European News Roundup

Scotland
Calls for Tougher Control Over Fixed Odds Betting Terminals

Scottish lawmakers are calling for new laws to curb the rise in the use of fixed odds betting terminals (FOBTs) after a locally commissioned study found that Scots are gambling more than £200 million a year in Scottish bookmakers. According to local press, there are 800 high stake machines located in around 200 betting shops with locals betting more than £500,000 every day into the machines in Scotland.

The problem has become particularly acute in Scotland’s largest city, Glasgow, with city treasurer, Councillor Paul Rooney, saying that FOBTs pose a health risk to Glaswegians especially amongst the poor due to the fact that gambling rules are too lax when it comes to FOBTs in bookmakers. New laws, he said, are necessary in order “to ensure that when gambling takes place in our communities it is within a safe, sustainable and responsible environment,” adding that “in the case of fixed odds betting terminals, that principle has failed.” His calls for reform have also been echoed by a number of Labor members of Parliament including Labor MP Tom Greatrex who said the study proved that that the machines are “dominating high streets across Scotland.”

Rooney’s remarks come at a time when the rest of the U.K. is also looking at restricting the number of FOBTs and reducing the permitted maximum stakes. Leader of the Labor Party Ed Miliband has announced that his party would give powers to local councils when it comes to banning fixed odds betting terminals if he is elected prime minister in 2015 and the Conservative government is also looking increasingly likely to act on the issue. The Scottish government has stated its intention to issue new guidelines regarding the new machines shortly but the government is waiting for the rest of the U.K. to pass legislation on the issue as the decision for now ultimately rests in the U.K. House of Parliament.

The Netherlands
Government Confirms Liberalization of Online and Land-Based Markets

The government of Holland has announced that it will sell its state-run monopoly of casinos in a long awaited move aimed at opening up the market to other operators in 2017. At present Holland Casino (official name: National Foundation for the Exploitation of Casino Games in the Netherlands) has the legal monopoly on casino gambling and has fourteen casinos throughout the country located in city centers and tourist zones with profits going directly to the Dutch treasury.

In early 2013 it was announced that the government was looking at proposals to privatize Holland Casino and end the state monopoly over casino gaming as well as other segments of the gaming industry. Justice Minister Fred Teeven has now confirmed the move, saying that four locations will be sold individually while the remaining ten will be sold under the brand name Holland Casino. Holland Casinos have, over recent years, consistently recorded a decline in visitor numbers.

The government is also ending the ban on online gaming and intends to open up the market to offshore operators in 2015. Although illegal, it is estimated that the Dutch spend an estimated € 450 to € 500 million a year on offshore internet gambling sites. Prime Minister of the Netherlands Mark Rutte has long been a supporter of opening up the online market in order to raise additional tax revenue in the face of the ongoing economic crisis in the region.

According to local press, a gambling tax of 20 percent will be imposed on online operators. This is a positive step for the industry as the tax rate previously under consideration was 29 percent GGR. This reflects the same tax which is currently in place regarding the brick-and-mortar Holland casinos. The 29 percent tax rate would have made it difficult for operators to make a profit. However under new proposals, operators will also have to contribute 0.5 percent of turnover to a fund aimed at curbing addiction to gambling as well as a further 1.5 percent on turnover, which will go to the Dutch Gaming Authority (DGA).

Portugal
New Online Gaming Law on the Cards

The government of Portugal is discussing a new law which would regulate online gaming. Drawn up by The Ministry of Economics, the new bill sets a controversial tax rate of 15 to 20 percent for online gaming companies wishing to offer their services locally and also seeks to partially protect the monopoly of state-run charity Santa Casa de Misericordia de Lisboa when it comes to social games and land-based bets. The new law would, however, allow offshore operators to offer a number of games including poker, virtual slots, bingo, sports betting and horse racing.

Back in 2012 it was revealed that a government committee was looking into legalizing online gambling in order to raise cash for state pension funds and to aid debt-ridden soccer clubs. This was after a Portuguese court ruled that the sponsorship of sports by online gambling companies was illegal. Under previous rules only the state-run charity Santa Casa de Misericordia de Lisboa could offer sports betting and lotteries.

The new act is becoming a matter of increasing urgency as Portugal’s economy continues to falter and income generated by online gaming would be split between the central and regional governments. Although the new move marks a significant change in policy regarding gaming in Portugal it has come under heavy criticism from the Remote Gambling Association (RGA) which in a statement described the new tax rates as both “punitive” and “unworkable.”

According to a statement released by Clive Hawkswood, chief executive officer the RGA, “The proposed punitive taxes on stakes of 8 to 16 percent for online sports betting in the present draft law will render the market unviable for the vast majority of online operators who might otherwise decide to apply for licences and invest in Portugal.”

In its draft form the new law would regulate the industry along similar lines as to other Western European countries such as France and Spain. It is estimated that a regulated online gambling industry in Portugal could raise € 250 million annually in license fees alone. According to local media sources, the new act could become law before the end of the year.

Russia
Deal Reached on Two Gaming Zones

The State Duma, the lower house of Russia’s state legislature, has ruled that two locations, one in Sochi, located on the Black Sea and host of the 2014 Winter Olympics, and the other in Crimea, will be designated special gambling zones in order to boost tourism and investment.

As previously reported, a new law put forward by Russian President Vladimir Putin could see the Crimea becoming a new gaming mecca after Russia took over in March. This was after Putin formally annexed the Black Sea peninsula amongst growing international condemnation.
Now two gambling zones will be established on the Black Sea. In Crimea it looks likely that casinos will be permitted in Yalta—a popular tourist zone which receives annually around 6 million visitors a year. Visitor numbers have dropped dramatically since the Russian takeover and it is hoped that a new gambling zone will see tourist numbers bounce back and then increase significantly long term.

Meanwhile in Russia, a new gambling zone will be permitted in Sochi—a sports and tourism area on the Northern slopes of Mount Aibga in Estosadok. In Sochi casinos would also be able to benefit from the infrastructure which was put in place ahead of the Winter Olympics this year. However, the exact location of each gambling zone will ultimately be up to local governments to decide.

First Deputy Chairman of the Duma Committee, Anatoly Karpov said, “The creation of a gambling zone in Crimea will attract additional investment to the region, create jobs and improve the tax base.” The new law could, according to some estimates, lead to an additional $720 million to the country’s economy with investments reaching as much as $1 billion.

Putin formally banned casinos in Russia in 2006 except within four specially designated remote gaming zones: Altai, Kaliningrad, Krasnodar and Primorsky in the Russian Federation. The law went into effect in 2009 but has been widely regarded as a failure as it led only to job losses and a huge increase in illegal gambling.

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