Spain Issues New Online Gambling Licenses to Grow Industry

24th October 2014 by kdollar

The Spanish online gambling industry has been struggling for the last few years. The industry is highly fragmented and some regulations have damaged the player experience. The government is looking to make reforms to facilitate competition with gray market gaming providers. The Directorate General for the Regulation of Gambling (DGOJ) recently announced it will be issuing new online gaming licenses to grow the industry.

The new policies will allow both licensed casinos and entities without any DGOJ license to apply. Operators will be allowed to offer slots and other online casino games through .es websites.

Albert Agustinoy Guilayn of DLA Piper recently told Poker News that the new licenses are essential to protect the industry. Guilayn said that the online gambling market in Spain won’t be sustainable if it is limited to poker, due to Spain’s small population. Allowing operators to offer additional forms of online gambling will increase liquidity and draw more companies to the market.

Guilayn also cited a couple of other concerns. Online gambling tax rates in Spain are still excessive and PokerStars controls nearly three quarters of the market. These problems will be difficult to address, but Guilayn and other experts believe that increasing competition is going to break the PokerStars near monopoly. Amaya Gaming, the parent company for PokerStars, plans to create a more diversified array of online gambling products. However, the company will probably stay focused on online poker, which should make it easier for the rest of the industry to grow.

Experts predict that about a dozen new online gambling operators will enter the market. Gambling consultant Eduardo Morales-Hermo believes that existing online gaming providers will also invest in developing online slots.

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Ireland Plans to Generate €25 Million from Online Gambling Tax

16th October 2014 by kdollar

The Irish government intends to introduce a new online gambling tax in the near future. Michael Noonan, the Minister of Finance, has been lobbying for this new tax since assuming office three years ago. The new tax is finally about to take effect and Noonan is confident it will generate substantial revenue for the country.

Analysts predict that Ireland will generate an estimated €25 Million from taxing online gambling. Approximately 40% of those revenues will be set aside to improve the racing industry, which is expected to lift the nation’s struggling economy.

The new law is eerily similar to the UK Gambling (Licensing and Advertising) Act of 2014. It targets foreign gaming providers that offer their services to Irish citizens. These companies will be forced to pay taxes on their online gaming earnings, regardless of the jurisdiction they are based out of. The law will discourage domestic gaming providers from relocating to Gibraltar and other countries to circumvent Ireland’s taxes. They will also require all gaming providers that generate substantial amounts of revenue from Irish citizens to pay taxes to the Irish Tax and Customers authority.

Irish citizens spend as estimated €1.6 billion on online gambling sites every year. However, most of their wagers are placed on gaming sites in foreign countries with lower tax structures. Noonan argued that reforming online gambling taxes was necessary to recapture this lost revenue.

Ireland is in desperate need of new revenues. The Organisation for Economic Co-operation and Development (OECD) recently predicted that the country will miss its deficit reduction target and will need to make significant cuts to its budget. Imposing the new online gambling tax will enable the country to reduce austerity to avoid a deeper recession.

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UK High Court Strikes Down Online Gambling Lawsuit

12th October 2014 by kdollar

In May, the Gibraltar Betting and Gaming Association (GBGA) filed a lawsuit to block the implementation of a new UK online gambling law. The law was scheduled to go into effect on October 1, but the UK Gambling Commission was forced to delay implementation until the lawsuit was settled. The High Court has finally rendered a decision to uphold the law.

The new law requires online gambling providers to pay a consumption tax on all UK gaming revenues, even if they are based in foreign jurisdictions. It also allows the gambling commission to blacklist any provider that offers their services in gray markets. A number of UK gaming providers relocated to Gibraltar and other jurisdictions, because that tax structure was much lower. The new law removes the incentive for them to remain outside the jurisdiction of the UKGC.

The Gibraltar trade group argued that the new law was anti-competitive and violated European free trade laws. However, Judge Justice Green disagreed with their claim. Green said that Parliament was within its rights to pass the law.

The ruling is bane for online gambling providers that were able to circumvent HM Revenue and Customs by relocating. However, the impact on players will be minimal. They will need to migrate to sites with a .uk domain, but will still share a pool with other players in regulated jurisdictions. The only downside to them is that some of the VIP programs and prizes may be tapered slightly. However, gaming providers haven’t specified what changes they plan to make so far.

Most gaming providers knew that the law would most likely be upheld. They will continue implementing plans to migrate players to new domains, but appear to appreciate the extra time.

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German Court Decision Leaves Online Gambling Market in Limbo

7th October 2014 by kdollar

Germany regulated online betting earlier this year, but a recent court decision could jeopardize the new industry. Many experts believe that the industry will remain unregulated for the foreseeable future.

The Hesse Ministry of the Interior began accepting online betting applicants in March. Calvin Ayre initially believed that online gambling would be launched in the second half of the year, but the industry has faced several setbacks. Only 20 licenses were available and the applications were screened carefully. A number of licenses were issued earlier this week. Several companies that were denied licenses filed a lawsuit to have licenses suspended.

The Hesse Ministry of the Interior delayed implementation of the licenses in anticipation of a lawsuit. Licensed gaming providers hope that the lawsuit will be settled in the near future.

Cashpoint is one of the companies that will be inconvenienced by the new ruling. The company formed a joint venture with Maxcat Vertriebs at the beginning of the year. The companies have been planning to offer sports betting to German citizens for months, but may need to hold off before their site can be launched.

Deutsche Telekom, a telecommunications company in Bonn, is another firm that is discouraged with the new ruling. Deutsche Telekom decided to diversify in the online betting market earlier this month. A spokesperson for the company said the company was still discussing its future plans, but is optimistic about the new opportunity.

The recent court decision is a temporary setback, but gaming providers are still hopeful. Germany has taken a more liberalized position on online gambling over the last year, which will create many new opportunities for gaming operators.

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UK Players Urge Gambling Commission to Change Auto Top-Up Rule

27th September 2014 by kdollar

Several years ago, the United Kingdom Gambling Commission implemented a new set of policies to discourage problem gambling. The Remote Gambling and Technical Standards states that gaming providers must avoid designing their products to encourage players to chase losses or increase their wagers. However, a number of players have filed complaints with the UKGC, stating that the policies have failed to resolve the problem.

Many citizens have stated that the new policy has placed them at a disadvantage against players from other regions. Players often use automated top-up features to ensure they set their bid at the maximum each hand, which is a necessary feature for many strategies. These players need to take time to manually set their bets at the highest level. As a result, they have less time to formulate an effective strategy and can play fewer tables at a time.

They claim that the new policy hasn’t discouraged them from placing high bets. They feel that the new policy should be amended, because it has only placed them at a disadvantage against other players.

Richard Richardson is one of the players that have commented on the policy on Two Plus Two. Richardson said that players using the top-up feature aren’t chasing their bets. He said that the option is an effective strategy for players with a large pool of chips. Richardson also said that multi-tabling doesn’t encourage players to increase their wagers. He said that players actually tend to place lower wagers while playing multiple tables, which nullifies the benefits of the UKGC ban on top-up automated trading.

Richardson has created an online petition and is encouraging other Two Plus Two members to sign it. However, he may make some modifications to the text. Martin Shapiro has suggested altering the proposal to emphasize the argument that top-up automation doesn’t encourage players to chase their losses in any meaningful way.

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Spain Closes Bitcoin Loopholes for Online Gambling Providers

22nd September 2014 by kdollar

Bitcoin gambling sites are prolific in Spain. They have been mostly unregulated, because law enforcement officials and gaming regulators believed the laws only applied to gambling sites using traditional currencies. However, El Ministerio de Hacienda y Administraciones Públicas, the financial regulatory authority recently announced that existing laws apply to bitcoin gambling sites.

The Spanish government has become increasingly wary of bitcoin. In May, officials announced that they would begin tracking bitcoin expenditures to ensure they aren’t used for money laundering or other illicit activities.

El Ministerio de Hacienda maintains that bitcoin isn’t legally money. However, it stated that it is a medium that can be exchanged for money, The new ruling shows that bitcoin and other cryptocurrencies are still subject to many regulations that apply to traditional commerce.

There are a couple of implications of the new ruling. All bitcoin gaming providers will be required to receive licenses to operate in Spain. Many have used bitcoin to avoid the cost of seeking a license, exploit tax loopholes and escape the government’s increasingly strict regulations.

Some gaming providers have took advantage of the ambiguity of bitcoin laws to continue offering their services to regions that banned online gambling. The new ruling also prohibits gaming providers from operating in the United States or other regions that have prohibited all forms of online gambling or risk losing their gaming licenses.

Many other governments are debating the legality of bitcoin and the logistics of regulating it. New York State recently proposed new regulations to oversee cryptocurrency transactions. Other governments feel that it requires more oversight to curtail crime and protect citizens. They may follow the Spanish government’s lead and begin placing new requirements on bitcoin gaming sites.

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Portugal Government Approves New Online Gambling Bill

11th August 2014 by kdollar

The Portuguese Council of Ministers recently stated that it has approved a bill that would legalize online gambling. The announcement comes four days after the Parliament set a date to discuss the new proposal.

The government hasn’t released a draft of the bill to the public. However, Adolfo Mesquita Nunes, Secretary of State for Tourism, has disclosed some of the details. His statements indicate that the new regulations would be less restrictive than many other European countries, but the bill also includes punitive taxes that could discourage smaller online gambling providers from seeking a license. Parliament may need to reconsider them to avoid driving citizens to black market gaming providers.

Mesquita Nunes said that the bill would allow foreign gaming providers to participate in the new market, but they would be carefully screened beforehand. The nation’s gaming regulator would scrutinize both their business model and financial situation before issuing them a license. Mesquita Nunes hasn’t stated whether Portugal would create a blacklist of gaming providers.

Online gambling providers would be subject to the same taxes as land-based casinos. Tax rates for revenue generated from offering games of chance would range from 15-30%. Taxes for sports betting would be 37.5%.

This tax rate would be one of the highest in the European Union. Parliament may need to reduce it to attract new gaming operators. Italy has a tax rate that varies from 3% to 20%, which depends on the games offered. Many online gambling operators have been reluctant to operate in that country, so they may be even more hesitant to offer their services in Portugal.

Despite the high tax rate, many online gambling advocates are very pleased with the new proposals. Portuguese finally seem to have recognized the benefits of liberalizing the online gambling industry. Mesquita Nunes said that the new law could be enacted by the end of the year.

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Netherlands Government Bodies Disagree on Plans to Deregulate Online Gambling

1st August 2014 by kdollar

The Netherlands Justice Ministry is considering deregulating the online gambling industry. The government currently has a monopoly on the industry, but justice officials feel that private providers should be assume control of it. However, their view isn’t shared by other government agencies.

The Council of State, the Dutch government’s top advisory council, feels that the new system may not solve the challenges that the government is facing. They feel that the Dutch government is in the best position to oversee the online gambling market. Representatives from the Council of State claim that the government needs to conduct additional research before making any decisions.

Experts from the Justice Department argue that the state run monopoly has been ineffective. They said that most Dutch citizens are discouraged with the services that the government run Holland Casino provides. They believe that citizens will be more likely to use regulated gaming sites, which would discourage them from spending their money with unlicensed gaming providers. These representatives are confident that about four out of five citizens that are using gray market gaming sites will use regulated sites after the changes are enacted.

The Council of State said that the Justice Ministry’s proposals may not comply with other European gaming laws. They also feel that the proposals may not work so well, because private gaming providers will still need to compete with companies in other jurisdictions. Their letter to the Secretary of State argues that the government should reconsider these proposals before rendering their final decision.

Many experts feel that the advisory board raised some valid criticisms of the proposals. However, they also feel that the country could benefit from the changes. The government has already approved a lower tax rate, which should make illegal gaming sites less appealing.

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GBGA Launches Challenge to UK Gambling Laws

24th July 2014 by kdollar

The United Kingdom recently passed a new law that would require all companies to receive a license from the UK Gambling Commission. Online gaming providers throughout the world have protested the new requirement. The Gibraltar Betting and Gaming Association (GBGA) has been one of the most vocal critics of it. The GBGA said that it intends to protest the new laws in court.

The organization recently wrote a letter to Sajid Javid, Secretary of State for Culture, stating that the new requirement is a breach of EU free trade laws. He said that the new laws also fail to protect UK citizens from illegitimate grey market gaming providers.

Many online gambling providers may feel overwhelmed with two different regulatory requirements. The Gibraltar government fears that the new law will encourage many online gambling operators to relocate to the United Kingdom. Other European countries may share that sentiment and protest the law, stating that it would give the United Kingdom a competitive advantage in the online gambling industry.

William Hill, Ladbrokers and a couple other members of the GBGA don’t support the legal challenge. However, they have raised similar concerns with the two license requirement.

The GBGA said that some of its members have been operating out of Gibraltar for nearly two decades. It maintains that the Gibraltar gaming regulators have done their job effectively and protected consumers throughout Europe. The group stated that the UK Gaming Commission won’t be able to effectively oversee companies based in other countries, which increases risks to consumers.

The group has also raised concerns with the 15% point of consumption tax. Peter Howitt, head of the GBGA, said that many citizens may choose to use black market gaming providers instead to avoid the tax.

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European Leaders Propose Restrictions on Online Gambling Advertisements

16th July 2014 by kdollar

European lawmakers have raised a number of concerns about the social consequences of online gambling. The European Commission recently stated that countries in the region will need to reform their online gaming laws to protect citizens and minors. EC lawmakers are advocating member states to pass new laws that would restrict advertisements for online gaming providers.

The European Commission isn’t opposed to the concept of online gambling. However, it wants to make sure that the industry is properly regulated. The market has grown significantly in recent years, so there is more pressure to create new policies to oversee it. The biggest concern lawmakers have raised is deterring minors from accessing online gaming sites. They feel that better player verification systems may be necessary.

EC officials are also speaking with leaders of various online gaming providers. They are urging these executives to implement their own safeguards to protect citizens with gaming addictions and minors.

The EC has proposed several new regulations it feels all gaming providers should abide by. It is encouraging member states to prohibit gaming providers from misrepresenting chances of winning or making other unrealistic claims. The EC also feels that member countries should require gaming providers to be more transparent about the social risks of online gambling.

Michel Barnier, a spokesperson for the EC, said that lawmakers want to create more protections for players. Individual countries won’t be required to implement any specific solutions the EC proposes. Barnier said that the EC’s role is to provide the goals that countries should strive to reach, while allowing them the latitude to achieve them.

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