Advertising for remote gaming 

There is no such thing as bad publicity…

There is only « illegal » publicity

Thibault VerbiestAttorney at the Bars of Paris and Brussels

Thibault.verbiest@ulys.net

European Gambling Briefing25 -26 April 2005

Law of : • New Technologies • Intellectual Property • Media and Entertainment • Commercial Law •

EU Regulatory Frameworkfor commercial communications

E-commerce Directive

All online activities Notion of “commercial

communication” General obligations Safe harbours &

liability

Directive privacy & electronic communications

Part of Telecom package

Cookies & Spyware

Imposes OPT-IN regime

1. Am I allowed to advertise ?

Two basic principles

What is illegal offline, should be illegal online

In most Member states it is only allowed to advertise

IF the gaming activity is legal Schindler case Bacardi case (TV) Consumer protection legislation

2. Is the gaming activity legal ?

National law: (see annexes)

General principle: “the organization of games is illegal unless authorized”.

Exceptions : restrictive application of criminal law find the loophole: P2P, betting exchange & Dutch Betfair cases

Remote gaming is a de facto cross-border service

Consider international aspects

Malta 2004 Remote Gaming Regulations 4 licence classes for casino, lotteries, betting, poker and ‘hosting’

LGA: Three-step application process (5-8 weeks)

Favourable tax regime under ITC structure

ITC must provide (gaming) services on cross-border basis

Advertising (art. 60): allowed within the following limits (a) remote gaming promotes or is required for social

acceptance, personal or financial success or the resolution of any economic, social or personal problems;

(b) endorsements by well-known personalities that suggest remote gaming contributed to their success;

(c) is specifically directed at -18y; (d) exceeds the limits of decency.

3. Does European law allow the cross-border provision and promotion of gaming services?

The Internal Market Strategy for Services  Remove all remaining barriers in the Internal Market Directive 98/48 : e-gaming is an information society service E-gaming regulation must be notified (Belgium, Denmark?) Electronic commerce  Directive : Internal Market clause Member States may not impose additional obligations Proposal for a Directive on Services in the Internal Market Create a real Internal Market – Home Country control

COMMISSION

no : EC Law not applicable

art.49: freedom to provide services1)economic activity ? Restrictions may be imposed, provided that 3) art.49 not discriminatory ? 4) art. 46 justified by the Treaty ? Yes : 2) goods or service ? 5) necessary and proportionate ? art.30

EC

JUS

EUROPEAN

MARKET?

ECJ (1): From Gambelli to Placanica and...

Gambelli & Lindman

Decisions of 6 and 13 November 2003 confirm the standing jurisprudence, but concrete conditions are imposed:

Presence of a de facto consistent gaming policy; Public grounds may not be used to protect market from

competition; Country of Origin Principle should be considered; Clear and present risks; Statistical or other evidence.

ECJ (1): Post-Gambelli case-law Post-Gambelli case-law is very diverging, sometimes conflicting

Decisions of Supreme and Constitutional courts in Finland, the Netherlands, Sweden, Belgium, Germany and Italy

Netherlands: Summary proceedings vs main proceedings Germany:

BGH: 1 April 2004: questions the legality of German gaming policy in light of Gambelli BVerG: 26 August 2004 – 15 December 2004: Gambelli did change something Constitutional Court: art. 12 case: July 2005?

Norway: EFTA case Italy: -“Bruno Corsi” case –> Placanica case - Consiglio di Stato 22 February 2005

- EC competition law: Sisal & Lottomatica

Need for EU clarification?!: New jurisprudence of the European Court of Justice: Placanica and.... European Commission

To promote the development of e-commerce in the Internal Market: Free provision of information society services and the internal market clause (Internal market clause – art. 49)

Article 1.5 excludes “gambling activities which involve wagering a stake with monetary value in games of chance, including lotteries and betting transactions.”

EU Commission (2) Electronic Commerce Directive

Remarks & considerations:

Scope of the exclusion: Spain?

Free games? Promotion of « play for fun » landing pages

Remote gaming = information society service Notification: Denmark: article 10 of March 2003 Act?

Review every two year First Report on the application of the electronic commerce Directive July 2005?

First report e-commerce (21 November 2003)

“Online gambling, which is currently outside the scope of the Directive, is a new area in which action may be required because of significant Internal Market problems - see for example Case C-243/01s of the European Court of Justice (ECJ press release CJE/03/98), concerning criminal proceedings in Italy against persons collecting Internet bets on behalf of a bookmaker legally licensed in the UK. The Commission will examine the need for and scope of a possible new EU initiative. In addition, the Commission is examining a number of complaints it has received concerning cross-border gambling activities. “

Scope of the exclusion: forum shopping & distortions Regulation in new Member States (Malta) Complaints: Denmark, Sweden, the Netherlands, Belgium, Germany, Greece, Finland, France, ?

EU Commission (2) - e-commerce Directive

Proposal for a Directive on Service in the Internal Market (Jan 2004)

Create a real Internal Market for services, including gambling services

Provision/promotion of Services Application of the country of origin principle (Internal

Market Clause) Exception for “sensitive areas”, including gambling services

President Barroso March 2005 statements on carve out for health and services of public interest

EP Report of April 2005

EU Commission (2) – Service Directive

4. What about the rights of the consumer-gambler?

General principle : In most member states it is not illegal to participate in ‘illegal’ games >< Poland, Germany

The Netherlands: website Department of Justice

Proposal for a new Service Directive

ECJ Lindman case (13.11.2003)

Conclusion? National authorities easily grant competence

and apply national law Under national law, most advertising will be

illegal unless license was granted (?) Skill your creativity – find the loopholes?

Guerilla advertising: Beckham ball Sponsorship? Press coverage? Freedom of speech? media and blogs

Sponsorship

Press coverage

No commercial communicationFreedom of press (ECHR)“Schöne Wetten” case (Ger. Die Welt)

Freedom of Speech - Blog

Freedom of Speech Guaranteed by International public law and national

constitutions Linked to freedom of press (internet?) USA:

Tropical Paradise v. Discovery Communications Casino City case – Ruling 15.02.2005

Article 10: EU Convention for Human Rights Limitation by formal Act: precise restriction - Malta Protect general interest Necessary in a democratic society

“commercial” speech & access to information?

MEMBER STATE Regulation

(annexes)

The Netherlands The 1964 Act on games of chance :

Promotion of games of chance in the Netherlands without a license is forbidden.

Stichting Reclame Code: Code of Conduct for casino games and gaming machines (RKC) Purposes may not be other than a responsible participation and to incite one’s interest May not stress the possibility of winnings May not give the impression that gaming is without risk May not be directed at vulnerable groups or minors May not be displayed at events of venues frequently visited by minors or other

vulnerable groups

New advertising code for State monopolies 31 March 2005?

The Netherlands - Jurisprudence:

 

Foreign operators must adopt online verification systems to block access to their website from the Dutch territory?

Lindman?

Summary proceedings Exclusive rights De Lotto and Holland Casino confirmed Supreme Court decision of 18 Feb. 2005

Main proceedings: Arnhem: interlocutory judgment of 2.6.2004 Proof of a consistent gaming policy

Belgium: Casino Games , 1999 Casino ActPromotion of non-authorized games of chance is an offence, even when the operation is established outside Belgium (§ 64, 1999 Casino Act)

Lotteries National Lottery Act of 19 April 2002:

Monopoly to the National Lottery Modification of 24 December 2002: notification Directive 98/48

Act of 31 December 1851 on lotteries: charity and welfare

Article 23, 10° of the 1991 Consumer Protection Act Publicity that incites the hope to win a product, service or other

advantage by chance is forbidden: Exclusion: legally authorized lotteries

No publicity for authorized games of chance and casino games

Decision of the Constitutional Court (March 2004).

France - Old regulatory framework The regulatory framework

Games of chance: Act of 12 July 1983 Casino operations: Act of 15 July 1907 Lotteries: Act of 21 May 1836

Application in an online environment ? Casino and notion of “fixed establishment” Online gaming activities are subject to this legislation, thus a

license is required Yahoo-case: universal competence

France – Publicity : Lotteries: article 4:

Publicity for unauthorized lotteries is forbidden, irrespectiveof the media used

Casino games and games of chance: No specific dispositions for publicity General Regime of the French Criminal Code (§ 121-6,§

121-7)“He who knowingly contributes to a criminal offence shall be punished as if he was the author of the offence”

Enforcement on cross-border provision/promotion Dellner case (Cass. 22.05.1997)

Trucy Report on the French gaming policy!

Germany Federal Criminal Code, StGB: § 284,285 and 287

Organization of” and “participation in” is considered as a criminal offence

Advertising: § 284, 4 Lotteries: § 287 (no participation)

Länder (16) : Competence to derogate from the general prohibition and adopt

their proper gaming policy & issue license Staatsvertrag (State Treaty) of July 2004: article 7: public offer <

demand

Private operators with a former DDR (GDR) Licence

Germany A lot of case law and ongoing litigation: World Cup 2006?

BGH: 1 april 2004: questions the legality of German gaming policy in light of Gambelli (Schöne Wetten)

BVerG: 26 August 2004 – 15 December 2004: Gambelli did change something

Constitutional Court: art. 12 case: “landmark decision” by July 2005? Urge authorities not to be too restrictive

Italy Italian Criminal Code: articles 718-722 :

The “organization of” and “participation in” games of chance are criminal offences

Publicity for casino games or games of chance is not allowed

Act n° 401 of 13 December 1989 : Monopoly for CONI and UNIRE (sports competitions) If you have a license, you can promote your activities Final decision in the Gambelli case still pending

Case-law Bruno Corsi -> Placanica case Stanleybet DTC: Consiglio di Stato 22 February 2005 Competition law: Sisal & Lottomatica

Spain Untill 1975: the Gaming sector was centralized Spanish Constitution of 1978:

The decentralized Comunidades Autónomas (CCAA 19) have an almost exclusive competence in the field of gaming activities

Comunidad Autónoma de Aragón: Article 12 of the Act of 28 June 2000 Publicity for games is forbidden, irrespective of the media used Government has the competence to adopt a Decree derogating from this prohibition Decree n° 159/2002 of 30 April 2002: commercial lotteries and games

Andalucia: VCBet – Equiniela

Loterias y Apuestas del Estado (LAE) Exclusive competence for games that exceed the scope of one CA LAE claims the monopoly for remote gaming

Portugal Decree-Law 422 of 2 December 1989 on

casino games License is required, 6 requirements Advertising for gambling or casino games is forbidden Advertising for venues on which casino games are

organized together with other services (restaurant, shows, etc.) is allowed

Advertising Code Approved by Decree-law No. 330 of the 23 October 1990 Prohibits advertising of games of chance (§ 21) Anomar case

United Kingdom –Current framework § 42 of the Gaming Act 1968 and GuidelinesGaming Board

Advertising is possible but restricted Classified advertisement: directed at a certain public Factual information: name, address, logo and limited details about

gaming facilities Newspapers and magazines: A4 size Online: passive website is not covered by the Guidelines, others OPT IN Television: Independent Television Commission (ITC): Advertising Code Advertising Standards Authority: CAP Code

  Lotteries

Lotteries and Amusements Act 1976 and Lotteries Regulations 1993 National Lottery Act 1993 Schindler - Millions2000 case

United Kingdom –Gambling Act 2005 The UK an E-gaming Hub?

What is the status? Secondary legislation, Tax & Codes of Conduct

Advertising is broadly defined, including sponsorship

Advertising for licensed gaming activities is allowed, particular rules

Offence to promote or advertise illegal gambling Territorial application: remote gambling & remote advertising Cross-border advertising? From and towards UK? EEA?

Delegation towards the Secretary of State and Gambling Commission (Advertising Code of Practice - article 23)

Denmark National Internet Gaming Strategy, 18 June 2001Maintain control over the gaming market and protect the monopoly

ISP’s block access to foreign sites Blocking credit card payments, PSP Regulate internet gaming Rigid monitoring and certification process for licensed operators International cooperation Ideas or reality?

New Gaming Act (Law no 204 of 25 March 2003) Article 10: provision and promotion of foreign games Ladbrokes article 49 procedure Notification? Formal complaint: Commission inquires into Danish restrictions on sports

betting (30 March 2004) Commission decides to take further action

Sweden 1999 Casinos Act 1994 Lotteries Act, as modified:

August 2002: online gaming regulatedLotteries communicated by means of electromagnetic waves (§21)

Publicity, §38: “It is not permitted, in commercial operations or otherwise, for the purpose of

profit to promote participation in unlawful lotteries arranged within the country or in lotteries arranged outside the country”

“License is required and advertising is subject to the 1995 Marketing Act and Code of Conducts”

Non-profit associations Administrative Supreme Court (Regeringsrättens) 26 October 2004

Malta 2004 Remote Gaming Regulations

4 licence classes for casino, lotteries, betting, poker and ‘hosting’

LGA: Three-step application process (5-8 weeks)

Favourable corporate tax regime under ITC structure (4.17%)

ITC must provide (gaming) services on cross-border basis

Advertising (art. 60): allowed within the following limits (a) remote gaming promotes or is required for social acceptance, personal or financial success or the resolution of any economic,

social or personal problems; (b) endorsements by well-known personalities that suggest remote gaming contributed to their success; c) is specifically directed at -18y; (d) exceeds the limits of decency.

Greece

Blanket prohibition under Act 3037/2002 encompasses electromechanical and electronic games (<-> EU complaint)

Article 4 of Law 2206/1994 forbids the exploitation of a casino without a license (12 licenses after public tender)

OPAP mainly opposes internet betting on grounds of Law 2433/1996 which prohibits their operation as well as their advertising