European News Roundup

Details Emerge Over New Casino

Cyprus will grant its first casino license within a year, according to government sources. Aimed primarily at attracting foreign investors, the first casino resort will be large-scale and will be part of a five-star hotel with at least 500 rooms. Once complete, the new casino resort will be one of the largest in Europe with at least 100 tables and 1,000 slot machines. The operator also has the option to double the size of its gaming facilities by applying to the newly established regulator the National Gaming Authority (NGA).

The integrated casino resort may operate 24 hours per day, seven days per week, and smoking will be permitted on the gaming floor. The bill also contains provisions that allow for the license holder to run five slot parlors on the island, each of which may have up to 50 electronic gambling machines on the premises. The annual license fee is set at € 2.5 million for the first four years and then € 5 million annually for the next five to eight years, after which time the new regulator will be able to fix the license fee every four years. The casino will pay an additional 15 percent on gross gambling revenue.

Some controversy had been growing over the location of the new casino with each municipality vying for the license. However, the new bill sidesteps this issue by allowing the operator to choose the location of the new resort on the island. According to the policy outline document published by the government, planning applications will be fast-tracked and, once complete, the casino “will be a blend of attractions and activities so as to be internationally recognized.”

Cypriot government spokesman Nicos Christodoulides applauded the new bill, announcing, “This will be one of the most important infrastructure projects in Cyprus in coming years.” Casinos were first singled out as a means to raise revenues in April last year when President Nicos Anastasiades announced that his government would green-light casinos as part of a 12-point growth plan.

United Kingdom
Ritz Wins Court Battle over Outstanding Debt

The Ritz casino in London has won a legal battle against a Saudi heiress who failed to pay half the sum of a £2 million debt. Noora Abdullah Mahawish Al Daher ran up the debt while playing punto banco but later argued that she was a gambling addict and that the casino should have stopped her from gambling.

The wife of Oman’s foreign minister handed over cheques, some of which were not honored and later said that staff had encouraged her to continue to gamble rather than denying her extra credit once her credit limit was reached. The heiress reached the £1.7 million credit limit within a matter of hours and then asked that her credit be extended to £2 million. When the debt was not honored, the Ritz took the matter to court, demanding that a debt of £1 million be paid, but the heiress put in a counterclaim that contends staff had taken advantage of her gambling addiction.

However, High Court Judge Anthony Seys Llewellyn ruled against her, stating that there was no evidence that her gambling had spiralled out of control or that she was a gambling addict. Nor did the casino have a duty of care toward her.

Explaining his decision, he said that: “Mrs. Al-Daher is a person of wealth unimaginable to the ordinary person and, I suspect, to many of moderate or substantial wealth. The enormous sums she gambled and the enormous losses she sustained were within her means. Nor did she show any signs of distress, irritation, anger or loss of control that evening.” He also pointed out that it was “striking” that “she and her family gambled away $5 million in Las Vegas in June, some two to three months later.”

Gaming Association to Battle New Law in Courts

The Gibraltar Betting and Gaming Association (GBGA) will tackle new legislation, which it contends is “burdensome” and poses “risks” to consumers, head on in the High Court of England and Wales. Local operators have pledged to move against the United Kingdom’s new Gambling Licensing and Advertising Act, which is to go into effect this month and which calls for a 15 percent Point of Consumption (POC) tax on gross profits made by offshore online gaming companies offering their services in the U.K.

While it was legal for U.K. citizens to take part in remote gaming before 2005, it was illegal for online gambling firms to be located in the U.K. Consequently, 90 percent of online gambling operators offering their services in the U.K. were located in places where they were either exempt from taxes or where taxation was low. Online operators registered in Britain now pay a 15 percent tax on gross betting profits while those registered in Gibraltar will no longer be exempt from this tax. In early 2013 the GBGA warned that the new tax could have a potentially disastrous effect on the local economy and would challenge the new legislation in the European Courts, claiming that the new tax would offer an unfair advantage to betting companies located in the U.K., was designed for economic reasons, and is discriminatory.

In its submission to the High Court of England and Wales the association argues that the new law will “encourage the growth of and migration to unregulated or poorly regulated operators which will present genuine risks to the British consumer.” Because the new law is set to come into effect this month, the GBGA has requested that the hearing be expedited.

In a statement GBGA Chief Executive Peter Howitt commented, “It is extremely disappointing that our concerns have not been listened to by the U.K. Government, and that the Gambling Commission’s plans to expand its remit have been accepted. The only beneficiaries of this change are the U.K. domestic industry and the Gambling Commission itself, which has persuaded the U.K. Government that it should be the global regulator of this high tech and complex industry. It has neither the resources, the legal powers, nor the skills to operate successfully across the globe.”

Online Market Opens for Online Slots and Exchange Betting

The Directorate General for the Regulation of Gambling (DGOJ) has given the go-ahead for online slots and exchange betting. In a long-awaited move, the regulatory body announced in an official statement that the new regulations will strengthen the current market and also will have a “positive impact regarding the protection of particularly vulnerable groups, the fight against fraud, generating tax income and ultimately the creation of an environment in which users can take part in this activity in a safe and responsible manner.”

The DGOJ is now in the process of reviewing license applications and both online slots and exchange betting should be offered live within the next six months. Licenses will be valid for five years, but operators will have to pay a steep 25 percent on slot revenue. Although it is believed that the new law will fail to attract a significant number of new operators in the region due to the high tax rate, many operators will take advantage of the new regulation in order to boost revenues. While sports betting recorded increased revenues in the last quarter of 2013 at present, according to statistics released by the DGOJ, online casino revenue only accounts for only € 8.7 million of the total regulated market.

Online gaming has been permitted since May 2011 when Spain passed a new law regulating online gambling, and in June 2012 started granting its first licences to offshore operators. The new law paved the way for a wide number of games, including sports betting, poker and other casino games with a few exceptions, such as exchange betting and online slots. With exchange betting and online slots now permitted the online industry could see a well-needed boost after relatively poor returns due to the high online gambling tax rate.