Online gaming industry calls for European cooperation in responsible gaming

Key stakeholders from across the online gaming industry spoke with one voice at the inaugural “Responsible Gaming Day‟ event at the European Parliament on 17 April, calling on the EU for greater cooperation to ensure a safer and more secure online gaming environment for consumers.

The event, the first of its kind to be hosted at the European Parliament, saw a number of MEPs, the EU Slovenian Presidency, regulators and academics join leading industry representatives to exchange best practices and knowledge in the field of responsible gaming.

Norbert Teufelberger, Chairman of the European Gaming and Betting Association (EGBA) said: “No matter how much we do, no matter how many rules we put into place, and no matter how good we are – no solution will be optimal if it is not inclusive and based on the full cooperation and commitment of all stakeholders.”

Christofer Fjellner, MEP (EPP-DE, Sweden) added, “The key ticket to entering national markets is consumer protection. Using this as an argument to protect monopolies is simply letting consumers down.”

Protection of minors was also a key focus of the conference discussions. Andrew Poole, Managing Director, GamCare commented: “There needs to be shared responsibility to minimise underage gaming. Consistent regulation across jurisdictions and proper education are key in achieving an effective industry-wide response to underage gaming.” This view was echoed by Leon Thomas, Head of Regulatory Compliance at PartyGaming who stated “We want governments to help us help consumers.”

The event also featured academia specialised in gaming and betting behaviour research who emphasised the need to use scientific research rather than conjecture when talking about online problem gaming. Richard LaBrie, Ed. D. Harvard Medical School commented: “The advantage of online gaming is that you can track data in real time rather than relying on self reports, which may lack reliability.”

Source EGBA press release. For more information www.ResponsibleGamingDay.eu

Update on Irish Casino Committee Report

The long awaited Irish Casino Committee Report appears to be finally nearing publication and may be published within the next few weeks, LK Shields report.

Update on Irish Casino Committee Report

The long awaited Irish Casino Committee Report (the ‘Report’) appears to be finally nearing publication and may be published within the next few weeks.

Publication of the Report

It is understood following our conversation with a spokesperson in the Irish Department of Justice, Equality and Law Reform that the Irish Minister for Justice, Equality and Law Reform, Brian Lenihan was ready to publish the Report and formally announce the establishment of an informal all party committee charged with the review of the Report. However, the recent announcement, by An Taoiseach (Irish Prime Minister), Bertie Ahern that he is to step down as Taoiseach and as leader of Fianna Fáil on 6 May 2008 has resulted in a slight delay in the publication of the Report. Brian Cowen, the current Minister for Finance and Tánaiste (Irish Deputy Prime Minister), will be elected Taoiseach on 6 May 2008. As with any Taoiseach’s election, there will be a reshuffle of certain ministries and it is currently unclear whether Minister Lenihan will remain in his current post. Until that reshuffle is announced, it is unlikely that the Report will be published.

Broader Terms of Reference for the Informal All Party Committee

The Irish Casino Committee was tasked with preparing a report on the regulation of casino style operations in Ireland. However, it is expected that the Report will cover many different areas of gaming and gambling in Ireland including fixed odds betting terminals and internet gambling. The informal all party committee which the Minister for Justice, Equality and Law Reform will soon announce is expected to be given broader terms of reference. We understand that the position has shifted from ‘how best to regulate casinos in Ireland’ to ‘how best to regulate gaming and gambling in Ireland’. Comment It this is the case, this new position is very much to be welcomed. The main legislation in Ireland governing gaming and gambling has not been substantially overhauled since the middle of the last century. It does not address modern technological developments. Attempting to navigate and interpret such legislation is difficult and indeed frustrating for both existing operators and new operators considering entering the Irish marketplace. No doubt, clarity on the area will be welcomed by all in the industry. However, it looks like the timetable for progress is somewhat uncertain for the moment.

For further information, please contact

Áine Matthews amatthews@lkshields.ie or

Deirdre Kilroy dkilroy@lkshields.ie of the

Gaming and Gambling Unit of LK Shields Solicitors in Dublin or by telephone on +353 1 661 0866.

April 2008.

France: update on the liberalization of the gaming and betting market

Opening of the French online gaming and betting market: the presidency has not yet decided on the “hows”, but the process is now irreversible.

1. Durieux report

Mr Sarkozy declared it publicly a few weeks ago: France will open its online gaming market. The process has thus now become irreversible.

At the beginning of this month, the report issued by Mr. Bruno Durieux on the opening of the French online gaming market was given to the Prime Minister, Mr. François Fillon, and to the ministry of budget, Mr. Woerth. The President of the French Republic, Nicolas Sarkozy, is due to “validate” it in a near future.

2. Exclusion of lotteries and gaming machines

The online opening would only concern the online sports betting, casino and poker sectors. Lotteries and gaming machines would apparently be excluded from the scope of the opening.

3. Operators are preparing to enter the market

Big European and French groups such as TF1 are preparing for the opening of the market. Capital risk funds and investment companies focused on the online gaming industry are being created in France, getting ready to move in. Partouche and Barrière, the two main casino operators have already been granted licences respectively in Gibraltar and Malta.

4. Partnership with EU members

According to public declarations made to the press by the budget ministry, Mr. Woerth, France will work on the legal framework of the reform in partnership with some of its European partners (Finland, Germany, Belgium, Netherlands, etc.). A first meeting is envisaged at the end of April.

5. Interdepartmental structure

Moreover, a new interdepartmental structure should be created with the mission of granting licenses to online gambling operators. Authorized online gambling operators will have to meet very strict requirements relating to money laundering and addiction of players in order to be granted a licence.

6. Scientific study

A scientific study will be carried out during two years with the purpose of gathering reliable information on these subjects (fight against money laundering and protection of players).

7. “Regulated and controlled opening”

In an interview to the daily newspaper Le Parisien, Mr. Woerth indicates that, together with Mrs. Michele Alliot-Marie (Minister of Interior) and Mr. Michel Barnier (Minister of Agriculture), he will propose to the President of the French Republic and to the Prime Minister to set up a regulated and controlled opening of the online gambling market.

Mr. Woerth expresses several recommendations in connection with the opening of the French gambling market:

• Horserace betting

 Mutual betting system only (and thus exclusion of fixed-odds betting and bookmakers).

 Players will have to participate to the financing of the State and of the equine sector.

 The horserace betting market should be opened in two successive stages:

First stage: Private operators should be authorized to distribute horserace betting. In this case, PMU retains exclusive rights to organize horserace betting in France and private operators should be approved and have a license.

Second stage (eventually): Private operators are authorized to organize horserace betting. In this case, private operators should be subject to the same requirements and tax treatment as for PMU.

• Sports betting

 Opening of the sector but with a limitation of the forms of sporting bets. The bet must be related to the performance of the athlete. Other bets disconnected from sports (e.g. a bet relating to the color of the tennis player’s eyes), should be prohibited.

 The rights of the organizers of sports events will have to be addressed.

• Casino games

 Blanket prohibition of online slot machines (insofar as they represent a danger in terms of addiction).
 Possible opening to the poker and the other traditional casino games.

Taxation

Concerning taxation, the question remains open. Mr. Woerth simply states that the system will have to preserve the financial resources of the State and of the equine sector.

8. Timetable

According to Mr. Woerth, the schedule of the opening belongs to the President of the Republic and to the Prime Minister.

Moreover, he believes that France should not rush into the opening of the market, which could be effective in 2009 or at the beginning of 2010. The Ministry for Budget is much worried about the general budget of the State and thus is less inclined to open the market shortly.

However, Mr. Woerth’s position is not shared by all in the government and especially not by the French President who seems more favorable to “speeding up” the process, especially for reasons relating to the financing of sports.

The question of setting up of a transitional period in between now and the opening, whereby operators could start offering their services on a contractual basis with the government, is also on the agenda but has not yet been decided upon.

Operators are indeed eager to be granted as soon as possible for a limited period of time and have suggested contributing financially to a sports fund. Sponsoring deals with major football clubs are indeed a major concern for operators such as Bwin.

It is expected that the weeks to come will show more visibility on the exact method France intends to use in order to regulate the transitory period.

German Online Casino Looks To Loophole in Internet Gambling Ban

by James Kilsby, GamblingCompliance Ltd., April 8th, 2008

A Casinos Austria-owned online casino will soon begin to offer its games to residents in the German state of Lower Saxony following a court victory last week, despite the general prohibition on internet gambling in Germany under the Interstate Treaty which came into force in January 2008. The Treaty’s draconian provisions may mean the internet casino is short-lived, but its very existence could further undermine the already maligned Treaty, say legal experts.

Rainer Chrubassik, managing director of Casinos Austria’s Spielbanken Niedersachsen GmbH (SNG), says that SNG has begun preparations for the launch of a full suite of online casino games following the decision by the Higher Administrative Court of Luneberg last Thursday. The court rejected an attempt by the state of Lower Saxony to appeal a decision issued in August of last year which upheld SNG’s right to offer internet casino gambling in the state.

SNG was acquired by Casinos Austria International in 2005 and currently holds a licence to operate the 10 land-based casinos in Lower Saxony. The terms of that licence also include the possibility of offering online casino games, but state authorities have refused to grant SNG final permission to proceed.

The court last week agreed with SNG that the law applicable at the time of SNG’s application did not impose any prohibition on internet gambling services in Germany, and that Lower Saxony therefore had no right to deny SNG authorization to develop an online casino. However, the ruling did not take into account the Interstate Gambling Treaty which came into force on January 1, 2008.

The Interstate Treaty establishes a general prohibition on the use of the internet for all forms of gambling in Germany (except horserace betting) but was not at issue in the SNG hearings as the Luneberg court received Lower Saxony’s reasoning before the treaty came into effect, says Claus Hambach, founding partner of Munich-based law firm Hambach and Hambach.

Therefore, it remains possible that Lower Saxony could launch new proceedings against the online casino website, he said. Alternatively, the court may decide that it has already issued a definitive ruling on the SNG case and refuse to hear a new challenge.

“It is hard to predict what will happen as offering an online casino definitely breaches the wording of the Interstate Treaty, but SNG could not be subject to criminal law as it is in possession of a valid state licence,” Hambach told GamblingCompliance.

SNG said in a press release that it expected to be permitted to operate regardless of the new treaty as applicable gambling legislation in Lower Saxony specifically “permits the operation of an online casino for and in the state of Lower Saxony.” SNG is only permitted to offer its online casino games within state borders.

The case of those looking to overturn the new treaty will be strengthened if SNG is able to launch its own, legitimate internet casino within Germany, according to Hambach. Certain online gaming websites, including the state-owned Wiesbaden online casino and Irish bookmaker Paddy PowerPortfolio have already withdrawn from the German market as a result of the new treaty. But even though the treaty has sought to outlaw internet gambling, conflicting court rulings have allowed operators such as Bwin e.K., which has an old GDR sports betting licence, and now possibly SNG, to continue in operation.

“Everywhere we have these small islands where the authorities cannot enforce the new treaty, which suggests it will not be possible to achieve interstate treaty’s stated aims,” Hambach said.

According to Chrubassik, it will be impossible to maintain a blanket ban on internet gambling in Germany, and the state treaty’s player protection aims would be better served by regulation.
“It is impossible to implement a ban on internet gaming sites. The clock cannot be turned back on the reality of the internet,” he said. “Only licensed internet gaming sites can meet regulatory channeling requirements and prevent players from turning to illegal, unregulated sites. [SNG] are committed to these requirements.”

Sands’ ‘cyber dive’

Billionaire Sheldon Adelson is banking on his organisation’s reputation by venturing into the new realm of nternet gambling. The hope is his move will reap huge dividends for LVS’ offshore i-gaming operations. But with foreboding US regulation,the future seems murky.

First Publication : Macaubusiness – April 2008 – by Marlene Prendeville in Las Vegas