Opinion | Wednesday, 10 October 2007

Italian licenses

Quoting the Times of Malta , the island is riding high on a crest of popularity amongst international operators looking for a remote gambling license. There are already 84 internet gambling operators licensed on the island. A letter of intent has been issued to 76 others and the applications of 36 companies are pending.
All these applicants have found adequate bandwidth and the demand for more bandwidth has mushroomed as the island makes its name stand out as a premium hub in the Mediterranean.
It garnered names such as Betfair, Intercasino, William Hill, Littlewoods, Playboy Casino and Virgin Games, CBM Bookmaker, Cyberzlots and a number of German operators. It is all to the credit of Mario Galea, chief executive of the Lotteries Gaming Authority ( LGA ) the “soft spoken” architect who build it all up from scratch in four years touring the globe hoisting the Malta brand . He has just returned from hosting a mega pavilion at EIG in Barcelona. Now that Malta attracted so many world-class operators in such a short space of time are there any hurdles ahead for the remote gambling industry. Yes, the toughest challenge for the industry remains the State monopolies blocking access in almost all the 27 E.U countries. Typically operators are blocked into entry in Italy unless one registers for a license. For this purpose , the Rome conference which takes place at the Sheraton Hotel on 21 st November will discuss the auction of licences in Italy as a means of entry into this lucrative albeit blocked market. This is a sequel to the successful IGE organised in Como last May. Sadly protectionism is still rampant. The E.U Commission has warned France, Germany and Italy, among others, that they are potentially in violation of rules seeking to create a single market in goods and services across the EU, for public and private sector providers alike. The protective stance taken by German politicians when it comes to the country’s state monopolised gambling industry is well known.
In its current form, a controversial treaty between the sixteen German states prohibits all forms of Internet gambling in Germany, with the exception of horserace betting, and extends the monopoly on lotteries and sports betting services to the state controlled Lotto- und Totoblock for an additional four years, until 2012.
Some European countries have taken aggressive steps to try to stop private- sector online gambling companies from outside their borders.
State gambling monopolies among European Union member nations came under the media microscope this year. To their defence, while abundantly promoting their own products , monopolistic states argue the need to block overseas competition under the doubtful pretext to control addiction and money laundering.
France was the first to block Malta’s own ZeTurf website and Bellmed its internet service provider from supplying horse betting services to French citizens.
‘Stanislas Pottier, special adviser to French Finance Minister replied in its defence of state protectionism that “We are open to discussion but so far we haven’t seen other means, and convincing means, of reaching those public interest objectives, and at the same time opening the market.”
Italy so far operates an embargo against cross-border services unless the incumbent applies for an Italian license.
The European Commission - headed by former Irish finance minister Charlie McCreevy wants to open up markets in the 27 nation EU, if necessary resorting to European Court of Justice ( ECJ ) actions to enforce compliance with the Union’s requirement in article 49 for the free movement of trade and services. Thus far, the Commission has taken action against 10 of the 27 member nations in an initiative to clear away traditional state monopolies. But infringement notices take time to yield results.
Most recently, McCreevy’s staff warned France and Sweden to welcome foreign sports betting companies or face lawsuits as soon as this year, and news reports indicate that France has responded by meeting EU officials to negotiate on the issue . McCreevy is reported to comment, “We’re supposed to have an open market.”
According to the UK-based Global Betting & Gaming Consultants the rewards for ending state-run monopolies on sports betting and lotteries could be considerable, increasing the European market 23 percent to about $117 billion.”
For Malta our baptism of fire came when Italy had unilaterally declared late in 2005 that all websites which do not carry an Italian license are declared illegal and ISP’s were forced to block access to Italian punters. Yet the change of government last year has seen Prodi take a U –turn in the approach towards a partial liberalisation. Rome did award new gaming licences to a range of national and international companies vying for the chance to run betting shops, kiosks, casinos and online services. The entire online gaming industry, which saw its value plunge by more than half virtually overnight after the US tightened its laws on online gaming, is now regrouping around Europe in particular heading to Rome as it is shortly about to issue its second auction of remote gaming licenses. This topic was amply covered by international speakers at the IGE conference in Como where to its credit LGA offered the services of two compliance officials as speakers. This came hot on the heels of the Placanica judgement issued last March by ECJ which ruled in favour of liberalisation of cross-border services.
Placanica’s verdict was concerning the prosecution of middlemen who served as go-between for gambling Italians with the UK based Stanley International Betting.
This ruling solidifies the ECJ’s verdict in 2003 concerning Gambelli, saying that Italian legislation which allows only the government exclusivity to provide bets in fact broke EU regulations.
What is more exciting is that as a result of lobbying there exists the possibility of Poker tournaments will be legalised in Italy. This topic was first mentioned at IGE, a conference 4pa organised by GMM Business Solutions and Zampores in Como, Italy last May.
Five months down the line and article 38 of law 248/2006 will be watched closely by EEA poker operators as it may be the key to unlock the vast treasures of Italian poker.
All eyes and ears will be watching for an announcement on the Italian government’s official definition of skill gaming, and whether it will embrace poker when Article 38 of law 248/2006 .
As can be expected this issue will be one of the hot topics discussed at the Rome conference to be held at the Sheraton Hotel on 21st November where entrance is free. This is an opportunity not to be missed as already a number of international operators are queuing for the second auction of licenses in Rome next month. So far some 17 000 remote gaming licenses were created, covering horse racing, sports betting and skill games.
The Economy Minister Signor Padoa-Schioppa is expected to finally sign off on article 38 of law 248/2006, which will enable operators to offer a range of versions of poker as well as online versions of other card games popular in Italy. Other skill game offerings will include draughts and Sudoku. Casino games such as roulette, however, will not be licensed in Italy, as currently they are considered as possessing no element of skill. Definitely all roads lead to the Eternal city next month as the race for Italian licences has reached fever pitch. The Rome government is reportedly considering allowing poker tournaments to be open to players from other EU Member States. Can you afford to miss out? Register today to a complimentary pass .
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George Mangion
[email protected]
Director ;GMMBusiness Solutions