Spain
As a result of the uncertainty over the legality of the provision of online gambling, which is not expressly prohibited by Spanish law, Spain has historically adopted a tolerant approach to the supply of foreign gambling services into the jurisdiction.
Madrid and the Basque Region have both introduced licensing regimes for online betting, which has led to the Spanish government taking steps towards a nationwide system of regulation which will permit operators to obtain a Spanish gambling licence. The draft legislative process is ongoing, and has been subject to criticisms, including accusations of a lack of transparency and failure to consult stakeholders.
As a result, other Spanish regions, including Castilla-Leon and La Rioja, have announced their intention to regulate the sector on a regional basis. It is likely however that there will be a federal approach to licencing that will come into force in 2011.
Back to top
United Kingdom
The Group operates a licence granted by the Alderney Gambling Control Commission, and is therefore permitted to advertise in the UK under the Gambling Act 2005, which permits UK advertising for Alderney licensees on the back of Alderney’s whitelisted status.
In April 2009, the Department for Culture, Media and Sport ('DCMS') announced that overseas gambling operators who advertise in the UK may face new financial and regulatory requirements to ensure a more even financial treatment of UK operators and non-UK operators who target the UK market. The DCMS is due to report its findings to Parliament before the end of 2009.
Back to top
France
France instigated a licensed approach in June 2010. It is regulated by L’Autorité de régulation des jeux (ARJEL). To date, 18 licences have been issued to operators; the majority of whom are French companies.
Currently, Sportingbet is reviewing its application for a French licence, as the taxes are punitive and the economic viability of operating in France is under review. Whilst we review the approach to France, we have taken measures to ensure we comply with the French regulations, and therefore no domiciled French customers can register or bet on Sportingbet sites.
Back to top
Germany
Despite criticism from the Commission, the Interstate Gambling Treaty remains in force in Germany. The Treaty effectively provides that all forms of online gambling are unlawful where they are targeted at German residents.
While the current official position in Germany is that the Treaty is not to be amended, we understand that the German government is under intense pressure from the Commission and at a political level internally to amend the legislation. Furthermore, enforcement action against operators where they actively target German residents (including through local marketing) has been curbed due to the lack of clarity in the legal position.
In our view, therefore, legislation that was intended to almost comprehensively block online gambling has had only limited effect, and the general inability of the German government to block online gambling websites, coupled with the questionable legality of the legislation, has led to a continued supply of online gambling services, and an absence of extra-territorial enforcement against the activity.
Back to top
Italy
Italy has changed its monopoly-orientated stance on online gambling and has started to permit a number of non-Italian bookmakers to obtain licences to operate online betting offerings from certain outlets such as newsagents, bars and cafes.
In addition, Italy has recently announced that it is to legislate for the licensing of online poker cash games, casino games, betting exchanges and betting on virtual events during the course of 2009. The draft legislation will be submitted to the Commission during the course of 2009, with the intention to commence licensing by the end of 2009.
Italy currently requires that even EU-licensed operators obtain an additional gambling licence in Italy in order to target its domestic market. However, such an approach is potentially in breach of the EU principle of mutual recognition of businesses licensed elsewhere in the EU, and it remains to be seen whether such a stance will be permitted by the Commission in the long term.
Back to top
Norway
Norway is heavily regulated and takes a monopolistic approach to gaming. It has implemented the payments act that establishes that processing payments for remote gambling will amount to 'accessory involvement' in unlawful gambling. This has been challenged through the EFTA courts.
Sportingbet policy has been to comply with EU (and EFTA) legislation when the legal process has been exhausted. This is now the case in Norway. The Oslo District Court ruled in favour of Norsk Tipping (and its legitimacy). (Ladbrokes dropped its appeal against this ruling following the Santa Casa ECJ ruling.) Therefore, Sportingbet will close its sites to domiciled Norwegians with effect from 31st July 2010, and this situation will remain until there is a change to the legislation.
Back to top
Turkey
Anti-online gambling legislation was introduced in Turkey in February 2007 to underpin the State monopoly, although it remains legal for customers to transact with offshore online operators. The Group continues to accept bets from Turkish residents, although it does not have employees, nor does it conduct advertising, in the territory.
Back to top
Australia
The lack of consistency in the approach and implementation of state and federal legislation across Australia has resulted in uneven regulation of the online gambling sector.
This is particularly evident in the protectionist legislation in relation to the payment of fees for the use of sports products (e.g. race fields and sporting fixtures) which is levied against betting operators in Australia in a supposed bid to prevent illegal gambling and to police the dissemination of information in this field. Such fees are levied on operators licensed in Australia, in addition to taxes they pay in their licensing state.
Race fields legislation exists in every Australian state except the Australian Capital Territory and the Northern Territory; in addition, no fees are currently payable in Western Australia and Tasmania as the relevant legislation has not yet come into effect. The race fields legislation, however, is subject to ongoing legal challenge, principally on the grounds that it is an unconstitutional violation of Australian free trade principles. The High Court has already ruled against such fees on the grounds that they are an unfair (and unconstitutional) restriction on competition.
Unlike race fields, and with the exception of Victoria, no state or territory has legislation that specifically requires betting operators to pay fees for the use of sporting fixture information. However, a general principle has developed under which corporate bookmakers enter into direct commercial agreements with the national administrative bodies for each sport. Such agreements typically provide for a fee equivalent to 5% of revenue to be paid to the administrative bodies.
Back to top
United States
The US continues to prohibit online gambling supplied from offshore. Despite the current prohibitive position, there have been suggestions that, in light of the economic downturn in the US and the resultant loss of revenue for land-based casino operators, liberalisation may occur in the online gambling market. Increasing pressure from consumers and lobby groups has also resulted in legislative proposals. To date these have not amounted to a change in the existing prohibitive regime.
The Group continues in its discussions with the US Department of Justice to seek clarification of the position of the US Authorities with respect to the Group’s previous activities and whether a mutually acceptable resolution is possible.
These talks continue and are productive and amicable in their nature. The Board continues to be optimistic of reaching a settlement but has little visibility of the likely timing or quantum.
Back to top
Asia
The regulatory regime in many Asian countries is currently prohibitive and, at present, the Group has no operations or activities in Asia.
Back to top