Casino Enterprise Management

Germany
Germany Revises Gambling Laws
Germany’s gambling laws are once again in the EU spotlight with the world’s largest Internet betting exchange, Betfair, claiming that Germany’s revised gambling laws are too restrictive and are still in contravention to EU directives regarding the free flow of trade between member nations. Currently, the German online gambling industry and the state-controlled monopoly over gambling is protected by a 2008 gaming law. The law prohibited offshore betting companies from operating or advertising their services in Germany, and also allowed for the blocking of IP addresses and financial transactions with e-gaming companies.

While Germany is seeking to relax its control over gaming, previous proposals put forward to the EU in 2011 were strongly rejected by the EU as too restrictive. These proposals allowed for the granting of seven licenses to run sports betting and also placed a steep 16 percent turnover tax on licensed sports betting companies. In November 2011, the German government redrafted its gaming laws by lowering the tax rate to 5 percent and increasing the licenses from seven to 20, but online casino gaming and poker would be prohibited.

According to an article published in the Financial Times, this has not been sufficient enough for Betfair, who has complained to the European Commission that Germany’s new gaming laws are still too restrictive. Interactive offshore sports betting companies are keen to expand their operations into the potentially lucrative German sports betting market, which is worth an estimated €5 billion a year.


Europe     
EU Passes Resolution on Online Gambling
In 2011, the European Union published its highly anticipated green paper on online gambling in the EU. The paper revealed that there was still deep division among EU members over the issue of online gambling. As online gambling can cross borders and rules on gambling differ between member states, the green paper showed that the EU needed to provide a framework that provides for adequate state supervision of the industry, but must, at the same time, protect the rights of companies to offer their services freely across member nations.

After the paper was published, the issue of online gambling was debated by members of the Committee on the Internal Market and Consumer Protection of the European Union. Then in November, the EU voted for a resolution addressing the issue. While recognizing the fact that there is “no specific European legislative act regulating online gambling,” the resolution states that member nations need to work more closely to regulate against illegal gambling, money laundering and gambling addiction. It also states that online gambling “may involve a greater risk of addiction than traditional physical, location-based gambling, owing to increased ease of access and the absence of social control.”

In what some insiders have seen as a step forward, clause 20 of the resolution urges the European Commission to “to act swiftly upon receipt of complaints about violations of the freedoms enshrined in the treaties.” However, member of the European Parliament, Ashley Fox, saw the bill in a very different light, stating that it actually seeks to protect state monopolies on gambling. According to Fox, who represents Gibraltar and Southwest England, the bill was a “missed opportunity” and ignored the reality of online gambling. According to Fox, “online gambling is already big business in Europe, with a volume in excess of €10 billion. MEPs have failed to spot the benefits and opportunities that a more open marketplace for gambling would have for economic growth.”

Spain    
Spanish Lottery Opposes New Gaming Act
As previously reported in May 2011, the Spanish Senate approved a wide-sweeping new gambling act. The act was designed specifically for the purpose of regulating the online gambling industry and imposes a 25 percent tax rate on gross profit. It also creates a new regulatory body, which will be responsible for awarding licenses and monitoring the industry. The act allows online gambling companies to promote themselves in the media and via sporting events.

Although the new act has met with a generally positive response from those involved in the industry, the Spanish Lottery has expressed its opposition to the new law stating that the new law will adversely affect its profits. Lotteries are hugely popular in Spain, and its Christmas Lottery (El Gordo de Navidad) is the world’s biggest lottery with around three-quarters of the adult population taking part in it every year. The government also runs another lottery called the ONCE Lottery. The proceeds of the lottery are destined to the Spanish Organization for the Blind (Organización Nacional de Ciegos Españoles). Its most well-known product throughout Spain is the so-called “Cupón.” Sales of this lottery product are the main source of income for ONCE, and draws for different coupons are run throughout the week.

According to a spokesman from the ONCE Lottery, the inevitable growth of online gambling in Spain in the wake of the new act will “cannibalize” the profits made by the lottery, which are destined to charitable causes. Despite these protests, the first licenses are expected to be issued in the first months of 2012, and some of the world’s largest interactive gambling companies now look set to launch themselves in the Spanish market in the coming months. It is estimated that once the online gambling industry in Spain is fully regulated, it will record revenues of around €200 million per year.


Greece     
Betting Interest Groups File Complaint Against Greek Gaming Laws
The European Gaming and Betting Association (EGBA) and the Remote Gambling Association (RGA), have filed a formal complaint against Greece’s new gaming laws. This is not the first time that Greece’s gaming laws have caused controversy. In June 2011 when the Greek government first submitted its new gaming legislation, it was criticized by the European Commission as being too protectionist and putting foreign operators at an unfair advantage. Despite these criticisms, in August 2011 the Greek Parliament voted in favor of a gambling law that still retains many restrictions and puts in place a 30 percent tax on GGR.

According to a joint press release issued by the EGBA and RGA in November, the new law places “unnecessary and unjustified economic burdens on new operators, such as forcing them to have a permanent establishment in Greece and limiting financial transactions to Greek banks. The law also imposes a higher age limit for online than offline gambling with no justifiable evidence to support that restriction.”

Both organizations are also concerned that taxes on any revenues earned from Greece-based customers will have to be paid retroactively from Jan. 1, 2010, until any new licenses are granted. At the same time, the law seeks to protect OPAP, a public Greek company that exclusively operates and manages offline lottery and sports betting games, as it extends its license by another 10 years from 2020 to 2030, and currently pays no gambling tax.

According to Sigrid Ligné, secretary general of the EGBA: “Commissioner Barnier recently confirmed to the European Parliament that the he would fulfill his responsibilities seriously in assessing the compliance of member states gambling legislation with EU law. Allowing Greece to proceed with this legislation unchallenged would represent an abject failure of those responsibilities. We trust the commissioner will urgently investigate our compliant against Greece and take action accordingly against Greece as well as on several other pending complaints.”


James Marrison has been covering the casino industry in Latin America for over seven years and has written in-depth features on every country in the region. Marrison has worked as a research contributor for Global Betting and Gaming Consultants and serves as a consultant for industry professionals for the Gerson Lehrman Group. Marrison is also a researcher into the online gaming markets in Europe.