Paul Blog November 11, 2018
This is an interesting week for news as Team Lottery is showing some real fight in the battle against illegal online gambling.
The Dutch Gaming Authority Kansspelautoriteit (KSA) has imposed a fine of 350,000 euros on two i-Gaming operators for offering unlicensed and illegal gambling services to players in the Dutch market. One is based in Cyprus and the other in Curacao. ZEAL Group (parent company to a family of online B2C “grey market” operators like Tipp24, Ventura24, and MyLotto24, and online B2B technology platform provider Lottovate) just lost a court ruling that said its Ventura24 lottery brokerage service requires a license from Sociedad Estatal Loterias y Apuestas del Estado (SELAE), the operator of the Spanish national lottery. No such license has been granted, and according to a statement from Zeal “is unlikely to be granted in the future”.
Germany has been besieged by ‘bet-on-the-outcome-of-the-lottery’ operators like Lottoland. And now, Lotto Rheinland-Pfalz has just prevailed in a lawsuit against a “Gibraltar-based operator which sells bets on the outcome of the lottery draw”. Oddly, the news story does not state who the operator is, but Lottoland is based in Gibraltar and sells bets on the outcome of the lottery. In any event, it is great news that governments are taking legal action to prevent online violation of gambling laws and regulations.
Pan-European crime fighters Europol collaborated with Portuguese authorities to take down an illegal cross-border online gambling operation, arresting 31 people in Portugal and Luxembourg.
Following close on the results of the Switzerland popular vote that confirmed that people want the rule of law and prevention of criminality to apply just as much to the online world as it does to the land-based world, and that this principle in fact supersedes notions about “freedom of the internet” which has been used by illegal gambling operators to justify their criminal activities.
We might go so far as to hope that a “tipping point” has been reached. German courts taking action against illegals is a huge (and long overdue) step forward. It is extremely encouraging to see that international agents of law enforcement like Europol are now engaged in the battle against illegal online gambling. And Netherlands and Spain and others are taking action to force operators to comply with the laws and this is cause for hope. The UK Chancellor of the ExchequerUK issued a statement that they are raising the tax on off-shore i-gaming operators from 15% to between 20% and 25%. I’m not sure I want to go on record as supporting tax increases, but at least it levels the playing field with traditional lotteries which turn over an even higher percentage to good causes and/or the government.
Now comes the next step. Fines and legal action against those who violate the laws need to be enforced in order to be effective. The Czech government, for instance, has levied over $20 million USD (CZK455 million) in fines against illegal gambling operators. But out of $20 million in fines, they have collected only $10,750! The problem is that some jurisdictions (possibly including places like Curacao, Cyprus, Malta, and Gibraltar) do not respect the laws of other countries and refuse to domesticate judgments against companies which are based in their jurisdiction. If illegal operators are given safe harbor, they will be able to continue to generate huge profits for private shareholders by violating the laws of the markets where the consumers reside, and that in spite of legal judgements against them.