ALDERNEY

New regulations transforming the Channel Island’s licensing framework for gaming took effect on 1 January 2010.

ARMENIA

There were sweeping changes to gaming laws in Armenia, including a ten-fold increase in licence fees for some operators and the movement of all casinos to defined tourist areas.

AUSTRALIA

The Australian government considered introducing tougher restrictions targeting Internet gaming payments even after an official study found levels of problem gambling in the country had “probably fallen” in recent years.

The Victorian Commission for Gambling Regulation (VCGR) began to take into account the views of communities when considering applications for gaming-machine licences within them.

For example, it rejected an application for 30 poker machines at a hotel in Jan Juc, citing a telephone survey conducted by the local council which showed that just 17 percent of residents were in favour. It was suggested that the VCGR resolved to listen harder to grassroots voices after a court case in which a small town successfully contested plans for poker machines in its only pub.

The state of Victoria also challenged the federal government’s plans for a compulsory limit on the amount gamblers can bet on poker machines. The scheme, to be in place by the end of 2014, calls for each player to have an ID card which prevents them going beyond a daily limit. It is also expected that ATMs in clubs and pubs will be restricted to issuing each individual a maximum of AUD250 (¤185) per day.

AUSTRIA

European Court of Justice advocate general Jan Mazek delivered his opinion in the Austrian case concerning Ernst Engelmann, stating that the country’s gaming regulations were incompatible with EU law. Engelmann, a German citizen, had opened two casinos in Austria without a licence. Mazek held that Austrian legislation which prohibits foreign citizens from obtaining a licence is not compliant with EU principles guaranteeing the free movement of services and people.

BELGIUM

Belgium defied the European Commission by passing an online gambling law restricting available licences to incumbent operators in the country’s land-based betting and gaming sectors.

BOLIVIA

Bolivia’s ousted Minister of Health faced criminal charges following allegations of corruption in her actions to extend the licence held by the South American country’s largest gaming operator, Lotex.

BULGARIA

Bulgaria imposed a 15 percent tax rate on all gambling activities, a move described as “genocide” by one of the industry’s leading executives. Shortly afterwards, however, the Finance Ministry proposed amendments to the country’s Gambling Act, which would once again lower taxes on gambling operators.

Later, the government launched a marketing programme to treat online gaming as a tourist attraction, hoping to lure visitors from nearby countries such as Turkey where all gambling is prohibited.

CANADA

In a case that could have wider national implications, Canada’s Loto-Quebec reached an out-of-court settlement worth millions of dollars with problem gamblers in the province, following a class-action lawsuit filed against the provincial lottery operator nine years earlier.

Canada began to treat “keeping a common gaming or betting house” and “betting, pool-selling and bookmaking” as “serious crimes”. Already minor offences, they – along with others – were elevated to graver status in what the government said was a crackdown on organised crime.

Meanwhile, the country’s First Nations worked on plans to establish a national aboriginal gaming commission.

CHINA

China clarified its laws on online gambling. Anyone running an Internet gaming operation can be jailed for up to three years, and fined. But operators of larger sites – which are defined in a number of ways, with criteria including a membership list of more than 120 or total volume over 300,000 yuan (about £28,000) – can go to prison for ten years.

It appears that financial backers as well as actual operators can be punished. By the autumn of 2010, authorities said, nearly 8000 people had been arrested and almost £100,000 seized in China’s crackdown on Internet gaming.

CROATIA

Contemplating EU accession and declining state revenues, Croatia introduced a fresh gaming law together with a new tax regime, which the government hoped would help close the gap in public finances and ensure compliance with EU law.

CZECH REPUBLIC

The Czech Ministry of Finance revisited efforts to tackle illegal gambling, filing more criminal charges against 15 of the country’s leading unlicensed online betting operators.

DENMARK

Although the country’s online gaming market is being partly opened up to private firms, Danish national lottery operator Danske Spil retained the exclusive right to offer lottery, bingo, keno, scratch-cards, and betting on horse races over the Internet.

ESTONIA

Estonia’s first online gambling licence was awarded during 2010, with a virtual casino and poker room opening its doors after new regulations came into force at the start of the year.

Later, Estonian Internet service providers began blocking unlicensed gaming sites when a blacklist of 175 domain names was circulated by customs authorities.

The land-based gaming sector, meanwhile, had to accommodate new instructions on the registration of gaming machines.

On 12 May, the European Commission confirmed Estonia had met all the accession criteria to join the eurozone in 2011. It will be the 17th country to enter the single-currency bloc; Bulgaria,

Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Sweden are also preparing to join. As we went to press, Estonia was scheduled to adopt the euro on 1 January 2011.

EUROPE

Several European rulings during the year sought to strike the balance between adherence to EU principles and the right of member states to regulate gaming within their territories.

In one important decision, advocate general Paolo Mengozzi of the European Court of Justice (ECJ) said that neither the freedom of establishment nor the freedom to provide services, enshrined in the EC Treaty, gave gaming licence holders of any member state the right to offer gambling on the terrirtory of another member state, especially where a purely offshore licence was concerned.

According to Mengozzi, the court “openly and unambiguously accepts, albeit subject to certain conditions, monopolies and other restrictions on operators in the gaming sector”. The opinion related to one of a number of cases before the ECJ from Germany, in which the German courts asked the ECJ to consider whether the country’s laws for games of chance were compatible with those of the EU.

Similar thinking was outlined by advocate general Yves Bot when he ruled that a member state can determine its gambling policy and, if it wishes, prohibit the operation of games of chance on the Internet. Determining two Dutch cases involving remote-gaming operators Ladbrokes and Betfair, the court said that restrictions on the freedom to provide services can be made if the objectives of the member state are to protect consumers, prevent fraud and to preserve the public order.

The court also observed that having a licence to offer online or telephone gaming services in one member state is not “sufficient assurance” that consumers in another member state will be protected.

Separately, advocate general Bot delivered his opinion on Swedish cases relating to the advertising of remote gambling in the media. He said that legislation prohibiting the promotion of gambling over the Internet by companies established in other member states was compliant with EU law. He added, however, that while a country is entitled to restrict gambling activities, the measures it employs to do so must not be discriminatory toward foreign operators.

The European Commission dropped a case against France after the Paris government amended gaming laws to allow companies from abroad to offer online betting. But Denmark, Finland, Greece, Hungary, the Netherlands and

Sweden remained under European Commission investigation over similar concerns of protectionism.

FRANCE

In the spring, France’s broadcasting watchdog opened its consultation on whether to subject the advertising of online gambling to a watershed rule similar to the one in force in the UK.

In the summer, gaming operators were permitted to offer online poker in France following publication of regulations governing the game.

Internet service providers in France were forced to block access to illegal gambling Websites after a court ruled in gaming regulator Arjel’s favour. They could be fined ¤10,000 per day for non-compliance.

GERMANY

The European Court of Justice (ECJ) ruled that the state monopoly on sports betting in Germany was illegal because the same rules did not apply to casinos and slot machines.

The ECJ also released its judgment in a case concerning gaming-hall operator Leo-Libera and the application of VAT on gaming machines in Germany. It said that German laws were in compliance with EU legislation allowing member states broad rights to determine the conditions and limitations of exemptions for VAT on certain forms of gambling. Leo-Libera had argued that its gaming machines should not be subject to VAT. Arcades fall within the category that the relevant law describes as “other forms of gaming”, Leo-Libera suggested, and should therefore be exempt.

But the ECJ said that the gaming machines in question are not in competition with other types of gaming that come into the “other forms” category and enjoy VAT relief.

GREECE

The embattled Greek Finance Ministry made public a document giving details of plans to prepare legislation for Europe-wide tenders to be organised for three licences to operate VLTs, and others to offer online betting in the country

HUNGARY

Critics of Hungary’s new poker laws said the unpopular rules would drive players towards illegal gambling dens and into the arms of offshore online operators.

IRELAND

There was a sigh of relief from Ireland’s gaming industry around the beginning of 2010, when what had been described as the toughest budget in living memory left betting duty fixed at one percent.

However, the governing body of racing in Ireland warned that the industry “will disintegrate before our eyes” unless the government reformed the funding system and secured more money from offshore bookmakers and betting exchanges.

The duty stayed at one percent in the December budget review, too, following warnings from the Irish Bookmakers’ Association that a third of the country’s 1200 outlets could be forced to shut if the government went ahead with a proposed two percent tax on winnings.

The Revenue Commissioners confirmed that Irish casinos must apply VAT at the standard rate on gambling income, saying that some have incorrectly believed it to be exempt. Only lotteries, sports betting at bookmakers, and totalisator betting at horse races and dog tracks are exempt, although betting tax may still be applied. “All other forms of gambling carried on as a business are, and have always been, subject to VAT at the standard rate,” the Commissioners said – explicitly including gaming machines in their guidance.

ITALY

Italy’s Supreme Criminal Court adjourned all legal action concerning the 2006 Bersani sports betting licences and referred the situation to the European Court of Justice (ECJ) for clarification. Some of the disputes involving Italy’s betting market had been running for more than a decade and the decision to refer the case was welcomed by many betting operators.

Prompted by widespread operator fears, Italy’s gaming industry watchdog moved to clarify the regulations regarding the use of so-called “totems”, or gambling terminals, in betting outlets.

British bookmaker Stanleybet sought damages of ¤1.5bn from the Italian government as compensation for the company’s losses after 12 years of legal battles with the state.

A new anti-money-laundering law came into force for Italy’s bricks-and-mortar gaming businesses on 1 March, despite concerns from the industry.

JAPAN

The Japan Fair Trade Commission, the nation’s anti-trust regulator, opened an investigation into mobile gaming operator DeNA over allegations that it put pressure on game developers to deny their content to a rival – believed to be social networking service Gree. DeNA is Japan’s largest mobile social gaming platform by revenue.

JERSEY

Jersey paved the way for the Internet gaming sector to come to its shores after finally approving a plan to establish a gambling commission on the island.

LATVIA

Latvia began laying plans to restrict Internet gaming, in an attempt to arrest an alarming slump in its land-based gaming sector.

NETHERLANDS

Poker is a game of skill, a court in The Hague ruled. It was previously seen as a game of chance, meaning that organisers required a permit, which effectively prevented any individual or group other than the casino monopoly Holland Casino from running tournaments. The new ruling arose from the case of an individual who had been charged with organising poker illegally, and was based partly on mathematical evidence distinguishing chance games from skill games.

The Netherlands’ new right-wing coalition government decided to reserve many kinds of online betting for its existing monopoly lottery operator. Private companies will be permitted to offer Internet poker but only De Lotto will have the right to run online casino games, bingo and sports betting.

PHILIPPINES

Operators of the Philippines’ Small Town Lotteries have been hugely under-reporting gross sales to the Philippine Charity Sweepstakes Office which oversees them, according to former archbishop Oscar Cruz. He said they may be concealing as much as half of their takings. National police supremo Raul Bacalzo ordered a crackdown on all kinds of illegal gambling, including the numbers game jueteng, said to be worth 37bn pesos (¤600m) annually.

POLAND

A law swiftly enacted in January brought about the demise of privately-operated gaming machines in Poland, provoking indignation among businesses, who took their plight to Brussels for a series of meetings with EU officials. After scrutinising the content of Poland’s new gaming laws, the European Commission wrote to the Polish Ministry of Finance outlining concerns that certain sections relating to technical standards ought first to have been referred to the Commission for approval.

ROMANIA

During the summer, Romania’s gambling operators organised a mass strike in protest at government plans to impose new taxes they claimed could devastate the gaming industry in the country.

SOUTH AFRICA

South Africa banned online gaming. Not only operators, but also players, Internet service providers, media that advertise gaming Websites, and firms such as banks that handle gambling-related transactions can be punished with fines of up to 10m rand (¤1m) and prison sentences of up to ten years, as well as being excluded from applying for online gaming licences when they are introduced.

SPAIN

The head of Spain’s state-owned national lottery acted in the spring to defend reforms to its operational network, which had been described as “almost feudal”.

New gambling legislation in Spain allowed poker, casino games and sports betting both online and on mobile platforms. Although the country’s autonomous communities are responsible for gaming regulation, the central government said that the cross-border nature of online meant a nationwide approach was needed.

As we went to press, Spain’s smoking ban was expected to come into force in January 2011, a year later than originally planned. Smoking was already largely illegal in workplaces, but bars and restaurants had been permitted to maintain smoking areas.

SWITZERLAND

In response to consumer demand and in an attempt to channel players away from unlicensed operators, Switzerland’s Loterie Romande launched a new online gaming site, offering a range of lottery and sports-betting games.

Swiss gaming regulators confirmed that poker tournaments are only permitted in licensed casinos after the country’s Federal Supreme Court sided with casino operators in finding the game of Texas Hold ’Em to be one of chance and not skill – disagreeing with their counterparts in the Netherlands, as we report above.

UKRAINE

Authorities in Ukraine toughened legislation to help the police and courts crack down on infringements of the country’s gambling ban.

UK

The biggest regulatory news from the UK came toward the end of the year, when the new coalition government made a number of important changes to the regulatory regime for gaming that seemed to signal an administration more friendly to the industry.

First, it said that it would double the maximum stake on Category B3 machines found in adult gaming centres, bingo halls and casinos from £1 to £2, and increase the number permitted at each location to 20 percent of the venue’s total gaming machines.

Then, it announced plans to abolish Amusement Machine Licence Duty, the flat fee levied on each gaming machine, and replace it with a profits-based tax.

Details were still being ironed out at the end of the year.

And it was a busy year for Britain’s regulators and tax authorities on other fronts too. The bingo industry received a boost when HM Revenue & Customs (HMRC) said it accepted that all games of bingo should be VAT-free. With the World Cup looming, the Gambling Commission clarified rules surrounding betting in work lotteries, but said it did not plan any crackdown on informal “office sweepstakes”.

HMRC reviewed the status of SWPs with the goal of clarifying “when a prize game played on a machine is a gaming machine and therefore liable to...regulatory controls”. In particular, it sought to establish whether quiz games based on Monopoly and Cluedo had an element of chance – making them gaming machines – or if chances of winning were based entirely on skill.

HMRC concluded they were pure skill games and said it would be“content for business to use the same reasoning to determine if similar games might also be outside the scope of [duty]”. It also issued a detailed definition of

SWPs which mandated that they must test skills, must not look like a game of chance, must require “a reasonable amount of player interaction” before paying out, and should not make impossible demands on players (such as requiring them to read a quiz question and all the answers in less than five seconds).

HMRC brought new rates for gaming duty into effect for quarters ending on or after 31 October. The first £987,500 of gross gaming yield in a six-month accounting period is taxed at 15 percent; the next £680,750 at 20 percent; the next £1,192,500 at 30 percent; the next £2,516,750 at 40 percent; and the remainder at 50 percent. Gaming businesses are required to make a payment on account after the first three months of the six-month accounting period.

U.S.

The U.S. State Department said that governments in Central America and the Caribbean should tighten rules to stop gambling Websites that still accept bets from American citizens laundering the proceeds in their jurisdictions.

Backing 2009’s ruling by the Third Circuit Court of Appeals, the U.S. Supreme Court rejected an appeal by the state of Delaware, which had sought the right to offer unlimited sports betting to its residents.

The city of Jacksonville, Florida pondered how it might regulate gaming businesses that seem to exploit legal loopholes by giving customers sweepstakes entries for free or in return for purchasing other services, such as Internet access.

Customers can then use terminals resembling slot machines to see if they have won. Meanwhile, in Parma, Ohio, city authorities contemplated how to treat arcades that offer Internet games.

New Jersey legislators challenged the federal government by voting to allow local casino operators to offer online gambling to the state’s residents. Foreign players would also be allowed to use the gaming Websites, although consumers from other U.S. states would not. The enabling legislation, passed overwhelmingly by the New Jersey senate but still requiring approval – which it is likely to receive in the new year – from the state assembly and the governor, is structured such that in effect only Atlantic City’s ailing bricks-and-mortar casino businesses will be able to offer online gaming. The games that would be permitted include baccarat, blackjack, pai gow, poker, roulette, and slots.

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