NCLGS Releases Proposals for Uniform Online Gambling Legislature

2nd December 2014 by kdollar

]Three states have legalized online gambling and others are considering following suit reports Legal NJ Online Casino. The National Council of Legislators from Gaming States (NCLGS) believes that all states should have a right to pass their own legislation, but also feel it is best for them to take a similar approach. The NCLGS recently released some guidelines for states interested in legalizing online gambling.

The authors have carefully studied the impact of online gambling legislation in regulated gaming markets. They want to encourage states to create a legal framework that addresses the risks of online gambling and enables states to maximize the benefits.

The proposals cover a number of essential topics that states would need to consider, including safeguards to prevent problem gambling, measures to keep minors and out-of-state residents from accessing the sites, licensing and taxation. They provide recommendations on data protection, resolving player disputes, creating a fair taxation system and regulating payment processors. They also discuss options for deterring money laundering and fraud.

There are a number of logistical issues that states need to consider before legalizing online gambling. The NCLGS also recognizes that every states faces different challenges, so will need to create its own regulatory structure. However, the points that it touches on are applicable to every state considering legalizing online gambling.

A number of different groups provided their input on the draft policy framework. The American Gaming Association, the Council on Compulsive Gambling of New Jersey and various online gaming providers in New Jersey and Delaware shared their insights. These groups are confident that every state can create a regulatory framework that addresses the social risks while allowing states to raise revenues from online gambling taxation.

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New UK Law Forces Gaming Providers to Detail Solvency Protections

27th November 2014 by kdollar

The United Kingdom Gambling Commission (UKGC) recently passed a new requirement that will require online gaming providers to list procedures that they will take to protect player funds if the company goes bankrupt. They will be required to communicate these precautions to their customers.

The new policies will go into effect on December 31. The gaming providers will need to list them on their Terms of Service pages by that date. On February 2, new players will be required to click that they have read and accept the terms before they can complete the registration process.

The UKGC said that the risk of online gambling rooms going insolvent seems low. The regulator also said that players have a higher tolerance for risk and that money lost from online gambling wasn’t comparable to money a pensioner might lose. However, it still felt that it was necessary to issue the new policy to ensure players were properly protected.

The new requirement stipulates that gaming operators will need to segregate player funds from the rest of the business. These precautions are very similar to regulations in most other jurisdictions. The only key difference is the obligation to report safeguard measures to customers. However, some banks may take additional measures to receive a more favorable rating from the UKGC.

The new policies don’t seem overly burdensome and gaming providers are expected to adapt to them with little resistance. The new requirements may increase the market size by easing some customer concerns after problems arising with Ultimate Bet and the 2011 bankruptcy of Full Tilt Poker. Other jurisdictions may create similar regulations in the future.

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European Commission Sues Sweden over Online Gambling Laws

6th November 2014 by kdollar

Online gaming advocates throughout Europe have repeatedly argued that Sweden’s online gaming laws violate European free trade laws. They have filed multiple complaints with the European Commission since 2007, but lawmakers appeared reluctant to take action. The Commission has finally initiated a lawsuit against Sweden, which may force the country to repeal its restrictive online gambling laws.

The Commission recently released a statement claiming that EU lawmakers wanted Sweden to reform its online gambling laws. The country was first warned to reform its online betting laws in 2007. However, the country has shown little inclination to do so, which has forced the Commission to intervene.

European Union free trade laws stipulate that member states are allowed to restrict trade with other countries to protect their own citizens. The Commission argues that Sweden should liberalize its laws, because it has failed to show that they are necessary. EC officials also argued that Sweden has failed to adequately supervise domestic gaming providers and consistently enforce any of its regulations, which undermines any arguments that it was acting in the best interest of its citizens.

The European Gaming and Betting Association is among the online gaming groups that supports the decision. The Commission has been hesitant to take action against any of the countries that violated the region’s free trade laws. The EGBA and other industry groups are more optimistic that the Commission will enforce free trade laws on other countries in the near future. France, Italy and Germany are among the countries that have been accused of violating European Union laws designed to promote competition and limit local monopolies.

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UK Gambling Site Migrations Stall Over Pending Court Ruling

29th October 2014 by kdollar

The Gibraltar Group filed a legal challenge to the new UK Gambling Act. The law was originally scheduled to take effect on October 1, but has been postponed for one month until the legal challenge is settled.

Lord Justice Green began hearing arguments on the case last week. He stated that it would be impossible to issue a decision by October 1, so the law would need to be postponed in the meantime. The delay is welcomed by many gaming providers, because it would have been difficult to migrate their customers by the deadline.

Gaming providers throughout the country have delayed plans to migrate their sites to .uk domains. Over 150 gaming providers have reportedly applied for temporary licenses to continue operating for the next month. Other providers have announced that they will withdraw from the UK market before the end of the month.

PokerStars has informed players that they will need to move their accounts to the UK site by November 1. Full Tilt has announced that players will need to migrate to its new site as well, but didn’t set a firm deadline.

The Gibraltar Group hopes that the law will be entirely overturned. They claim that it violates European free trade laws and poses a threat to both gaming providers and players. The majority of the gaming community appears to share their criticisms, but most experts are doubtful that the court will overturn the law. Gaming providers have already committed a lot of time implementing the new changes, so may proceed with their plans to move their players to .uk domains even if the law is overturned.

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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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