other signatories of the memorandum of understanding (MoU) on online advertising and intellectual property rights to review progress in reducing the placement of advertising on IPR-infringing websites and mobile applications, under the ‘follow the money’ approach to IPR enforcement. The signatory businesses and associations agreed that the MoU has contributed to minimise the placement of such advertising and work should continue on the MoU. The Commission will publish a full progress report later this year. During the meeting, the Commission also praised EGBA’s efforts, mentioning that in the first half of 2019 there has been a 12% drop in the volume of ads by major gambling brands on IPR-infringing websites.

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EU: EU weighs new anti-money laundering body in wake of scandals

The EU is to explore the creation of a central authority to crack down on money laundering activity after a series of high-profile scandals have underlined Europe’s weaknesses in preventing dirty cash from flowing through its banks. The bloc’s finance ministers are expected to formally mandate the European Commission to make recommendations on a new “independent” enforcement body with “direct powers,” according to a draft statement to be endorsed when they meet in December. The body’s mission would be to police financial institutions’ compliance with EU rules on customer due diligence and other safeguards. The proposal would mark a significant ramping up of Europe’s response to a wave of money-laundering scandals over the past two years that have revealed ways for criminals to exploit the EU banking system.

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International: Europol and the International Olympic Committee join forces against match fixing

Europol and the International Olympic Committee (IOC) have signed a Memorandum of Understanding (MoU) to reinforce cooperation in the fight against corruption in sports. The agreements was signed during the annual International Forum for Sports Integrity, organised by the IOC in Lausanne, Switzerland. Corruption in sports degrades the efforts of athletes and the support of the public. It also brings important profits to organised crime groups which they then use to grow their other criminal activities such as drug trafficking, document fraud, money laundering and economic and financial crimes. To strengthen the global coalition against corruption in sports, in particular the manipulation of sport competitions, Europol reinforces its cooperation with the International Olympic Committee, one of the leading actors in the sport world.

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National developments

Belgium: Belgian online gambling operators will curb ads if National Lottery does

Belgium’s biggest private gambling operators have voluntarily agreed to halt most of their advertising efforts but want the government to force the state-run lottery to follow their lead. This weekend, the De Tijd newspaper reported that the five members of the Belgian Association of Gaming Operators (BAGO) – the Ardent Group, Betfirst, Golden Palace, Napoleon Games and the Kindred Group’s Unibet brand – had agreed to stop advertising via radio, television, newspapers, magazines, bus shelters and outdoor billboards as of January 1, 2020. Excluding Belgium’s National Lottery operations, the five BAGO members are believed to control roughly two-thirds of Belgium’s gambling market.

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Czechia: Czech Ministry of Finance defends gambling tax hike

The Czech Republic Ministry of Finance has defended its decision to introduce higher taxes on certain gambling activities, after a national newspaper claimed the increases would harm the country’s land-based market. The Ministry said income from the higher taxes will help support its efforts to protect people from gambling-related harm. From January 2020, a new structure will split taxes into three tiers, according to how harmful the government perceives the activity to be. Gambling tax is currently set at 23% of gross gaming revenue (GGR,) with the exception of gaming machines, which are taxed at 35% of GGR. Lotteries, live games and bingo operators will be taxed at 30% of GGR, up from the current rate of 23%, while the rate for fixed odds betting will rise from 23% to 25%.

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Finland: Competition authority – Veikkaus must take gambling problems seriously

The Finnish Competition and Consumer Authority has called on Finland’s state-owned, non-profit monopoly Veikkaus to take the problems associated with gambling seriously, and has recommended the firm introduce a number of changes to its operating procedures. Kirsi Leivo, Director-General of the authority, told Yle’s MOT programme that Veikkaus’ profits should be paid directly to the state, as this would be the simplest way to break Veikkaus’ links with the organisations and projects currently funded by revenue from gambling. “If the money went to the state budget, this would offer a clear solution for the beneficiaries,” Leivo said in an interview with MOT.

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France: France to launch new regulatory body ahead of FDJ privatisation

France has introduced new gambling regulations, including the creation of a new national gambling authority, L’autorité nationale des jeux (ANJ) to replace the current regulator, l’autorité nationale de régulation des jeux en ligne (ARJEL), ahead of the privatisation of lottery monopoly La Française des Jeux (FDJ). Currently, online gambling in France is regulated by ARJEL, while casinos, horse racing in Paris and lottery games are regulated by the Ministry of the Interior and Ministry of the Economy and Finance. Under the new regulations, ANJ will act as a single body to oversee gambling in the country. “The National Gambling Authority (ANJ) will become the main player in the regulation of gambling in France,” the country’s Council of Ministers said.

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Germany: German sports betting association calls for practicable and consumer-oriented regulatory overhaul

As the Minister-Presidents of Germany’s 16 federal states prepare to meet to discuss the future of gambling regulations, the German Sports Betting Association (DSWV) has urged a root-and-branch overhaul of the current framework. DSWV president Mathias Dahms said that with operators expected to adhere to the restrictive terms of the third amended State Treaty on Gambling until 30 June 2021, the market should be significantly expanded under the legislation that replaces it. Under the State Treaty, which was ratified in March, licence applications will be processed from January 2020. However, operators will be restricted to offering online sports betting, with no in-play, a €1,000 monthly spending limit imposed on players, as well as a 5% tax on turnver. Should its replacement fail to remove these restrictions, and legalise online casino games, the only beneficiaries would be unlicensed operators, with consumers put at risk, Dahms explained.

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Greece: Greek parliament passes gambling reforms

Greece’s parliament has passed a package of legislation designed to boost economic development in the country, which includes a bill reforming the country’s gambling laws. The gaming bill included in the Invest in Greece package will see operators permitted to continue offering Random Number Generator games, such as slots, something omitted from an earlier draft. This proposed prohibition of RNG games had proved particularly controversial, prompting operators to threaten a legal challenge against the ban. The final bill also lowers the licence fee to €3m, down from the original €5m, and sets a 35% gross revenue tax for licensees. A 20% corporation tax will also be applied before the 35% revenue tax is subtracted, in a move that strategic consultancy Regulus Partners said would effectively make legal avoidance of tax “impossible.”

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Ireland: Offline bookmakers get €50,000 betting tax relief

Bookies will get €50,000 a-year relief from the 2 per cent tax levied on betting in the Republic. In a bid to aid small independent bookmakers, Minister for Finance Paschal Donohoe introduced a relief from betting duty of €50,000 a calendar year. The move means that bookmakers will not have to pay tax on the first €50,000 in wagers that they take in a year. Mr Donohoe added that the relief was subject to EU state aid rules. The department’s tax strategy group earlier this year suggested bringing in a relief of €2 million a year to help smaller independent bookmakers compete against bigger chains such as Paddy Power, Boylesports and Ladbrokes. Mr Donohoe doubled the betting tax to 2 per cent last year. It is expected to yield around €95 million in 2019.

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Latvia: Gaming operators sign responsible gambling agreement

Five of the leading online gaming operators in Latvia have signed an agreement aimed at strengthening responsible gambling practices in the Baltic state. The operators, Paf (Pafbet), Betsafe, Optibet, and Feniksscasino, have pledged to improve their responsible gambling measures beyond what is currently required by Latvian law. The companies are all members of the Latvian Interactive Gambling Association (LiAB) and together claim a 90 per cent share of the Latvian online gaming market. “Among other things, we will introduce facilities for self-tests, deposit limits, the closing of specific game categories, proactive information on responsible gaming and a whole host of other measures,” said Paf Latvia manager Rihards Streikis.

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Malta: MGA publishes guidelines on the impact of the UK’s exit from the European Union

The Malta Gaming Authority (MGA) is publishing a guidance note on the impact of the UK’s Exit from the European Union in consideration of the United Kingdom’s exit from the European Union. The contents of the guidance note relate solely to regulatory affairs within the remit of the MGA, and operators should also be aware of ulterior consequences resulting from Brexit, including but not limited to data protection, immigration, employment, duty, and copyright considerations. The contents of this guidance note are of particular importance to entities established in Malta and operating in the United Kingdom, or entities established in the United Kingdom providing services and supplies within Malta, and it also details transitory measures in place for operators to ensure readiness and avoid regulatory disruption.

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Portugal: Over half of Portugal’s online gamblers still bet with international sites

Over half of Portugal’s online gamblers continue to bet with internationally licensed sites, despite their government’s effort to steer them to locally licensed options. On Monday, the Associação Portuguesa de Apostas e Jogos Online (APAJO) released the results of a national survey that showed 56% of 609 local online gamblers had made some form of wager with an internationally licensed online gambling site this year. That figure is significantly below a separate study by the Universidade Nova de Lisboa that found 75% of Portugual’s online gamblers had made a bet with an international site in 2018. That share was 10 points higher than a similar report covering 2017.

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Spain: DGOJ and tax agency sign new cooperation agreement

Spanish regulator Dirección General de Ordenación del Juego (DGOJ) and tax agency la Agencia Tributaria (AEAT) have renewed their partnership and signed a new cooperation agreement. Under the new agreement, the DGOJ will have access to updated data on operators’ tax compliance, the payments they make to the AEAT and the payments and withholdings related to State Lottery prizes. AEAT, meanwhile, will receive DGOJ data related to gaming accounts, to be used to fight tax fraud. The DGOJ said the data will allow the directorate to better manage the game environment. The agreement follows the initial partnership signed between the two in 2014 to “establish a general framework of collaboration.”

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Sweden: Swedish regulator to launch new AML reporting system

Swedish gambling regulator Spelinspektionen has unveiled a new system for licensed operators to report suspected money laundering and terrorist financing. Scheduled to launch on 13 January 2020, goAML will replace the existing DAR system that operators currently use, with Spelinspektionen saying that the new platform will help increase the quality of reports filed with the police. The goAML platform will open for registration on 9 December and licensees can sign up ahead of the January launch date, after which they will be able to begin filing reports. Registration is subject to approval from the police, but the regulator said that the process should not take longer than two days.

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UK: Gambling Commission pushes standards agenda to Maltese operators

Neil McArthur, chief executive of the UK Gambling Commission, has emphasised the need for standards to be raised among overseas gambling businesses targeting British consumers. Speaking at the ARQ Gaming Compliance Forum in Malta, McArthur highlighted three key strategic focus areas to drive the standards of the latter, stressing that “the MGA share our concerns”. This follows a study undertaken last year focusing on compliance standards of 123 online casino operators, which saw 45 told to submit an action plan to raise standards, 14 become the subject of further investigation, seven paid a total of £18m in penalty packages, five operators surrendered their licences and three PMLs were also given up.

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UK: GambleAware receives £5.4m in donations for Q1 and Q2

According to recent figures released by GambleAware, UK operators Bet365, GVC Holdings and William Hill have again topped the list of donations received by the industry charity, for the period between 1 April 2019 – 30 September 2019. The charity had received £5.4m in pledges and donations for Q1 and Q2 of this year, however this does not include funds received through regulatory settlements. GVC Holdings, the umbrella group for Ladbrokes and Coral, had pledged £1.46m to the charity while William Hill was recognised for a pledge of £1m. Bet365 was also commended for a donation of £868,000 during the period.

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UK: Gambling Commission issues reminder of expectations to licensees leaving the market

One of the principles of our regulation is that gambling should be fair and open. Through our work we aim to maintain public confidence in the gambling industry. Among other things, we expect licence holders to: Conduct their business with integrity; Maintain adequate financial resources; Have due regard to the interests of consumers and treat them fairly. We are aware that, from time to time, gambling businesses leave the British market. This may be for a variety of reasons, ranging from insolvency to personal retirement. We are aware that businesses have been taking a variety of approaches to dealing with their consumers in these situations, and we want to make our expectations clear.

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