Compliance Updates
Dutch Gaming Authority Imposes Penalty Payment Order on BlokDance BV
The Dutch Gaming Authority (KSA) has imposed a penalty payment on BlockDance BV for offering unlicensed games of chance. Offering games of chance without the required license is prohibited in the Netherlands. If the party does not cease the violation and keep it ceased, it will be imposed a penalty payment.
Investigation by the KSA has shown that BlockDance offers illegal games of chance on the websites bc.game and bcgame.lu. After a re-inspection by the KSA, BlockDance made the investigated website inaccessible to Dutch players. At that time, the KSA announced to the party that it would not impose an order subject to penalty payments. However, during monitoring, the sites appeared to be available again, which is why an order is now being imposed after all. Within four weeks of sending the order, the company must definitively stop offering games in the Netherlands, otherwise they will receive a penalty payment of €280,000 per week, with a maximum of €840,000.
On the sites investigated it was possible to create a player account, make deposits and participate in the illegal gambling offered. No technical measures were taken on the sites to prevent participation from the Netherlands.
The Netherlands has a regulated gambling market to better protect players. The KSA therefore takes tough action against illegal supply. With an order subject to penalty, illegal supply is often quickly stopped. Providers can also be fined for the period in which the illegal supply was available.
Compliance Updates
Swedish Gambling Authority’s supervision of the gambling market
The Swedish National Audit Office has examined the Swedish Gambling Authority’s supervision of the Swedish gambling market. The overall conclusion is that supervision is not sufficiently effective to meet the expectations expressed by the Riksdag and Government in connection with the reregulation of the gambling. market. This particularly concerns the fact that the Swedish Gambling Authority conducts few inspections, but also that its choice of which actors are selected for supervision is not based on well-founded risk analyses. The Swedish Gambling Authority also does not sufficiently follow up whether the supervised entities rectify the identified deficiencies.
On 1 January 2019, a license system was introduced for the Swedish gambling market. Under this reform, in principle all gambling for money must be operated under public control to protect players and to ensure revenues to the Government and for the purpose of public benefit. Essential preconditions for achieving the aim of the reform included substantial channelling of gambling to licensed operators and their compliance with the regulations. The Swedish Gambling Authority’s supervision of both the unlicensed and the licensed markets thus plays a central role in the reregulated system.
The Swedish National Audit Office considers that supervision in the form of inspection, in which individual license holders are examined and non-compliance has consequences is particularly important when there is a high risk of regulatory violation. From this perspective, the number of inspections of commercial online gambling and betting has not been sufficient in recent years. In the submarkets. where central government and public good have exclusive rights, supervision has been very limited in recent years. The Swedish National Audit Office considers that the perception and credibility of the system is directly linked to the regular supervision of all types of licenses and forms of gambling.
The Swedish Gambling Authority’s supervision of unlicensed gambling is important, as illegal gambling can undermine the legitimacy of the licensing system. At the same time, it can be recognised that, in practice, the Swedish Gambling Authority’s possibilities to take measures against illegal gambling are limited. The lack of clarity in the Gambling Act also hampers these efforts. This lack of clarity has been pointed out in the past without the Government taking initiatives to address the problem.
The Swedish Gambling Authority has given supervision lower priority in relation to competing tasks. These include license and permit applications, as well as government assignments and other tasks that have been added gradually without the addition of corresponding resources to the Authority. All in all, this has contributed to the limited scope of supervision. The Government has been aware of these circumstances but has not take of of informed the Riksdag.
The reregulation of the gambling market has involved a radical reform, implemented at a high pace. For the Swedish Gambling Authority, the initial years have entailed an intensive period of development. At times, adequate solutions have been arrived at quickly, while in other cases, the process has been more protracted. On the whole, the Swedish Gambling Authority has established appropriate processes and support for supervision and for managing conflicts of interest. However, the Swedish Gambling Authority has so far not followed up on the results of its supervisory decisions. The Authority therefore does not know whether the identified deficiencies have been rectified and thus lacks knowledge of whether the use of inspections has been cost- effective. The Swedish Gambling Authority also needs to develop its planning process for supervision; for example, its risk analysis needs to be more systematic.
The Gambling Act, which forms the basis of today’s licensing system, was designed as a framework law to allow regulation to be adapted to the rapid development in the gambling market. The Government has initiated several amendments to the Act and decided on several amendments to the ordinances to adapt the regulations and give the Swedish Gambling Authority increased powers and new tools. This is a positive development, according to the Swedish National Audit Office. The Government must continue to actively monitor developments in the gambling market and, if necessary. take measures to further develop the regulatory framework and ensure that the Swedish Gambling Authority has sufficient powers and effective tools for its supervision.
Recommendations
The Swedish National Audit Office makes the following recommendations.
To the Government
- Ensure that the Swedish Gambling Authority has the conditions to carry out effective supervision to a sufficient extent.
- Ensure that reliable and accurate information on the scope and results of the supervision are produced and inform the Riksdag accordingly.
- Investigate the question of the scope of the Gambling Act in order to clarify in what cases online gambling is covered by the Gambling Act. In this context, consider the possibility of expanding the scope.
To the Swedish Gambling Authority
- Develop the arrangements for planning, managing and following up supervisory activities. This should include systematic risk analysis. There should also be longer-term planning, in addition to the annual supervisory planning.
- Work actively to increase the scope and effectiveness of the Authority’s inspections of both the licensed and unlicensed gambling markets. This should include an examination of the conditions for reallocating resources within theu Authority.
- Continue to develop the Authority’s methods and support for supervisory activities. This should include procedures to verify that the supervised entities rectify the identified deficiencies.
Compliance Updates
UGC Once Again Appeals to Google to Stop Blocking Legal Gambling Ads
The Ukrainian Gambling Council (UGC) has appealed to Google to stop blocking all advertising of Ukrainian licensed gambling organisers, as it does not comply with the current legislation, leads to losses for both business and the state budget of Ukraine, and helps illegal operators to enrich themselves.
Combating illegal online gambling advertising is an important component of counteracting the development of the shadow gambling market. However, over the past year, an unbalanced policy in this regard has led to extremely negative consequences – search engines have begun to block all advertising related to the activities of primarily licensed Ukrainian gambling market organisers that have established and unchanged domain addresses in the Ukrainian Internet segment. However, illegal operators, who can easily change the names of their websites and move from one domain to another (in different jurisdictions), have hardly felt the effects of the bans.
In fact, Google considers Ukraine as a country where all types of gambling, except lotteries, are currently prohibited, and it blocks advertising mainly from legal companies. This situation leads to negative consequences and the expansion of the illegal services market. Licensed companies have obtained state licences and launched marketing campaigns, including sponsorship of sports competitions, but they cannot legally advertise their services online. As a result, companies lose customers and profits, and the state loses taxes.
It is worth noting that lotteries are among the services allowed on Google in Ukraine. However, all lottery operators, without exception, operate in Ukraine on the basis of licences that expired back in 2014. In fact, lotteries imitate gambling – betting, online casinos, slot machines – without having the appropriate licences. They also do not pay any taxes and licence fees to the budget. However, lottery operators are not subject to any restrictions on gambling advertising.
In order to remedy the situation and streamline the system of prohibitions in order to prevent further losses of business and state funds, the Ukrainian Gambling Council (UGC), a non-governmental organisation that unites licensed gambling organisers, has once again appealed to the management of the regional office of Google in Ukraine, namely, Paul Terence Manicle, Director of Google LLC, and Tetiana Lukyniuk, General Director of Google Office in Ukraine, with a request to lift the existing restrictions and provide an opportunity to officially advertise gambling, in particular, on the territory of Ukraine using Google services:
• activities related to the organisation and conduct of gambling in gambling establishments;
• organising and conducting casino gambling on the Internet;
• organising and conducting betting activities in betting shops and on the Internet;
• organising and conducting gambling in slot machine halls;
• organising and conducting poker games on the Internet.
Also, to remove the existing restrictions and allow official advertising of mobile applications on the territory of Ukraine using Google services and provide all opportunities for the official placement of mobile applications for organising and conducting online gambling on Google services.
Balkans
Bulgaria’s National Revenue Agency Shuts Down More Than 2500 Unlicensed Gambling Websites This Year
So far this year, Bulgaria’s National Revenue Agency (NRA) has shut down over 2500 gambling websites operated by entities without an active gambling licence under the gambling law, NRA said in a press release.
In September, NRA Executive Director Rumen Spetsov issued over 640 decisions to halt the operations of online betting platforms without the required permits in the country. After the NRA publishes a decision, the affected websites have three days to cease operations. If they fail to comply, the NRA refers the case to the court, which may instruct internet service providers (ISPs) to block access to the non-compliant websites.
Decisions by the NRA and court rulings are available in the Online Gambling section of NRA’s website. NRA also keeps an updated register of gambling websites run by entities lacking a valid gambling operations permit.
NRA encourages online users to report unlicensed betting websites by emailing a specific address. The report should include the website’s name and the user’s ISP.
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