Regulation of online gambling in Norway

Current status: At present all forms of interactive gaming via electronic channels are prohibited in Norway.

Current status

At present all forms of interactive gaming via electronic channels are prohibited in Norway. However the state controlled monopolies Norsk Tipping and Norsk Rikstoto may allow for players to participate in their terrestrial gaming activities via the internet.

Prohibition/criminalisation of payment transfers from Norway to overseas gaming sites … Continue Reading

Denmark to end gambling monopoly

Denmark submitted in July a draft law to the European Commission with provisions to end the gambling monopoly and to liberalise the sports betting and online casino game market.

After years of uncertainty, still-stand and legal disputes the Danish Government announced in April 2009 plans to end the gambling monopoly held by the State-owned organisation, Danske Spil, and to proceed with plans to liberalise parts of the gambling market in order to offer better protection to the players, avoid economic crime related to gambling and to guarantee future revenues for social causes.

In July a draft law was submitted to the European Commission for further scrutiny. Since a confidentiality clause was attached to the submitted draft law the details of the draft will not be public during the scrutiny period. Some information was, however, disclosed in a press release from the Danish Ministry of Taxation before the submission. … Continue Reading

High Stakes, Maximum Damage

published by By Ileana Grabitz, at 7 September 2009

Germany has excluded private operators from the gambling market – the industry is hoping for an EU judgement via Portugal

Berlin – Christian Kipper is usually a calm, level-headed man. However, when he has been talking about his business in the last few days, his voice has revealed an undertone of deep anger. The silver-haired man has been the head of the ARD television lottery, “Ein Platz an der Sonne”, for years. Almost half of its revenues go towards charitable projects. More than 1.3 billion Euros have been raised by Germany’s oldest lottery for women’s refuges, hospices and similar institutions since it was founded 53 years ago. But for some months now, the business has not been running as smoothly: Kipper complains that fewer and fewer tickets are being sold. The money, which he distributes amongst social projects, could therefore fall, in the medium term, by up to 30 percent.

What has really caused Kipper’s mood to darken is the so-called Interstate Treaty on Gambling which has protected the state monopoly on operating games of chance since the beginning of 2008. The German Federal Constitutional Court declared the monopoly to be fundamentally acceptable in 2006 – however, this was on the condition that the state operators effectively combat the gambling addiction present amongst German citizens. The Treaty has been the subject of considerable controversy for some time, especially amongst private gambling operators for whom the basis of their business was swept away by the Treaty virtually from one day to the next.

Since then, opposition voices have grown louder, also amongst many state gambling operators who are supposed to be benefitting from the monopoly. The reason for their resentment is primarily the strict advertising and marketing regulations which the legislator has issued in order to extend the battle against gambling addiction. “The regulations make it extremely difficult for us to reach the public”, complains ARD lottery chief, Kipper. It is allegedly the good causes which suffer most. The fewer tickets are sold, the more funds are lost which would otherwise have been allocated to charitable projects.

Kipper’s words apparently apply to large parts of the industry. Taking the information provided by the German Lottery Association (Deutscher Lottoverband), the situation after 20 months of the Interstate Treaty on Gambling looks more than bleak. The latest figures, available to the WELT, show sharp falls in revenue across the gambling market. According to the Lottery Association, earnings are 30 percent down on 2005 levels. This means that the respective taxes and earmarked funds which the gambling operators pay to the Laender have also dramatically declined. In 2005, the German Laender collected nearly five billion Euro from the gambling sector; in the current year, estimates put this figure at a maximum of 3.5 billion Euro. Even if revenue levels stabilise, the Laender stand to lose in excess of six billion Euro by 2011.

FDP Member of the Bundestag, Detlef Parr, comes to the point, “The Laender are harming themselves with the disproportionate regulations stipulated in the Interstate Treaty on Gambling.” The drop in revenues in the gambling market ultimately leads to the Laender having fewer means available for public needs such as cultural or sports projects. The Laender have traditionally been amongst the greatest beneficiaries of gambling: up to 40 percent of lottery revenues flow into their coffers in the form of taxes or earmarked funds. In the case of casinos, the contributions vary from Land to Land by as much as 40 to 80 percent. It therefore comes as no surprise that now criticism of the Interstate Treaty on Gambling is growing and from within ever larger political circles.

However, the political wheels turn slowly. We currently find ourselves in the midst of an election campaign – thus critics of the Treaty are today pinning their hopes on salvation ultimately coming from Brussels. The EU Commission had already instigated contractual infringement proceedings against Germany shortly after the Treaty came into effect at the beginning of 2008 because they considered the new Gambling regulations to be incompatible with EU law. However, it has gone quiet on this front.

A European Court of Justice decision, expected tomorrow, could at least shed some light on the matter. The case is about Portugal. The opponents of the current Gambling regulations hope that a clear ruling from the Luxemburg judges may also serve as a precedent case for Germany. In the present case, the Portuguese authorities imposed high fines on the private sports betting operators Bwin and the Portuguese Football League because they had offered online betting and advertised such offers. There exists a statutory monopoly in internet betting in Portugal. The ECJ now has to decide whether the monopoly can be reconciled with community law. If the court comes to the opinion that the Portuguese approach does not conform with EU law, the current private operators of internet lotto and internet sports betting can hope that the Luxemburg court will later also decide in their favour.

Certainly, a rethink of the current situation would be welcome. Expert opinion is that a state monopoly has a further, tragic consequence for society as a whole: drastically reduced gambling revenues and the related tax deficits, which are hard for federal government and for the Laender to bear, are only one result, says Friedrich Schneider, Professor at the Johannes Kepler University in Linz. More importantly, the state gambling monopoly costs many jobs and thus fuels a massive rise in the black economy. One example: only last week, the North German Class Lottery (Norddeutsche Klassenlotterie, NKL) announced that it has been forced to cut one fifth of its workforce in order to cope with the losses in revenue of the previous years.

Press release ‒ Conference of FDP parliamentary party leaders, 3 September 2009 in Berlin FDP calls for reform of the Interstate Gambling Treaty. Experts in the fields of addiction, economics and law all opposed to Internet ban

published by Claudia C. Lang, Press officer of the FDP faction of the Lower Saxony federal state parliament

The discussion on reform of the gambling market was reignited at the conference of FDP parliamentary party leaders, who this time cast their sights abroad. International experts in the fields of addiction research, economics, gambling regulation and law came together on Thursday in Berlin for the conference, entitled “The impact of the Interstate Gambling Treaty – consequences of the monopoly and opportunities for liberalising the gambling market.” The purpose of the event was to draw attention to the consequences of the Interstate Gambling Treaty and to evaluate new, alternative models in place in other EU countries.

On paper, the state monopoly on gambling serves to protect players and was achieved by way of a general prohibition of Internet gambling. Jörg Bode MdL (Member of the Landtag), chairman of the FDP faction of the Lower Saxony federal state parliament and the event’s patron, is opposed to the current ruling and, in view of the ongoing evaluation of the Interstate Gambling Treaty, has demanded an in-depth study into the impact of the Treaty.

Detlef Parr MdB (Member of the Bundestag), the FDP Bundestag faction’s spokesperson for sports affairs, addiction and illegal drugs, also recognises the need for reform and has called for the Interstate Gambling Treaty to be terminated ahead of schedule by the Federal States, so that suitable reform measures can be brought in without delay, decriminalising Internet games such as sports betting and online poker for players and organisers, while continuing to protect players and simultaneously securing funding for good causes.

Dr. Wulf Hambach, partner of gambling law specialists Hambach & Hambach, pointed out that the aims were identical to those pursued by other countries with more liberal models in place. He explained that the objective of establishing an attractive, controlled and regulated gambling market had been thwarted by the German Internet ban, since online players were being driven to the black market. In particular, the legal aims pursued by the Interstate Gambling Treaty (namely combating addiction and associated crime, and channelling players’ desire to play) are compromised by an Internet ban. He went on to say that Germany was alone in adopting such a model, since Internet gambling is permitted by law in 21 of the 27 EU Member States and is regulated, or at least tolerated.

Specialist lawyers from France (Thibault Verbiest) and Italy (Quirino Mancini) and legal advisers from Norway (Rolf Sims) and Gibraltar (Phill Brear) presented the models adopted by their respective home countries to the audience and offered advice on reform. Quirino Mancini, lawyer and partner of Sinisi, Ceschini, Mancini & Partners Law Offices, put forward the view that Germany ought to introduce a uniform supervisory authority and policy, since separate policies for each individual Federal State are simply not workable in practice. In particular, he highlighted Italy’s leading role in regulating online poker, where the game is classified as a game of skill and thus permitted by law.

Behavioural scientist Prof. Iver Hand (director of the player project Verhaltenstherapie Falkenried MVZ GmbH) criticised the over-use and consequent trivialisation of the term “compulsive gambling”. He said that the typical warning given, “gambling can be addictive”, was more reminiscent of an advertising slogan. Committing to the concept of compulsive gambling blocks any funding for behavioural research, although behavioural disorders cannot simply be lumped together with physical dependencies such as alcoholism. He added that psychotherapeutic training was an essential requirement for successful treatment, and that all therapists employed needed to receive adequate sponsorship and training, a path that as yet remains untrodden in Germany for political reasons.

Prof. Friedrich Schneider analysed the drop in turnover in the public gambling sector in 2008 (between 12% and 30%), as well as the simultaneous growth of the black market. He pointed out that those who are intent on gambling on the Internet will not be deterred by a written ban, but will continue to do so. The associated loss of jobs, tax revenue and added value for the German economy due to lack of advertising revenue led him to urgently recommend at least a partial liberalisation.

In the concluding panel discussion, the consequences described above were discussed with Wolfgang Angenendt, representative of the Deutsche Toto- und Lottoblock (the association of federal state lottery companies), and Christian Kipper, executive director of the ARD Fernsehlotterie (television lottery). Wolfgang Angenendt qualified the drop in turnover and said that he sees no alternative to the current monopoly, due to the rules laid down by the Federal Constitutional Court. Mr Kipper criticised the advertising restrictions and the prohibition of Internet sales, which he said seriously compromised numerous charitable projects supported by the ARD Fernsehlotterie. As a result, he said, the dual aims of “helping and winning” can no longer be communicated and particularly younger members of the public for whom the Internet is a primary sales medium cannot be reached as a result of the ban.

By way of conclusion, Detlef Parr MdB explained that emergency reform on a national level would be required if the necessary steps are not taken at the Federal State level. He said that a reform of this kind was conceivable for both sports betting and online games such as online poker, so that members of the public are no longer persecuted by bans and driven to crime.

For the FDP, so much is certain: The Internet ban included in the Interstate Gambling Treaty is a dangerous path for Germany to go down, due in no small part to its ineffectiveness at combating addiction and the fact that it puts charitable projects such as those supported by the ARD Fernsehlotterie and professional and amateur sport at risk. Consequently, reform and alignment to EU standards are desperately needed.

Press officer:
Claudia C. Lang
Press officer
FDP faction of the Lower Saxony federal state parliament

Tel.: +49 511/30 30 4302
Mobile: +49 173/37 06 567
Claudia.Lang@lt.niedersachsen.de

Ladbrokes wins case against Danish monopoly

Ladbrokes has won a case against the Danish Monopoly, Danska Spil, in the Maritime and Commercial Court in Copenhagen.

The verdict means that Ladbrokes can continue to use the words Danska spil in its advertising, and confirms that the Danish monopoly has no exclusive rights to the use of these words professionally.

The Danish company had filed a lawsuit against Ladbrokes claiming a breach of primary trademark and marketing law in connection with Ladbrokes’ “Danish game, English odds” TV advertising campaign last year. It claimed that Ladbrokes had improperly used the Danska Spil trademark – and that only Danska Spil can use the word combination “Dansk” and “spil” for commercial use in advertising and marketing. According to Ladbrokes, the Court refused Danska Spil’s request for compensation.

With ruling going in its favour, Ladbrokes said it will continue to highlight the disadvantages of monopolies in this sector and promote free and fair competition from regulated operators to the benefit of consumers.