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London, United Kingdom, 2007/11/05 - Following the recent arrests of Peter Nylander form Unibet, we discuss the merits of the European markets opening up and take comment from two industry experts covering issues such as opportunities for operators.
The gaming and gambling legislative landscape is a mess. And for online operators where crossing geographical boundaries is no problem - it's even worse! In 2006, the UIGEA bill was hurried through and while being catastrophic for the industry at least clarified the issue of whether online gambling in the US was legal. It wasn't. Subsequently, the value of the industry plummeted as senior level executives were indicted, player numbers dropped significantly and investors lost faith in the industry.
Expansion of Europe
On paper the next best market was Europe where many operators already had significant traction. Whilst Asia – in terms of numbers of potential players – was the real goldmine if it could be cracked. However, these markets are tougher legal minefields than the US . Meaning that the next phase of gaming and gambling is a myriad of legal battles, unclear legislation and a distinct lack of harmonisation. The recent arrest of Peter Nylander (CEO of Unibet) was recently detained by French authorities.
The future is bright…
However, recent arrests aside, the tide does appear to be turning and while the industry is still full of ambiguity and legal loopholes, the efforts of the gaming & gambling industry and the European Commission has seen gains in the last 12 months with Placanica and Ze Turf cases. In fact there are more cross border cases than ever before with letters sent to among others Denmark, Hungary, Finland, Italy, France and Germany. And with the EC seemingly onside to protect Community Law and the Freedom of Services the future is bright.
Bullet Business, organisers of the 2nd annual Legal Gaming in Europe summit, spoke to two leading experts in the industry to ascertain their thoughts on the grey area that is European gaming law.
Graham Wood of iGaming Consultancy commented – “More and more European markets seem to be ready to open up their markets – partly thanks to the pressure exerted by Charlie McCreevy’s department in the EU and partly as a result of their analysis of economic realities. The Italians were losing millions in tax revenues until they put into place their version of liberalization – the result is 1 billion euro in guarantees and fees from the new operators, a major expansion of the sector and a huge increase in tax revenues. France and Sweden are next on the list, Spain is already working on its own version of liberalization. It is a very exciting – and unique – period in the gaming industry when clued-up operators should be able to take full advantage of the opportunities.”
Wood went on to highlight the role governments will have in this shift – “Governments need the comfort of knowing that gaming markets will not become a free for all, they need to know that they can be controlled, which is very much the case thanks to technology. It is for the operators to show how responsible they can be.”
Martin Sychold, Head of the Legal Division at the Swiss Institute of Comparative Law supported Wood’s words – “At the moment, there are clear signs that some EU Member States are preparing to modify their gaming and gambling legislation so as to offer additional national licences to operators already licensed in other Member States. To the extent that those operators (a) submit to the local licensing process, (b) meet (reasonable) national licensing criteria and (c) agree to pay local taxes on their income derived from locally resident players, they will be permitted to compete with the existing monopoly operators. It is unlikely that these modifications will have come into force twelve months from now, but they might be in the process of parliamentary scrutiny.
However Sychold cautioned that – “Most people in Europe don’t want liberalised gaming and gambling legislation. Many in people in Europe clearly want existing restrictive legislation to be maintained, because they think that that will guarantee the continuity of funding provided by existing monopoly operators for their sporting, cultural, social and horse-breeding activities. Anyone who wants legislative liberalisation across Europe will have to first foment political liberalisation, in the sense of convincing ordinary people to take a different point of view”
Wood and Sychold are part of an expert speaker line-up featuring among others the European Parliament, Betfair, bwin, Betsson and a host of European legal experts at the 2nd annual Legal Gaming in Europe summit (January 21-22, 2008, London).