Sorting out the legal regime
Malta-based GMM Business solutions is organising another international Gaming Expo, this time at Lake Como, Italy at the end of May. But why Italy and not London or Costa Rica?
The answer is simple. Italy has recently become a more user-friendly jurisdiction for international gaming and last year it issued an impressive set of new remote gaming licences.
Italy stands out as an attractive jurisdiction with a compromise tax burden which at three per cent is well placed to beat competition and start attracting cross-border trade.
Ladbrokes recently announced that it had formed a Joint-Venture with the Italian betting company Pianeta Scommesse, the first step in a planned e100 million investment by the company to establish high street shops, non-dedicated outlets, and internet and telephone betting operations over the next five years. The announcement was in response to proposals contained within the "Bersani Decree" by which the Italian government is set to reform the Italian betting market, increasing the number of sports betting licences to 7,000, while reducing taxation on sports bets from 17 per cent to between two and eight per cent, depending on turnover.
All this contrasts with the way how London received shock treatment in Gordon Brown's recent budget. The chancellor announced in his recent budget that the online gaming tax is to be a high of 15 per cent. Previously industry lobbyists had been predicting that the tax would be hovering around the two per cent and three per cent., which would have been comparable with other low-tax EU jurisdictions. The chancellor's decision means that setting up in the UK is now prohibitive.
Furthermore, as a result of the decision by the US Congress last year to outlaw the use of credit card for online gaming transactions, many consider that in the short term Europe is the main area of opportunity for operators.
Thus Spain is also about to liberalise its markets in Catalonia, the Basque region and Madrid. This has attracted UK heavyweights such as William Hill which recently entered into a joint venture with Codere, a Spanish gaming company that operates 76 bingo halls across Spain.
The same cannot be said for France, to the extent that the EU Commissioner for the Internal Market and Services Charlie McCreevy recently questioned how France could ban European online operators access to the French sport and horse-race betting market on the pretext that it wants to prevent addiction when the French sport betting market continues to expand and offer more choice and opportunity for consumers to bet.
A ruling by the European Court in the Placanica last month, however, opened new horizons for liberalisation in the European gaming markets and one hopes that the French authorities will finally fall in line.
On March 6 the court ruled that Italian criminal penalties imposed on intermediaries for collecting bets on behalf of foreign companies was contrary to community law.
The court said that a member state may not apply a criminal penalty for failure to complete an administrative formality where, in breach of Community law, such completion is refused or rendered impossible by that member state. Furthermore, the court pointed out that legislation which prohibits the pursuit of activities in the betting and gaming sector without a licence or a police authorisation issued by the state, places restrictions on the freedom of establishment and the freedom to provide services.
Following the Placanica ruling the European Union opened infringement proceedings against Italy, warning that its restrictions on "legitimate" operators were disproportionate.
Similar infringement notices were also sent to Hungary, Denmark and Finland.
These developments have been well received by legal experts in Europe who feel that the Placanica judgment makes it clear that where a third country's gambling laws adhere to the strict guidelines now laid down in EU case law, one cannot prohibit legitimate betting and gaming services provided from that third country.
All these issues are of direct relevance to Malta, which is growing into quite a significant online betting jurisdiction. The Placanica ruling as well as Britain's decision to raise its taxation on online betting mean that the former could help generate more cross-border business, while the latter will could mean Malta attracting more UK business.
But there are other legal issues which all jurisdictions need to discuss, such as restrictions in some countries or regions, notably in Germany on advertising of sports betting.
With the whole industry looking to the European market to drive growth and harness competitive advantage, now is the time for operators to ensure that they have a clear and unequivocal understanding of the exact legal situation across Europe, hence the reason for the specialist conference in Como.
This will be another opportunity for companies involved in the gaming and gambling industry to get on top of the game; hearing from gaming and gambling operators such as Betfair, Ladbrokes, 1128.com (formerly ParadiseBet), bwin, and Probability Games Corporation and other industry leading experts such as speakers from AAMS, The European Commission , European Parliament, Belgian Gaming Commission, Gambling Control Commission, and IMLP
Further information on the conference is available from Joanne Fenech or Colette Mangion Tune at GMM Business Solutions. Tel 2148 4373, 2748 4373 or 9949 6848
www.international-gaming-expo.com
Italy stands out as an attractive jurisdiction with a compromise tax burden which at three per cent is well placed to beat competition and start attracting cross-border trade.
Ladbrokes recently announced that it had formed a Joint-Venture with the Italian betting company Pianeta Scommesse, the first step in a planned e100 million investment by the company to establish high street shops, non-dedicated outlets, and internet and telephone betting operations over the next five years. The announcement was in response to proposals contained within the "Bersani Decree" by which the Italian government is set to reform the Italian betting market, increasing the number of sports betting licences to 7,000, while reducing taxation on sports bets from 17 per cent to between two and eight per cent, depending on turnover.
All this contrasts with the way how London received shock treatment in Gordon Brown's recent budget. The chancellor announced in his recent budget that the online gaming tax is to be a high of 15 per cent. Previously industry lobbyists had been predicting that the tax would be hovering around the two per cent and three per cent., which would have been comparable with other low-tax EU jurisdictions. The chancellor's decision means that setting up in the UK is now prohibitive.
Furthermore, as a result of the decision by the US Congress last year to outlaw the use of credit card for online gaming transactions, many consider that in the short term Europe is the main area of opportunity for operators.
Thus Spain is also about to liberalise its markets in Catalonia, the Basque region and Madrid. This has attracted UK heavyweights such as William Hill which recently entered into a joint venture with Codere, a Spanish gaming company that operates 76 bingo halls across Spain.
The same cannot be said for France, to the extent that the EU Commissioner for the Internal Market and Services Charlie McCreevy recently questioned how France could ban European online operators access to the French sport and horse-race betting market on the pretext that it wants to prevent addiction when the French sport betting market continues to expand and offer more choice and opportunity for consumers to bet.
A ruling by the European Court in the Placanica last month, however, opened new horizons for liberalisation in the European gaming markets and one hopes that the French authorities will finally fall in line.
On March 6 the court ruled that Italian criminal penalties imposed on intermediaries for collecting bets on behalf of foreign companies was contrary to community law.
The court said that a member state may not apply a criminal penalty for failure to complete an administrative formality where, in breach of Community law, such completion is refused or rendered impossible by that member state. Furthermore, the court pointed out that legislation which prohibits the pursuit of activities in the betting and gaming sector without a licence or a police authorisation issued by the state, places restrictions on the freedom of establishment and the freedom to provide services.
Following the Placanica ruling the European Union opened infringement proceedings against Italy, warning that its restrictions on "legitimate" operators were disproportionate.
Similar infringement notices were also sent to Hungary, Denmark and Finland.
These developments have been well received by legal experts in Europe who feel that the Placanica judgment makes it clear that where a third country's gambling laws adhere to the strict guidelines now laid down in EU case law, one cannot prohibit legitimate betting and gaming services provided from that third country.
All these issues are of direct relevance to Malta, which is growing into quite a significant online betting jurisdiction. The Placanica ruling as well as Britain's decision to raise its taxation on online betting mean that the former could help generate more cross-border business, while the latter will could mean Malta attracting more UK business.
But there are other legal issues which all jurisdictions need to discuss, such as restrictions in some countries or regions, notably in Germany on advertising of sports betting.
With the whole industry looking to the European market to drive growth and harness competitive advantage, now is the time for operators to ensure that they have a clear and unequivocal understanding of the exact legal situation across Europe, hence the reason for the specialist conference in Como.
This will be another opportunity for companies involved in the gaming and gambling industry to get on top of the game; hearing from gaming and gambling operators such as Betfair, Ladbrokes, 1128.com (formerly ParadiseBet), bwin, and Probability Games Corporation and other industry leading experts such as speakers from AAMS, The European Commission , European Parliament, Belgian Gaming Commission, Gambling Control Commission, and IMLP
Further information on the conference is available from Joanne Fenech or Colette Mangion Tune at GMM Business Solutions. Tel 2148 4373, 2748 4373 or 9949 6848
www.international-gaming-expo.com