Official magazine of the International Masters of Gaming Law
®
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INTERNATIONAL MASTERS of GAMING LAW MAGAZINE
VOLUME 4 | NO. 4 | DECEMBER 2024
INTERNATIONAL PERSPECTIVES
PLUS:
STEPS FORWARD AND BACK IN SCANDINAVIA INTERNATIONAL RAMIFICATIONS OF MALTA’S BILL 55 THE BLACK MARKET: ACTIONS TO TACKLE ILLEGAL GAMBLING ASIA IN REVIEW: 2024 A YEAR OF CHANGE
AND MUCH MORE!
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IMGL MAGAZINE | JULY 2023 IMGL MAGAZINE | JANUARY 2023
MALTA’S FATF GREY-LISTING IMGL OFFICERS 2024
Officers of IMGL for 2024
MATTHIAS SPITZ Assistant Secretary MELCHERS Law HEIDELBERG +49 62 2118 50141 M.SPITZ@MELCHERS-LAW.COM
QUIRINO MANCINI President WH PARTNERS ITALY ROME, ITALY
ERNEST C. MATTHEWS IV Vice President, Affiliate Members INTERNET SPORTS INTERNATIONAL LAS VEGAS, NEVADA +1-702-866-9128 ERNEST@ISISPORTS.COM BIRGITTE SAND Vice President, Affiliate-Regulator Members BIRGITTE SAND AND ASSOCIATES COPENHAGEN, DENMARK +45 24 44 05 03 BS@BIRGITTESAND.COM
+39 06 322 1485 QUIRINO.MANCINI@ WHPARTNERS.EU
MARC DUNBAR Executive Vice President JONES WALKER TALLAHASSEE, FLORIDA +1 850 214 5080 MDUNBAR@JONESWALKER.COM
COSMINA SIMION 1 st Vice President WHSIMION & PARTNERS BUCHAREST, ROMANIA +40 31 420 6225 COSMINA.SIMION@ WHSIMIONPARTNERS.RO
KATHRYN R. L. RAND Vice President, Educator Members UNIVERSITY OF NORTH DAKOTA LAW SCHOOL GRAND FORKS, NORTH DAKOTA
+1 701 777 2104 RAND@LAW.UND.EDU
PETER KULICK 2 nd Vice President, Treasurer DICKINSON WRIGHT PLLC LANSING, MICHIGAN +1 517 487 4729 PKULICK@DICKINSONWRIGHT.COM
KATE LOWENHAR-FISHER Assistant Treasurer EXECUTIVE VICE PRESIDENT, CHIEF LEGAL OFFICER EVERI HOLDINGS INC KATE.LOWENHARFISHER@EVERI.COM
PHIL SICUSO Assistant Treasurer BOSE MCKINNEY & EVANS, LLP INDIANAPOLIS +1 317-684 5265 PSICUSO@BOSELAW.COM
SUSAN BREEN Secretary MISHCON DE REYA LONDON +44 20 3321 7434 SUSAN.BREEN@MISHCON.COM
IMGL MAGAZINE | JANUARY 2023 IMGL MAGAZINE | DECEMBER 2024
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PRESIDENT’S WELCOME
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Ending the year on a high
QUIRINO MANCINI President INTERNATIONAL MASTERS OF GAMING LAW
Dear friends and colleagues, Although it is starting to feel like a distant memory, many of us are still coming down from the high that was our Rome conference in partnership with IAGR. You will no doubt have heard about the success of the event from record attendance, a hugely diverse audience, impeccable hospitality and conference sessions of the highest quality. It was an organizational triumph and the many personal expressions of appreciation that I have received bear witness to that fact. For those of you who were not able to attend, you have the opportunity for a small taste of what we enjoyed with a conference report on pXX and reflections on Responsible Gaming from one of our panels. While we were in Rome, we gave the green light to our two conferences in 2025 which will be in Vancouver (April 23-25) and Lisbon (Sept 17-19). I would encourage you to add these dates to your calendars now so you don’t miss out. The team behind the Rome conference was small but dedicated with many hours being spent by both IMGL and IAGR members and staff. I will not list them all here, but they can be assured of all our thanks and appreciation for their monumental efforts. I would, however, like to single out my opposite number at IAGR, Ben Haden, for being such a super partner and a delight to work with. I think both our organizations are stronger as a result of our partnership and we all look forward to joining forces again in the future. Having a common platform facilitating communication and interaction between regulators, operators and all other gaming industry stakeholders in a safe, informal and friendly environment is indeed the way forward.
There were many highlights for me, not least the opportunity to host such a successful conference in my home town. A couple of brief but important moments stand out for me. It was a pleasure to present my predecessor Marc Ellinger with my president’s award for his excellent stewardship of the IMGL especially during the headwinds of Covid. We owe him a great debt of gratitude. I was also happy to hand over certificates to the very first winners of our European Student Writing Competition. I look forward to this competition building on a solid foundation that is now in place and going from strength to strength. It may be another few weeks before the end of my presidency, but our member meeting in Rome felt like the beginning of an orderly handover of responsibility. I was delighted to participate in the member’s vote which unanimously elected Marc Dunbar as the next IMGL president. He has been around the organization for many years and already served us in numerous different ways. I could have not thought of someone most suited and ready than Marc to take over the steer of the IMGL, and I will be pleased and indeed honored to continue to provide him with all the support and advice he may wish to get from me at any time. I am confident that we will be in capable and reliable hands. Finally, it remains only for me to thank you, our members, for your support over the past two years. It has been an honor to serve as president of the IMGL, a special organization whose foundation I was proud to be part some 20 years ago, and one which I hope to and one which I hope to continue to serve for many years to come in an effort to further expand its global reach and membership base. Quirino Mancini
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IMGL MAGAZINE | DECEMBER 2024
EDITORIAL
A truly global industry
SIMON PLANZER PHD, Editor in Chief IMGL MAGAZINE
No one would dispute the fact that we work in a global industry and there are times when we can embrace the full interconnectedness conveniently on one occasion. Anyone attending the IMGL-IAGR conference in Rome, with over 50 nationalities represented, felt truly ‘global’, which also runs as a main theme through this edition of the IMGL Magazine. You will be familiar with the butterfly effect, where an insect flapping its wings in the Amazon might affect the weather on the other side of the world. Malta’s Bill 55 could be the gambling law equivalent as panelists in Rome debated and our colleague from the U.S. explains in his article. The legal ramifications globally go well beyond the theoretical and may have an impact on various operations and enforcement. And with a preliminary ruling procedure pending at the Court
of Justice of the EU, we can expect a continuation of the Bill 55 saga also in the judiciary. IAGR President Ben Haden kindly granted his time to sit down and share his thoughts with our readership. He observed that regulators from all countries and cultures wrestle with similar challenges. Superficially, that could mean that regulation around the world has huge potential for harmonization. Scratch beneath the surface, though, and his assertion is nevertheless that there will always be unique approaches. Whether it is the legal system, the political priorities, the societal norms or the historical legacies, there are many reasons why a copy and paste of regulations from elsewhere is not a realistic approach. What events like the IMGL Rome conference and publications like the IMGL Magazine can do is to outline policies and approaches that have proven
Contents 6
Small island, big impact: Malta’s Bill 55 continues to worry regulators around the world
12 16 24 30 34 38 42 46 48 54
International perspective: 1-on-1 with IAGR’s Ben Haden
Finnish gambling reform – first regulatory steps towards liberalization
The online gambling black market – at what cost?
Is Sweden the next frontline for ex-player reimbursement claims?
Asia in review: 2024 a year of change
The route machine market in Puerto Rico: an emerging gaming vertical
Player fund protection in Denmark, UK & Netherlands
Rome conference review
Cutting through M&A complexity Reflections on Responsible Gaming
IMGL MAGAZINE | JANUARY 2023 IMGL MAGAZINE | DECEMBER 2024
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EDITORIAL
to work (and describe what did not work) and allow jurisdictions to adapt to suit their needs. Of course, not everything that spreads around the world is universally welcomed. We have witnessed in recent years the contagious nature of advertising bans which continue to proliferate in Europe and beyond. We are also seeing the spread of player claims where the success of cases in Austria and Germany is encouraging bettors elsewhere to try and recover losses. We have already seen the first player claims in the Netherlands and now it looks like Sweden could be the next country to see the floodgates open. Together with an Asian roundup, reports from Latin and North America and news of Finland’s legalization, we continue to adhere to and promote the global mix of contributions characteristic of the IMGL Magazine. Enjoy!
Yours sincerely, Simon planzer@planzer-law.com
To access our extensive archive of expert gaming law articles visit www.IMGL.org/publications
IMGL Magazine is owned, published and distributed by: The International Masters of Gaming Law PO Box 27106, Las Vegas, NV 89126 USA The IMGL is a domestic non-profit corporation registered in Nevada, U.S. with registration number NV20121147120 Editor in Chief: Simon Planzer PhD, planzer@planzer-law.com Publication & Marketing Committee: Co-chairs , Simon Planzer (Publications), Ali Bartlett (Social Networks & Digital) Members : Luiz Felipe Maia, Staff : Phil Savage, Brien Van Dyke Head of Publications: Phil Savage phil@IMGL.org Design and production: SportBusiness Communications. Copyright: All rights reserved to IMGL. No part of this publication may be reproduced or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior permission from the publisher. The articles expressed in this publication do not necessarily reflect the views of IMGL but those of the authors. The publisher and editor do not accept any liability for the contents of the authors’ contributions.
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Malta’s Parliament Building
Small island, big impact: Malta’s Bill 55 continues to worry regulators around the world THE FAR-REACHING CONSEQUENCES OF BILL 55 ARE EXPLORED BY DANIEL MCGINN AND RILEY CORNELL
A s Malta’s Bill 55 continues to impact the landscape of gambling regulations, concern is echoing across Europe, with Germany and Austria at the forefront of the discontent. This landmark legislation sparked significant debate over its potential implications for the broader regulatory framework governing online gambling. The frustration centers on fears that Malta’s approach could undermine the uniformity and effectiveness of cross-border enforcement within the European Union. With stringent consumer protection regulations and a commitment to maintaining high integrity in gambling operations, other EU nations worry that Malta’s reforms may be compromising consumer welfare and undermining the ability of member
countries to regulate gambling effectively within their own borders across the EU. Moreover, the bill potentially disrupts EU-wide collaborative efforts, as members strive for a harmonized regulatory framework to ensure fair play and robust consumer safeguards across member states. Malta’s legislative changes, critics argue, could introduce inconsistencies, complicating the enforcement of shared standards and potentially impacting the cohesion of the EU’s regulatory environment. As the global gambling industry watches closely, the debate over Bill 55 underscores the delicate balance between national regulatory autonomy and the need for cohesive international standards. The unfolding situation, with matters pending
IMGL MAGAZINE | DECEMBER 2024
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in multiple international forums, highlights the broader implications of Malta’s regulatory overhaul, raising critical questions about its impact on worldwide gaming regulations and cross-border legal compliance. While Malta’s actions continue to garner attention in Europe, and as EU member states continue to raise concerns about Bill 55 and similar legislation aimed at protecting domestic operators in the context of the European Economic Area, other jurisdictions must also address the question as to the best way to handle violations of their laws and regulations by Malta-based operators, and what, if any, action they can take to incentivize compliance and control unregulated gambling within their borders. Criminal Judgments Within the United States, unlawful forms of gambling are recognized as a crime at both the state and federal level. A significant majority of states still criminalize online casino gaming (other than sports wagering), and as such no legalized, regulated market for such games exists across most of the country. The result has been an influx of offshore, black- market offerings appearing online and proliferating across the country. Given that these entities are generally not licensed within the jurisdiction(s) that they are operating in, and that frequently these entities have little to no presence in these jurisdictions either, bringing criminal cases can prove difficult for regulators and their law enforcement colleagues. Foreign penal judgments are not generally given comity by U.S. states. 1 Judgments based on laws that are determined to be penal, such as criminal laws, laws that recover to the state, and laws that recover to strangers, are considered by U.S. courts to be exceptions to the Full Faith and Credit requirements
of the U.S. Constitution. 2 Similarly, U.S. Courts decline to enforce penal laws of other sovereign states, flowing from the presumption against extraterritoriality 3 and the concern that crimes can only be prosecuted in the country in which they were committed. 4 However, criminal judgments can still prove to be effective deterrents in some instances, if certain hurdles can be overcome. First, an enforcement agency must ensure that the state can exert jurisdiction of the allegedly offending entity. To acquire jurisdiction over a nonresident that is not personally served within the forum state, it will be necessary to demonstrate that the entity has certain “minimum contacts” with the forum state so that the suit does not offend the notions of fair play and substantial justice. 5 Courts have found that suing nonresidents for doing business on the internet where they have a real and continuous presence or where the nonresident has caused an injury comports to due process requirements. Specifically for determining the jurisdictional hook for nonresidents based on internet presence, courts look to the level of commercial activity associated with the website. Simply having an interactive website is not enough. To exercise jurisdiction courts have found that (1) a nonresident must purposefully direct activities or consummate a transaction with the forum or a forum resident; (2) the claim must arise out of or relate to forum-related activities; (3) the exercise of jurisdiction must not offend fair play and justice. 6 Additionally, in criminal contexts, courts have also considered whether the conduct has some past, present, or anticipated locus or impact within the U.S, but the ultimate determination as to whether the exercise of jurisdiction is appropriate turns on whether the application of the statute to the criminal defendant would be arbitrary or fundamentally unfair. 7
After obtaining jurisdiction and, presumably, a conviction,
1 See Huntington v. Attrill, 146 U.S. 657 (1892). 2 See McKusick, W. The Penal Judgment Exception to Full Faith and Credit: How to Bind the Bounty Laws. Washington Law Review, Vol. 99, No. 2, June 1, 2024, pp.662-676. 3 See The Antelope , 23 U.S. (10 Wheat) 66, 123 (1825) (Justice Marshall recognizing that “[t]he Courts of no country execute the penal laws of another”) 4 In re Neves , 2019 U.S. Dist. Lexis 234849 (S.D. Fla.), citing to Pasquantino v. U.S., 544 U.S. 349, 361 (2005). 5 International Shoe Co. v. Washington , 326 U.S. 310 (1945). 6 Mavrix Photo, Inc. v. Brand Technologies, Inc. , 647 F.3d 1218, 1226-31 (9th Cir. 2011). 7 United States v. Davis , 905 F.2d 245, 249, n.2 (9th Cir. 1990); United States v. Medjuck , 156 F.3d 916, 918 (9th Cir. 1998).
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states have multiple options for taking further action against the offending party. Recognizing the nature of the alleged crimes and the general lack of in-state assets, as part of the criminal enforcement process, state law enforcement agencies would likely have undertaken a forfeiture proceeding. Nearly every state has a mechanism to obtain property or assets used either to commit a crime or obtained through criminal means. 8 Additionally, some states also have gambling-specific forfeiture provisions. 9 Furthermore, at the federal level the U.S. Department of Justice, Office of International Affairs of the Criminal Division provides assistance to federal prosecutors seeking to forfeit property located in a foreign country pursuant to 28 U.S.C. §1355, and encourages prosecutors to give priority to pursuing forfeitable assets beyond the borders of the U.S. 10 Finally, the federal Racketeer Influenced and Corrupt Organizations (“RICO”) Act 11 can be used against foreign entities acting in the United States when the alleged conduct falls within the scope of the Act. 12 Given the nature of online gambling and the often untaxed or otherwise unregulated financial transactions associated with such conduct, many cases brought against black market gaming companies could likely include a colorable RICO claim. Moreover, once a criminal conviction is obtained in state or federal court, U.S. regulators can begin to take additional action. Ultimately, the conviction will allow for the swift imposition of related administrative action by the regulatory body in the jurisdiction where the underlying conviction occurred. Most jurisdictions have mandatory penalties or disqualifications associated with both felony convictions and convictions related to gambling. 13 Furthermore, actions taken by one regulatory body are often shared with all jurisdictions
that have reciprocity in licensing and enforcement matters, thereby triggering a domino effect where the offending entity and its officers, directors, or other managing persons will put any legitimate license in jeopardy and risk being locked out of the regulated industry across the country. Also, these convictions and administrative actions could potentially form the basis for discipline in European markets where the overseas operators may hold lucrative licenses. 14 One item to be aware of is that in the United States, although the language is somewhat ambiguous in most gaming statutes, precedent appears to require underlying convictions used to justify further administrative action take place within the United States. 15 This is consistent with the lack of comity for criminal judgments generally. Civil Judgments Unlike their criminal counterparts, civil judgments obtained within a U.S. jurisdiction are generally enforced by other jurisdictions across the U.S through the Full Faith and Credit clause. State law generally sets the procedure for filing, recording, and effectuating the foreign state’s judgment, and the are generally uniform and based on the Revised Uniform Enforcement of Foreign Judgments Act proposed by the National Conference of Commissioners on Uniform State Laws. 16 As such, domesticating a civil judgment from state-to- state in order to levy against assets is a procedural matter rather than a judicial exercise. Domesticating judgments by foreign nation states within American jurisdictions, however, presents additional hurdles 17 .
8 https://www.findlaw.com/criminal/criminal-rights/asset-forfeiture-laws-by-state.html, last accessed Aug. 25, 2024 9 §849.36, Fla. Stat.; Ala. Code §13A-12-30 10 https://www.justice.gov/jm/jm-9-111000-forfeitureseizure#9-111.700, last visited Aug. 25, 2024. See also Asset Forfeiture Policy Manual 2023, available at https://www.justice.gov/criminal/criminal-afmls/file/839521/dl 11 18 U.S.C. §§1961-68 12 See RJE Nabisco Inc., v. European Cmty. , 579 U.S. 325 (2016), holding that Congress intended the RICO prohibitions to apply extraterritorially in tandem with the underlying predicates, without regard to the locus of the enterprise when the conduct at issue engages or significantly effects commerce involving the U.S. 13 See Cal. Bus. & Pro. Code §19914; CO ST §44-40-107; KY Stat. §238.525; MN ST §349.16, as examples 14 See §109(3), Gambling Act of 2005 (Great Britain), which reaches to relevant offenses inside and outside of the country 15 See Small v. United States , 544 U.S. 385 (2005), holding that the term “convicted in any court” as used in federal statutory language does not include courts of foreign countries 16 Available at https://www.uniformlaws.org/home. See also §§55.501-.509, Fla. Stat, “Florida Enforcement of Foreign Judgments Act”. 17 Many countries have treaties with other nation-states that address judgment reciprocity. The U.S. is not a participant in any such treaty, al- though it does participate in certain Hague conventions related to service, evidence, and other procedural matters
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Depending on the type of court, similar but distinct principles will apply. 18 When a federal court is applying federal law, they will use federal standards. Federal recognition of out- of-country judgments begins with the principle of comity, the common law rule supporting deference to these foreign judgments. Comity is not mandatory but is appropriate when there has been an opportunity for a full and fair trial before a court with proper jurisdiction over the matter, after proper service on or appearance of the defendant. 19 Comity also requires an impartial administration of justice, a lack of fraud, and a lack of other reason why the judgment should not be given its full effect. Courts tend to narrow the test to specific factors to determine whether the foreign court was competent and civilized, whether the judgment was fraudulent, and whether the judgment violates American public policy notions or concepts of justice and decency. Reviewing courts will also ensure that the foreign court had personal jurisdiction through the minimum contacts lens. 20 Furthermore, courts will also ensure that the judgment is not based on a penal law in the international sense, such that recognition is inappropriate. Courts applying state law invoke state-specific statutory provisions for recognizing foreign judgments. Most of these statutes function similarly to the factor tests present at the federal level, but the statutes are frequently divided into mandatory and permissive denials of recognition, with mandatory denial stemming from a lack of finality, jurisdictional concerns, and due process concerns relating to the foreign system itself, while the permissive reasons for denying recognition focus on public policy, consistency, reciprocity, and particular concerns over the manner in which the specific case was tried. 21 As such, it is possible to obtain or enforce both civil and criminal judgments against foreign operators without
physical presence in the U.S., and such judgments may lead to additional sanctions from gaming regulatory bodies across the country. These tools can be effective against numerous black-market operators across the world. However, given the aggressive, protectionist nature of Bill 55, while courts can handle offshore gambling cases procedurally, can their holdings have any true effect if the activities originate in a jurisdiction offering protections to the operator?
Bill 55 – impact on enforcement .
The pertinent provision of Bill 55 creates Article 56A in Malta’s Gaming Act, and reads as follows: 56A. Notwithstanding any provision of the Code of Organization and Civil Procedure or of any other law, as a principle of public policy: (a) no action shall lie against a licence holder and, or current and, or former officers and, or key persons of a licence holder for matters relating to the provision of a gaming service, or against a player for the receipt of such gaming service, if such action: (i) conflicts with or undermines the legality of the provision of gaming services in or from Malta by virtue of a licence issued by the Authority, or the legality of any legal or natural obligation resulting from the provision of such gaming services; and (ii) (ii) relates to an authorised activity which is lawful in terms of the Act and other applicable regulatory instruments; and (b) The Court shall refuse recognition and, or enforcement in Malta of any foreign judgment and, or decision given upon an action of the type mentioned in sub-article (a). 22
The effect of these provisions appears to create a situation
18 Saita v. Cortuk (In re Cortuk) 633 B.R. 236 (Bankr. S.D. N.J 2021) 19 In r e Nexgenesis Holdings Ltda ., 2024 Bankr. Lexis 1766 (S.D. Fla. 2024) 20 Id. , see also Comm’ns Imp. Exp., S.A. v. Republic of the Congo & Caisse Congolaise d’Amortissement , 118 F. Supp 3d 220 (D.C. Dist. 2015), discussing comity and personal jurisdiction over a sovereign pursuant to 28 U.S.C. §1330(b 21 See §55.605, Fla. Stat.; N.J. Stat. Ann. §2A:49A-16.4© 22 https://parlament.mt/media/122833/act-xxi-gaming-amendment-act.pdf
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where, if a licensee were sued for providing services legal in Malta in a country other than Malta, a judgement issued by the courts in the jurisdiction declaring such activity illegal would not be enforced in Malta. Cross-border recognition of judgments, long-arm statutes, and civil forfeiture provisions presume that the interests of the states on both sides of the equation are aligned. However, when one state acts unilaterally to preserve its own interests, and those interests differ from the greater international community, the currently available remedies become inadequate. The USDOJ recognizes this issue within its guidance to prosecutors stating: “Moreover, when it is known or can be ascertained in advance that a particular foreign government either cannot or will not recognize, enforce, or otherwise make beneficial use of a forfeiture order obtained in this country, it would clearly be a waste of U.S. prosecutorial and judicial resources to pursue the forfeiture action.” 23 Thus, when reciprocity and comity are no longer offered, the federal government sees further action as a waste of resources. Malta appears to have sought a method to make its licensees judgment proof so long as they are performing activities legal under Maltese law, regardless of the state of the law in the impacted location. If enforcement agencies across the world view pursuing these matters to be a waste of resources, similar to the USDOJ’s position, Malta may have succeeded. Additionally, in the background of the interplay between civil and criminal judgments looms the international obligations of the greater nation. A matter from the early years of cross- border internet wagering demonstrates the difficulties in regulating online gaming. In 2003, the nation of Antigua and Barbuda (“Antigua”) took action against the U.S. before the World Trade Organization (“WTO”) 24 in response to measures
applied by central, regional and local authorities in the US which affect the cross-border supply of gambling and betting services, namely the federal Wire Act, Travel Act, and Illegal Gambling Business Act. 25 Antigua claimed that the measures at issue may be inconsistent with the US obligations under the General Agreement on Trade in Services (“GATS”). The ultimate holding, after appeals, found in favor of Antigua that in some cases, the U.S. regulatory measures were arbitrary and unjustifiable discrimination. 26 As a result, Antigua essentially won the right to US$21 million from the United States. 27 Thus, it appears that even in instances where international governing bodies recognize that measures are designed to protect public morals and maintain public order within a jurisdiction, such measures can still be violative of certain treaty obligations and carry risk of economic harm. Additionally, while some operators may be shielded by their domestic laws, third-party companies that do business with many customers across multiple jurisdictions may not have the same protections. For example, if a technology or other support company does business in the U.S., the company and its officers could potentially be charged with illegal gambling violations if it licenses its products to, or does business with, an entity involved in illegal gambling. Under 18 U.S.C. § 1955, it is a crime to conduct an illegal gambling business, defined as a business that violates state law, involves five or more persons, and has been in continuous operation for more than 30 days or has gross revenue of US$2,000 in a single day. 28 A person or entity can be conducting an illegal gambling business if they perform any necessary function in the gambling operation, other than that of a mere bettor. Id. Furthermore, such companies could also face potential charges as an aider and abettor, which requires proof that the defendant willingly associated with a venture and participated in it as something they wished to bring about. Therefore, an associating entity could face significant legal risks and potential liability as a
23 https://www.justice.gov/archives/jm/criminal-resource-manual-280-forfeiture-assets-located-foreign-countries. Last accessed Aug. 25, 2024. 24 The full title of the matter is DS285: United States — Measures Affecting the Cross-Border Supply of Gambling and Betting Services. The short title is US-Gambling. See https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds285_e.htm. 25 The provisions of Louisiana, Massachusetts, South Dakota, and Utah were also raised as issues 26 https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds285_e.htm, finding, inter alia, that the U.S. gambling regulations treat domestic and foreign entities differently. 27 The holding and later arbitration allowed Antigua to suspend obligations under the TRIPS Agreement at a level not exceeding US$21 million annually 28 United States v. Miller , 22 F.3d 1075; United States v. Lovett, 662 Fed. Appx. 838
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principal offender or an aider and abettor under federal law.
Additionally, at the international level, there are options for the U.S. to either seek amendments to treaty economic treaty provisions to clearly cover illegal gambling, which understandably would be a heavy lift in the global community, or to potentially sue in the International Court of Justice. However, the simplest approach, absent deregulation, may be a combination of a shift in enforcement mechanisms combined with the status quo. American jurisdictions could preclude internet wagering through IP banning but would likely be in violation of the same GATS provisions that underlie the Antigua matter. But, the U.S. response to the sanctions in that matter was to effectively ignore 30 the payment obligation even though the overall annual amount is relatively small compared to other U.S. obligations. Effectively, the U.S. leveraged its economic and political power against a smaller country that it believes is supporting criminal enterprises. So long as the protectionist nation is of a similar size (which many off-shore gambling havens are) and without other conflicting treaty agreements, the U.S. may be able to effectively bully its way through Bill 55-style legislation if it puts forth a unified regulatory position. Thus, it remains to be seen how non-EU countries that have not yet embraced online gambling will address the repercussions of Bill 55. Black-market gambling continues to pose significant challenges for regulators and law enforcement personnel. With growing public and industry support for effective measures against these illegal entities, and the ever-evolving tactics of black-market operators, regulators and policymakers cannot afford to appear ineffective. The specific actions they will take, or the consequences of failing to act, remain uncertain.
Potential action going forward All things considered, overseas regulators face a difficult challenge if the provisions of Bill 55 remain in effect in Malta or proliferate among other nations. To overcome the wall raised to protect certain offshore operators, regulators must be willing to undertake and follow through on aggressive enforcement action, and will need the support of policymakers to do so. One main avenue for leveling the playing field is for regulators to seek amendments to their enabling and enforcement statutes to provide effective remedies against protected operators. Germany’s federal gaming regulator, the GGL, began to implement IP blocking as a response to illegal online gaming in 2023. While this approach has yet to be approved affirmatively by German courts, 29 with affirmative approval via legislative action in the U.S., court approval would be unnecessary. Presumably, such action would require regulators and their law enforcement partners to seek some sort of injunctive relief against the operators. Given the situation regulators are faced with and the prospective lack of other available equitable relief, obtaining an injunction against operators appears feasible. Notably, such policy determinations would likely have to be made by state and federal legislators acting in cooperation, as states are unlikely to wade into international commerce issues where the federal government generally reserves the right to speak for the nation, and ideally a uniform system would be developed for states that seek to opt into such protections, rather than state legislators slowly weaving a patchwork of 50-plus individual regulator regimes.
DANIEL MCGINN Special Counsel,
Jones Walker, Tallahassee For information contact: dmcginn@joneswalker.com 001 850.214.5105
RILEY CORNELL Law Clerk, Jones Walker
29 https://igamingbusiness.com/legal-compliance/regulation/german-gambling-market-issues/, last accessed Aug. 25, 2024 30 See https://www.reuters.com/article/world/antigua-losing-all-hope-of-us-payout-in-gambling-dispute-idUSKBN- 1JI0VW/ and https://www.caribbeanlife.com/antigua-us-square-off-again-over-wto-ordered-compensation/
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ONE-ON-ONE
The regulator’s perspective: Ben Haden TAKING A BREAK FROM THE BUSY ROME CONFERENCE IN OCTOBER, BEN HADEN , PRESIDENT OF IAGR, FOUND A QUIET MOMENT TO SIT DOWN WITH EDITOR-IN CHIEF SIMON PLANZER , REFLECTING ON KEY ASPECTS FOR REGULATORS GLOBALLY AND ON HIS ORGANISATION’S PARTNERSHIP WITH IMGL.
Simon Planzer: We’ve all been in Rome now for three or four days. Has the conference met your expectations? Ben Haden: Without a doubt. We were hoping for a strong turnout, but we’ve had an amazing response with over 480 people. That is the first time I’ve seen a sellout at a conference like this. So, from that point of view, it’s been remarkable. But even more important is the diversity of people we have. You’ve got a brilliant range of jurisdictions, countries, skills, and experience. You can genuinely see people engaging with the topics on the program. People have really got into it, and that’s what we were after. SP: The audience this time seems to be very international, with many more attendees from outside North America and Europe. Would you agree? BH: Yes. You can see, for example, the increasing importance of regulation in Africa by the number of colleagues that have
come from there. We’re lucky with IAGR that we usually draw a global crowd. But if you look at the number of continents represented, we’ve got someone from practically everywhere. There are a couple of reasons for that: this has become an important time for regulators to meet. It’s a regular slot in the calendar where IAGR members know they come and be with their tribe, as I describe it. But this year, with the collaboration with IMGL, we’ve had a more expansive program. There is definitely something here for everyone, and I think you can see that in the number of side meetings happening in the breakout areas, the meeting rooms or just in the corridors. You see conversations happening all the time with a good range of people who are really keen to engage and talk about the challenges we’re all experiencing. SP: That’s an excellent segue into my next question. From your conversations with regulators around the world, what are the common challenges they are facing?
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BH: There are certainly similar challenges, but there’s often nuance and different perspectives, too. On our first panel on Monday, there were representatives from Canada, Denmark, Nigeria and Singapore. Very different cultures and environments, and yet you could see them coalescing around the talking points. They all need to keep their jurisdiction and regulatory regime fit for purpose. They recognize that the industry is changing, and it’s not easy sometimes to move as quickly as they would like. There’s definitely something around the attraction and retention of talent. We, as a sector, are not alone in that. However, the range of skills needed within the regulatory space is much greater than it was even five years ago. We have to think much harder about how we attract and keep the best people when we compete with the private sector on salaries we can pay. Then, there’s an interesting shared focus on making the most of the opportunities around data. Being efficient and effective with data is something everyone I talk to sees as a challenge. And then, finally, illegal gambling is a sectoral issue that we all have in common. Whether you’re a regulator, an operator or an advisor, people are thinking about illegal gambling, its impact and the role they should play in limiting it. SP: Picking up the point about data, there has been a lot of talk during the conference about data driving regulatory decisions. What do you see as the possibilities and the limitations of that approach. BH: Personally, I think the biggest limitation around data is aligning around what we mean by data and AI. AI spans everything from predictive text on your phone to the most complex, deep learning model and everything in between. It’s an easy word to throw around, but you want to be clear what you mean by being data-driven.
From my perspective, there are two things. The first one is around process. How do you make your process more efficient? How do you use data to re-engineer and improve processes? And if you look at the evolution of risk models, for example, the risk of operator non-compliance, how do you make sure you target your resource in the right place at the right time for the right reason? I think this is one of those areas where data is going to increase our potential to be more efficient and effective. The second point is around data analysis and the ability to deliver deeper analysis than you can do with traditional techniques. By using wider data sets, we can better understand the market and what players are doing. In turn, this should enable us to see how things are changing and the impact that has so we can make decisions on whether to react with regulatory changes. Put simply, it means we can target more effectively than we have in the past. SP: AI has been high on the agenda of the conference. Do you see an additional challenge for regulators to enlarge their employee base and bring this kind of expertise in house? BH: There’s as interesting balance between what you can retain in-house and what you keep on retainer, as it were. From the perspective of my day job at the Gambling Commission in Great Britain, I’m keen to develop in-house capability, but I wouldn’t think for a minute that we will always have all the skills we need. We need outside experience to come in and supplement that. But it’s an ongoing challenge. Teo Chun Ching from Singapore made the point in his panel session that they don’t need everything in-house. They can easily buy in highly specialized expert services. That’s definitely a model, isn’t it? What’s interesting is the tipping point in terms of developing something in-house versus bringing in new thinking, a fresh perspective, someone who’s
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done something interesting in, say, a different sector on a particular data science technique. Sometimes, you want to bring that in-house to create a team environment and give them a context within which they move forward, which can be easier within the organization. But you also need certainty. If I want an answer to a particular question, I don’t want to wait six months to recruit the skills to deliver it. SP: IAGR is handing out its awards this evening celebrating excellence in regulation. Have you seen examples of best practice either around data or in other areas in different parts of the world? BH: I try not to talk about best practice. When talking to our members, I’m not there to tell them how things should be done. I’m there to encourage a conversation and a dialogue and get them to share what they’re up to, how they’re doing it and why they’re doing it. That way, people can look at the various approaches and decide whether that’s something that would work for them too. To take the data example, do I want to have every single transaction with every operator in my jurisdiction? Or do I need a different level of detail to enable me to measure the outcomes that I’m interested in? It’s less about best practice and more about sharing lots of different examples of people doing things that are working. I think there’s often a lazy narrative around regulators being slow and turgid compared to an industry which is light and agile and chasing innovation. From what I see, things are much closer than that. When you listen to the debates that regulators are having here, they clearly have an interest in responding quickly to market challenges. There is no desire to move slowly. Sometimes, that happens because of legislation. But you hear a lot of voices asking how can we create a framework for a new product and move that through quickly. How do we respond with data faster than we’ve been able to before? How do we evaluate the impact of what we’ve done faster so that we can change direction if we need to as we go forward? That’s one of the things I’ve learned, particularly over the last year, as I’ve talked to more and more people. I’ve had the chance to learn how they think and what they want to do, and you see some of
it starting to come through at conferences like this and in the collaborative work we’re doing. SP: Interesting that you mention collaboration, is it now an obligation for regulators to cooperate internationally or is it still possible for them to view their market in isolation? BH: As we have already said, while we share many similarities, every jurisdiction is slightly different, and there could be good reasons why a jurisdiction decides to be more insular. That said, when you can share your own experience, have it questioned and debated, and then listen to the experience of others, you naturally become better informed and build the evidence base to push forward in your own market. SP: The issue of international collaboration and cross border information sharing has been discussed here at numerous sessions particularly when it comes to enforcement. How do you see this developing with jurisdictions sharing information and acting together to drive out illegal gambling? BH: People would probably be surprised at how much information is already shared between regulators. It’s not something that surfaces very often in public discourse, but I know, for example, that different jurisdictions have been signing MOUs with each other this week. And these MOUs are starting to look very different from those that were signed, say, five years ago. One area concerns the potential to share information where a bad actor is in one regulator’s jurisdiction. They can ask a question of another and then start collectively to bring more influence to bear on that actor. But I think regulators are far better informed now, from the point of view of enforcement than they were two years ago. It’s the kind of activity that goes unseen. There has yet to be a landmark case where this type of information sharing has materially come to light such that people would think more about it. However, considerable dialogue has been going on between regulators. SP: MOUs are the formal and legal ways that we record ways of communicating and exchanging information, but what is realistically possible outside MOUs?
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BH: You need to be careful about what information is shared, because clearly it has commercial impacts on the companies you have licensed. So there needs to be a framework in place to make that happen in the right and proper way, particularly if you’re in an investigatory process. Like any other regulatory process, it will refine and becomesmarter over time. If we were having this conversation in three or four years, maybe the sharing of data would be as significant as the verbal conversations between regulators are today. SP: You’re about to go into your second year as IAGR president. Do you have a vision for the role IAGR can play in terms of setting the agenda for industry regulation? BH: First and foremost, IAGR is a conduit for engagement. We’ve got over 60 different countries here this week. We provide a platform for them to engage, either to listen or to discuss and meet, and there’s clearly an appetite for that. Our role is to respond to what our members are interested in. So it’s not me or the IAGR Board saying, ‘This is what you should be interested in’. We should reflect what our members tell us in terms of putting together our programs of work. When we put a call out for papers to be presented at an event like our annual conference, we clearly see what people are interested in. That’s why there is a big focus on data and AI this year, and that’s why there is a big focus on illegal gambling. And to the extent that people are engaging as we’ve seen this week, it feels like we’re fulfilling our role. SP: Looking forward, what opportunities do you see for IAGR to continue to evolve and become more representative of the industry worldwide? BH: In terms of our membership, that continues to grow. Like many organizations, we had a dip during COVID, but since then, we’ve recovered and are growing again. Clearly, there are lots of opportunities, because new jurisdictions are coming online in terms of regulated gaming all the time. It’s surprising how many people contact us before or as part of their development, because they want those connections. They want to know who to talk to about a particular aspect.
For me, the best thing about the new jurisdictions opening up is that they are able to borrow ideas from around the world. If you look at Ontario, for example, it’s gone out far and wide and thought really hard about what sort of framework it wants. Then, it’s taken some of those aspects and molded it to its own specific outcomes.. Every time someone new comes online, it takes that learning on a step. It’s been really interesting to watch the debate and discussion that’s been going on in Brazil and how the market is evolving there. No doubt we’ll learn a lot from that over the next 12 months. I’m also really looking forward to some of the outcomes of our working groups, particularly around illegal gambling. We had 30 different jurisdictions sign up for that group in the space of a week so there’s clearly interest. It’s one of those areas where collectively, as a group, we must be able to make more progress than we can manage on our own. So I’m really looking forward to the outputs of that work. SP: How do you reflect on the partnership with IMGL? What do the two organizations bring to each other? BH: As an organization, we’ve started to engage more outside of our own conference framework, and it’s part of the reason that we’re collaborating with IMGL on this event. IMGL’s involvement brings exposure to the supply chain of the gambling industry which is shifting all the time. I think we’ve benefited from the perspective of IMGL colleagues. We’re keen to be more in that space so I’m sure we’ll continue to collaborate with different parts of the industry ecosystem. When we do we learn more and hopefully others learn more at the same time. Every conference you do comes withrisk. You’re never quite sure how it will end up. You hope that your experience will ensure that you deliver something that’s meaningful. If we had done the program for this week on our own, it would have looked very different from the program we’ve delivered. That’s the benefit of engagement and discussion with IMGL colleagues; we have a stronger program that reflects the breadth of the ecosystem that we’re in. It’s made it much more rounded.
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MF AI LN TL A’N SD FM ATR FKE GT RER YE -P LO IR ST TING
REFORM REFLECTS THE BROADER EUROPEAN TREND OF LIBERALIZING GAMBLING MARKETS WHILE BALANCING CONSUMER PROTECTION AND PUBLIC HEALTH CONCERNS AS PIA EK AND MARIA KARPATHAKIS REPORT Finnish gambling reform – first regulatory steps towards liberalization
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FINLAND MARKET REPORT
Introduction The landscape of online gambling in Finland is poised for significant transformation as discussions surrounding the long-standing state monopoly intensify. Currently Finland has one of the last remaining gambling monopolies in Europe and only the state-owned gambling operator can operate lawfully. Private operators offering gambling services online or in person are excluded from the Finnish market, meaning that licenses to provide B2C or B2B gambling services in Finland are currently not granted at all. Although the Finnish gambling monopoly has been strongly defended over the years, developments in the igaming sector enhanced by digitalisation have shifted the political approach, opening up debates on alternative options for managing gambling in the country. It is hoped these alternatives will generate more income than the state monopoly, reduce unregulated gambling, and potentially reduce negative effects on public health. The Finnish gambling reform officially began in October 2023, when a working group in the Ministry of the Interior started drafting a government proposal to reform the existing state- owned monopoly system operated by Veikkaus Oy (“Veikkaus”). This marked an exceptional shift, as the Finnish government that had previously supported and implemented measures which strengthened the state operator’s position was now exploring alternative options to the state monopoly. At the time of writing, the latest development in the reform is the second draft of the gambling act (“Draft Act”) published on 1 November 2024 and submitted to the European Commission and other member states for comments. 1 The proposed law aims to establish a licensing system for gambling activities
and their oversight in Finland. The new system allows private gambling companies to apply for a license to operate in the country. While the proposal is still a draft, it is not expected to undergo additional changes unless such are proposed by the Commission or other member states. According to the Draft Act, private operators could enter the Finnish market as early as July 2026 but by January 2027 at the latest. This article explores the recent reforms aimed at liberalising the online gambling market, examining the shift from a defended monopoly to a more regulated and competitive framework. Key developments include the establishment of a new Licensing and Supervisory Authority, proposed licensing structures for both business-to-consumer (B2C) and business-to-business (B2B) operations, and stringent marketing restrictions. As Finland navigates these changes, the focus remains on protecting consumers while fostering a responsible gambling environment in the digital age. Liberalizing online gambling in Finland : f rom defended monopoly to market liberalisation The gambling industry remains unharmonised within the EU, allowing member states to regulate their gambling markets independently — either by liberalising them or restricting access fully or partially, provided they can show sufficient justification with general interest objectives under EU law. 2 Even if the existence of a gambling monopoly is supported by EU law, for example, to prevent the negative effects of gambling, such justification requires the implementation of measures — typically strict and effective supervision of gambling activities — to ensure compliance with the stated objectives. 3
1 Commission, ‘Draft government proposal to Parliament for legislation on a new gambling system’ TRIS/[2024] 2943 <https://technical-regula- tion-information-system.ec.europa.eu/en/notification/26394> accessed 1.11.2024. <https://www.lausuntopalvelu.fi/FI/Proposal/DownloadPro- posalAttachment?proposalId=b91e1f27-d850-416c-b6a6-e47fa5804ea1&attachmentId=22987> accessed 3 July 2024. 2 Article 49 and 56 of the TFEU establish the freedoms of establishment and to offer services. Monopolies are seen as a restrictions of those free- doms; however, Article 52 of the TFEU allows for monopolies to be justified on the grounds of public order, security, and public health. Addition- ally, market restrictions may be justified by overriding reasons of public interest, as recognized by the EU Court of Justice on a case-by-case basis. These reasons include, for instance, the protection of players 3 Stoss and Others (Joined Cases C‑316/07, C‑358/07 to C‑360/07, C‑409/07 and C‑410/07) [2010] < https://eur-lex.europa.eu/legal-content/ EN/ALL/?uri=CELEX:62007CA0316>
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