The restrictions are getting tighter. Across the EU and beyond
Legalbet and 4H present a longer than usual post about the current events in gambling.
The European Parliament has agreed to a draft set of measures to tackle illegal content on online platforms. The text was approved by Parliament by 530 votes to 78, with 80 abstentions. This will be used as the mandate to negotiate with the French presidency of the Council (until the end of June 2022), representing member states.
The Digital Services Act proposal defines clear responsibilities and accountability for providers of intermediary services, and in particular online platforms, such as social media and marketplaces. The DSA establishes a “notice and action” mechanism, as well as safeguards, for the removal of illegal products, services or content online.
Ivan Kurochkin’s comments
The Digital Services Act that was intended to provide a legal framework for the offering of digital services across the EU now faces criticism from more than 15 trade bodies, including the major European gambling association - European Gaming and Betting Association (EGBA).
The main concern of the EGBA (that it has recently raised in its official letter to the European Parliament) is that the Act's initial purpose was not in addressing every possible issue that may occur but to build a complementing foundation for various sectors that needed it.
However, the Parliament included additional amendments to the latest version of the act that may actually put barriers on online service providers, including online gambling operators. These amendments are a ban on targeted advertising, an extension of KYC requirements for hosting providers and a strict deadline to remove illegal content. Theу could make it harder for the online services providers to adopt the requirements of the Act.
Besides, the EGBA disagrees with the Act in terms of personal advertising since GDPR already covers the key areas related to personal data and the Act may overlap with the regulation and create an unnecessary collision.
The local regulator reported the Russian bookmakers target contribution for 2021. This is the money that Russian sport federations get from the sportsbooks. There were 113 federations and leagues that received a contribution. Total volume was estimated at 10 billion roubles (over $120m), an increase of 30% compared to 2020.
The fourth quarter saw the bookmakers paying the contribution according to a new legislation. The payments consisted of 1.5% of deposits with the minimum amount being 30 million roubles (around $382 000).
The regulator revealed to “Kommersant” the volume of the Russian market. The newspaper posted that this was about 1.1 trillion roubles ($14 billion).
4H Agency Consultant Sophia Balashvili believes that despite the fact payment transfer requirements were tightened several Russian bookmakers reported an increase of their contributions. It demonstrates the strong growth of the betting market in the country.
Sophia Balashvili’s comments
It should be noted that some bookmakers which were operating in the Russian market didn’t accept the new legislation. Vulkanbet, bwin.ru, and 888.ru paused their operations in the country. The reported results of those who have remained makes us believe that the decision to leave could be wrong. The market growth due to the sports getting back following the quarantine measures alongside Euro 2020 finally gave bookmakers something to cheer about.
There’s no reason to think that market growth in Russia will decrease this year as there will be at a minimum the FIFA World Cup in Qatar and the Winter Olympics that are about to start in China soon.
The United States
A Hawaii legislator has introduced a bill that seeks to legalise sports betting as has already happened in many other states. A distinctive feature of the proposal from Democrat representative John Mizuno is the tax rate. The bill proposes a 55% tax rate. It will be the highest betting tax across the United States should the bill be applied. Even New York and New Hampshire, the states with a highest rates now limit it to 51%.
Mizuno hopes that the day will come when betting will be available in the entire country. He said, explaining such local peculiarities, that Utah and Hawaii are the only states with totally banned gambling.
State representative Chris Todd has also reintroduced his own sports betting bill which he initially proposed in 2021. Todd’s bill proposes an online sports betting pilot programme, which if approved, would run through June 30, 2025. The pilot programme would allow the Hawaii Department of Business, Economic Development and Tourism to issue up to five online sports betting licences. The proposed fee is $30 million per license.
The local parliament supported reforms of the Law on Advertising in the gambling area proposed by the Armenian Minister of Finance Armen Hayrapetyan. The amendments have already been voted for in favour at the first reading. The law now will contain a list of places where gambling ads may be displayed and there will be little room for marketing outside of those.
The amendments mean that the ads will be totally banned across all media formats, including television, online, radio, and press. It will be allowed only within the premises of four-star and above hotels, border checkpoints, and in front of the buildings carrying out related business activities. Those who initiated these amendments ask the government to go the same way as Latvia, Estonia, Czech Republic, and Georgia.
Addressing Parliament Hayrapetyan pointed out that Armenia’s gambling sector had tripled since 2018. He believes that it may lead to the increase of problem gambling. Meanwhile bookmakers and online casinos paid $37m in taxes in 2021.
Ivan Kurochkin’s comments
Armenia is clearly following the path of Georgia by banning advertising across all media formats. However, at some points it has even got itself ahead of Georgia. In 2018 the gambling age limit was raised from 18 to 21 years in Armenia and a restriction was implemented that would allow only local gambling operators to advertise and target the local gamblers (those who are over the age of 21).
Only time will tell how this ban will affect the industry. However, it is clearly going to hit the sports industry since gambling often makes sufficient financial contributions to sports teams through sponsorship and advertising.
The local regulator has imposed a fine of €11,183 on Enlabs because Optibet (a brand owned by the company) encouraged their customers to gamble. It violates the local advertising law. The regulator believes that Optibet had done it via a terms and conditions Email.
The Supervisory Authority found that in August 2021 a newsletter titled “Update of Rules: New Games” was sent to 10,600 customers. It contained a link to the respective section of the website. The Regulator claims that the company encouraged the customers to partake in gambling instead of informing them. Due to the legislation that was applied last year it violates the gambling advertising ban.
Enlabs managing director Dainis Niedra thinks that it's absurd. The company is about to take legal action.
Dainis Niedra’s comments
This so-called violation was found by the regulator back in the Summer of 2021. We were ready for such an outcome and we consider it positive. Now we can take counter legal action to raise the issue of such absurd decisions at a higher level. The regulator has decided to interpret the new law that came into force from July 1 in their own way. The main idea of the law was limiting operators in the methods of encouraging to gambling by banning all bonuses, prizes, presents, and so on. However, besides the fine, we have already received a warning concerning the Responsible Gaming page of our website. The regulator claims that this content encourages people to gamble more as well.