We recently reported on the Bwin / Portuguese Professional Football League’s case against Santa Casa da Misericórdia de Lisboa in the European Court of Justice. You will remember that the result of the case wasn’t exactly an optimistic one for the online gaming industry in Europe, with the ECJ throwing the case out of court. We also wrote a lengthy article on the implications of the ECJ’s reaction to the case for the online gaming industry within Europe, which you can read here.
Despite this doom and gloom coming from the European legal hub, this summer has brought good news to the online gaming industry within individual member states of the European Union.
The Italians have been restructuring their governmental approach to the online gaming industry over the summer. This 3 phase push towards legalisation and licencing is a likely a result of a combination of factors. Ideas for liberalising and increasing the licencing of the domestic gambling market had been raised back in 2006, but the global recession and the Italian governments need to balance its failing budget speeded up a process which would normally have been hampered by red tape and bureaucracy.
The earthquake L’Aquila that took place in central Italy earlier in the year was the straw that broke the camel’s back, in terms of speed and immediacy of action. L’Aquila sparked a governmental emergency decree on 28 April – called the Abruzzo Decree, which became law on 24 June. Amidst the lengthy chapters of the Abruzzo Decree, appeared many exciting new regulations regarding the gaming industry. There were four main components to the Abruzzo Decree which had a massive and direct impact on the online gaming industry. The Decree; legalised online games of chance with fixed odds – i.e.: casino games and Vegas style games, it legalised online poker and ring games, it set up a mandate for the Italian gaming regulatory authority (the AAMS), that within 60 days of the decree being passed, that they would regulate the betting exchange, video lottery games and virtual events. Additionally, the Abruzzo Decree introduced a profit based taxation scheme, whereby a 20% tax would be applied to all new games other than video lottery games.
Another emergency decree that was published in the Official Gazette of Laws and Regulations meant opening up current licencing legislation even further. The Anti-crisis Decree was an attempt to open up the licencing laws to increase governmental revenues. Article 21 of the decree opens up the national lottery tenders to 3 more potential licencees when the current one national licence expires in 2010. This means that the Italian state-run monopoly on the national lottery will end in 2010, and is of course a move in the opposite direction of travel of the Portuguese government, who are still looking to maintain and protect their state-sanctioned (to all intents and purposes state-run) lottery monopoly . Though there will be many small print technical requirements attached to these new licences – it obviously means that the monopoly will end, promoting a competitive and open market.
Whilst the state is relinquishing control in one area – it looks set to simultaneously become more intrusive in another. The Anti-Crisis Decree also requires that the AAMS creates a centralised system of bet authorisation whereby the 10 operators currently holding video lottery games licences remotely connect the terrestrial network of slot machines to the AAMS system and the centre. The AAMS will in the future charge a licencing fee of E15,000 per video lottery game connected to operators of such games, and open up the licencing to include both national tenders and those from members of the European Economic Area…
The final push towards the liberalisation of Italian gaming laws came in the form of Law 88/09, made on 7th July, coming into effect on 29 July 2009. This law appertained to remote gaming regulations – for online, mobile phone and interactive TV gambling. According to the stipulations of the Law, remote gaming licences are to be issued on a 9 year basis at a cost of E350, 000 payable upon licence issuance. The areas of fixed odds games of chance (i.e.: online casinos) online poker and other cash games, virtual events and betting exchange gambling will be added to the collection of gambling applicable for remote gaming licencing requirements, which will of course add millions of Euros to the government’s pot. Once again, countries that will be able to get these licences will be the EU plus Iceland, Norway and Liechtenstein – i.e. - the European Economic Area.
Whilst liberalising licencing for gaming and online gaming in Italy, the new laws have also become more specific and prescriptive for anyone not complying with these laws – for example, those providing online gaming services without holding the correct licence could be sent to jail for 6 months to 3 years.
What the Italians are doing here is vastly increasing their taxable revenues and increasing revenues through the issuing of costly licences. Simultaneously, they are maintaining a tight control on online gambling via the full and real time connection with the centralised AAMS system. This “moderator” requires that service providers are permanently connected with it in order that it can validate any bets as they come in. It also means that all bets can be monitored and recorded – making the taxation of online gaming companies more efficient and accurate. It’s a well thought out system whereby the legal framework has been opened up to increase the market’s supply of gambling services whilst simultaneously imposing structures which will help to regulate and monitor the increased ‘flow’ of gambling, thus maintaining the governments position of practicable authority and control with regards to the law, revenue collection and social responsibility.
This liberalisation of gambling laws has been reflected by many other governments around Europe over the summer 2009 to date. Germany seems keen to drop the state monopoly on gambling in favour of liberalisation. The State of Schleswig-Holste in Germany last month put forward a plan calling for the abandonment of the Interstate Treaty on Lotteries (ITL) gambling treaty between all of the 16 German states, which practically speaking outlawed online gambling.
Meanwhile, the French National Assembly voted to approve the Draft French Gambling Bill back in mid October. With a 302 to 206 majority of votes it passed on to the French Senate for further debate. The French are looking to replicate aspects of the new Italian gambling laws with some major differences – filtering out of “illegal” online gaming providers, being one of them.
So, all in all it’s looking pretty positive for online gaming in various countries within the European Community. The constitutional / sovereignty debate did put a dampner on September’s ECJ case featuring the Bwin / Portuguese Professional Football League’s case against Santa Casa da Misericórdia de Lisboa with regards to the structure and framework of the E.C. as a whole and its ability to support the online gaming industry. However, the good news for the online gaming industry is that there was always the option of individual member states to create laws / expand legislation to make legal room for the industry. The E.C. cannot create laws to which member states must adhere in this area (as member states already have their own differing approaches to the subject), however, member states can decide to make legal room for the online gaming industry on an individual basis. The more member states that do this, as per Italy, Germany and France, the more likely it is for a common approach to develop, as one country emulates another’s general approach and attitude towards the online gaming industry.
Of course, together these individual member states may be leading the European Community’s horse to water, metaphorically speaking - but they can’t make that horse drink. Does it really matter though - as long as that horse (the EEC or the ECJ maybe) is at the water (a place of positive acceptance of online gaming and not advocating state run monopolies, for example) - does it really matter if it drinks or not (whether there is a common constitutional legal European framework?).
This entry was written by Nena on Monday, November 23rd, 2009 at 10:17 pm and is filed under Articles.
