OPINION - GEORGE M. MANGION | Wednesday, 30 January 2008

Gaming in Europe and beyond

There was a wintry wind blowing in central London right next to High street Kensington at the Royal Garden hotel where over 220 delegates made haste to attend any of two gaming conferences.
London welcomes thousands of visitors during the third week of January for the International Casino Conference (ICE) at the massive exhibition centre in Earls Court. This is another reason why the combined Mobile and Legal Summit conferences are held two days prior to ICE.
The event is organised by Bullet Business and by GMM Business Solutions. This year has seen a substantial increase in participants which included representatives of major international operators such as Betfair, Bwin, Betson, Agicos, Expekt, Betclick, Playtech, Sky Bet, Ladrokes, and Boylesport.
The legal session was visibly packed by a number of senior regulators of gaming in Europe including Marc Callu the vice President of the European main regulating board (Gref) and a senior member of the Belgian Commission. The CEO at the Malta Lotteries and Gaming Authority was invited and was represented by Dr Joseph Galea and Dr Sabina Galea who gave an update on Vlt regulation and the recent shared conduct of business guidelines.
Following the successful outcome of the ZeTurf case in France, Malta continued to cement its integrity as a hub for fair gaming in Europe. A number of distinguished speakers included Aldernay’s CEO, Britain ‘s director of Gambling Commission, Gibraltar’s Head of Gambling, a member of the European Parliament and last but not least a director of Norwegian Gaming Board. Other attendees included a representative of the Italian regulator AAMS.
The event was spread over two days. The first day was chaired by Dr Martin Sychold who is an authority on European legal studies. As head of Legal division within the Swiss Institute of Comparative law he steered the ubiquitous EU project to research and report on the entire 25 member states to unravel the tangle of gaming laws and taxation models.
The second day was chaired by George Mangion managing director of GMM Business Solutions.
The first day was packed with the latest developments on regulatory issues in Europe. Dr Quirino Mancini treated the liberalised licensing regime in Italy following the Bersani degree. In Italy the business of betting is positively valued as its margin continues to grow.
This presentation was followed by a interesting session dedicated to measures expected to be placed in motion by France following the landmark ZeTurf case. After various appeals both in France and in Malta last year saw a triumphant ZeTurf decision overruling the ban blocking it from entry into the French market.
Next speaker was Dr Wulf Hambach who gave a stern account of the prohibitive stance taken this month by the German state treaty to extend the lottery monopoly for another four years. He joked about the ‘game is over’.
Most legal advisers opine that the blocking of cross-border services by the German state monopoly is unconstitutional and runs contrary to sec.49 of EU Treaty. Many argue that administratively it is impossible to stop foreign internet operators entering the German market. Imagine for example, a number of bona-fide sports books licensed in Malta which face a ban from offering their services to German citizens. This goes contrary to the freedom of providing services within the internal market as amply manifested in the Gambelli & Placanica ECJ rulings.
Implementing the same internet blockage on credit card transactions as was put in force last year by American banks will not work in Germany. To do this will hinder the normal flow of business and banks will suffer losses ranging into billions. Moving on to flamingo country saw Santiago Asensi and Albert Guilayn cover the latest moves by the Spanish government to streamline betting taxes in the Basque Country and Madrid region.
Interesting statistics show the varying range of taxes imposed for bingo and casino in the four regions of Andalusia, Aragon, Balearic Islands, Catalunia and Madrid. Surely uniformity in levying of taxes and levies should form part of the first step to reform the sector.
This is encapsulated in a unique tax reform namely section 20 of Act 57/2007 meant to introduce remote gaming licenses. Speakers hoped this will be enacted soon after federal elections next March. This means that Spain joins the expanding club of gaming jurisdictions which includes Italy, the UK, Aldernay, Gibraltar, Isle of Man and Malta, as well regulated jurisdictions offering gaming licenses.
But hold your horses as there is a new kid on the block.
Marc Callu CEO of Bejgian Gaming Commission was equally bullish that Brussels will issue its own gamut of remote licenses. This initiative was proposed before last year’s general elections and one expects that once a national government is in place it will promulgate the entire statute of remote gaming laws and open up the internet market in Brussels - the political heart of Europe.
So with so much happening in Euro zone are the Brits trailing behind in their project to be the most efficacious gaming hub in Europe?
The verdict was issued by David Clifton a UK solicitor from the legal firm of Joelson Wilson & Co.

He was critical that after last year’s imposition by the Brown administration of a high 15% tax this effectively places the UK at a disadvantage with offshore locations.
David gave a brief history of Gaming Commission history starting with the comprehensive Budd report which led in 2002 to the ubiquitous study styled ‘A safe bet for Success ‘. This carried three main objectives: A) Keeping gambling crime-free; B) Making sure gambling is fair and open; C) Protecting children and vulnerable adults.
But after last September more bad news hit the British tabloids. The mega land-based casino touted to be constructed in Manchester was scrapped. Another 17 smaller regional casinos planned to be approved by the DCMS are meeting a cold reception from investors in Britain. Typically Ladbrokes are having second thoughts on such an investment. There is a lingering doubt whether the UK government succeeded in lightening regulatory burdens and striking the right balance between economic gain and social protectionism.
Alderney, part of the Channel Islands, was the first to gain from the confusion and its approval within the White list by the UK. The regulator’s dilemma towards hidden dangers facing the industry was the main topic discussed by Andre Wilsenach the CEO of Alderney Gambling Commission. Andre gave a brief resume of the edifying success achieved by Alderney in attracting quality gaming operators. Its regulations are rigid but fair as it aims to protect children and the vulnerable.
Alderney cooperates with the financial sector in assuring responsibility in gambling and assists in sharing research in preventing problem gaming. As a protectorate of UK it strives to enforce the third Money laundering directive to prevent fraud, money laundering and crime. Andre concluded by reminding attendees that eGaming is an international industry that requires cooperation from well regulated jurisdictions. More effort is needed to enforce implementation of standards across borders.
Having toured the traditional betting countries can we afford to ignore the efforts by emerging Eastern European countries which show great potential?
Graham Wood concluded the second day presentations by running through interesting statistics regarding demographics and GDP growth of ex-Communist countries. All hope in varying steps to offer gaming products including internet gambling. Historically this part of Europe allowed only land-based casinos and lotteries but they are smarting up and putting their money where their mouth is. They discovered internet sports betting. The unique advantage that none of these countries have are Western-style state monopolies which prohibit entry of new operators.
Typically the Slovak republic offers online licences with reasonable taxes and quality regulation through state-of-the-art telecoms infrastructure.
The two day event will be hosted again next year.

More details can be found on website www.maltaconference.com or http://www.bulletbusiness.com/legaleurope/index.shtml