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Online Bingo to End in Some Countries
Online bingo is a very profitable, and popular business in many countries, but there are fears that this soon may change following new legislation in Europe regarding online gaming.
France in particular is a country that has many Internet gambling sites in turmoil and deciding on the best course of action. To give some historical background all games which were considered to be a game of chance (such as slots, as well as Internet casino games) were banned on 12th July 1983, apart from some casinos where games were approved by the ministry, which led to 200 gaming venues which were operating legally. There was no common system for bingo which meant technically it wasn’t allowed, although again there were some exceptions to this.
According to European Community Law, Article 49 of the treaty establishes the principle of freedom to provide services across the European Community. In a nutshell this means that, unless there is a valid reason, no member state can prevent another state from offering services on its territory. Article 49 is supported by Article 43, which concerns the freedom of establishment.
Italy has also experienced problems with the monopoly of gaming. It was ruled that member states were not able to restrict the cross border supply of gambling services. In 2003 the court held that “the Italian Government does not pursue any coherent policy to limit and to remove and play activities”. Because of this other state members could not be restrained from providing services within it’s territory. Since this time European states have kept to this ruling and online bingo operators have been able to operate without restriction.
As France are extending the monopoly to the internet it seems that they do not support this policy and so are making a stand against it. In order to prevent the European Court of Justice forcing it to open its market to competition the French Government have created new legislation. With the new legislation the French wanted to control the level of turnover in gaming on the internet, as well as tackling the problems of under age players and problem gaming.
Certain games, including slot machines and roulette, are banned as they are considered to offer exceptionally high risk levels for addiction. Liberalisation will occur however for Internet poker and sports book betting. The operating license will be free and valid for 5 years, after which time it can be renewed. Limits will be placed on player account balances and player stakes. There must also be a system whereby the player knows how long they have been playing for, and how much money has been lost in a session. These restrictions are an attempt to prevent compulsive gambling and to deter money laundering. France has also said that they will not recognize any license that has been issued by other European countries, even if they are fellow State members. Any companies that gain the license and operate on French territory will have to have separate accounting departments to deal with French players.
The sudden rush to introduce the legislation was triggered by the soon to start World Cup, and the increased betting levels that goes with it. Several bingo companies are currently deciding whether to continue operating in France or not. William Hill for one have decided to withdraw all casino services from France, although they are still operating in other European states. Betfair have also withdrawn from the French market. The Director of European Affairs, Tim Phillips said; “We are looking very hard at the French market and how we may operate within the new license regime. Although it is not impossible for a newcomer to create a commercially viable business most projections show it will be difficult to do so given the proposed restrictions imposed on license holders”
It is anticipated that 30-50 operating licenses will soon be granted, and that the majority of license holders will not be able to operate profitably. The proposed tax levels are quite high, and companies which operate in French territory will have to pay tax on players’ stakes, which will be a boost to the coffers of the French Government. In view of the current economic situation in Europe we’re sure that leaders of other European states will be closely monitoring the situation to see if it something they can too introduce.
Gaming operators will no doubt remember the effects of the US enforcing their gaming legislation. Many senior executives of gaming companies were arrested, threatened with jail and faced huge fines. Party Gaming for one were pursued by the US Justice Department and reached an out of court agreement for $105 million.
With several countries looking at their existing legislation we are sure that others will soon announce amendments, none of which will probably be in favour of online gaming sites. Internet bingo operators have faced many challenges of late, and we are sure that there will be more to follow.
Brought to you by London Bingo News
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