No evidence against B2s Politics RGA lodges
complaint against Greek taxation
The Greek government may be trying to sell off its share in OPAP, but its recent online gambling law appears to still favour the incumbent.
GREECE T
he Remote Gambling Association (RGA) has lodged a State aid com- plaint with the European Commission challeng-
ing the compatibility of the Greek government’s new gambling law with EU State aid requirements. The complaint focuses on the favourable tax treatment afforded to the part state-owned gambling operator OPAP’s land-based serv- ices in relation to private online gambling operators.
The complaint follows the recent adoption by the Greek Parliament of the new gambling law which reg- ulates remote gambling, something which the RGA has welcomed. However, it believes that the legisla- tion has been geared towards exist- ing monopoly operator OPAP. The complaint points out that
OPAP would unjustifiably and favourably be exempt from the 30 per cent gross profits tax on its offline land-based gambling prod- ucts, a tax which online gambling operators are required to pay under the new law. Furthermore, the law also imposes a 10 per cent with- holding tax on all customers’ win- nings with online operators, whereas the customers of OPAP’s land-based services are exempt from any tax on winnings of 100 euro or less, which the RGA says confers a further competitive eco-
nomic advantage on OPAP’s land- based gambling operations. Upon launching the complaint, RGA chief executive Clive Hawkswood said: “Despite the RGA having had a constructive relation- ship with the Greek authorities during the development of the new legislation, significant concerns remain about the viability and legal- ity of the market under the terms of the new law.
“Remote operators wish to obtain licences in Greece and to continue to offer Greek consumers competitive and well-regulated products. However, the current unjustified fiscal favouritism being afforded to OPAP makes this extremely difficult and we urge the European Commission to investi- gate the new legislation for being in breach of State aid rules.” The Greek government owns 34 per cent of OPAP (valued at around 1.17bn euro), which currently has the exclusive right to offer sports betting and lottery products to Greek consumers. OPAP’s land- based service does not pay any form of gambling tax on stakes or gross profits.
Hawkswood added: “There are concerns that the new law provides tax benefits for OPAP’s land-based operation with the aim of increasing its value prior to a proposed sale of the government’s share.
ANALYSIS
Despite the complaint, the RGA has said it is not against different taxation rates between offline and online operators but that any differences should be ‘objectively justified’. Oddly, it is normally online gambling which is taxed at a lower rate given the nomadic possibilities of running an online operation. As no justification has been made for the Greek tax variation, and given the favourable treatment afforded to the state-owned monopoly operator, in clear contradiction of the tax systems employed in other jurisdictions, a State aid complaint has been launched by the RGA.
“We are fully aware of the fiscal pressures on the Greek authorities at present, but they do not justify the imposition of anti-competitive tax provisions which benefit the exist- ing monopoly gambling provider over private online operators soon to be licensed in Greece. Not only does such action not conform with EU State aid rules, but if imple-
mented, it will have a damaging impact on the private sector and associated growth and employment opportunities, as well as curbing competition and consumer choice. As such, we feel compelled to take this action and challenge the Greek authority’s favourable tax treatment of the part state-owned gambling operator OPAP.”
RGF calls for independence or a levy SOCIAL RESPONSIBILITY T
he Responsible Gam- bling Fund (RGF) has told parliament that it believes decisions into where social responsibility funds raised by the gam- bling industry are spent should be made independ- ently of the industry. The RGF was essentially sidelined earlier this year after constant clashes with the industry fundraising body The GREaT Founda- tion, which now funds problem gambling projects directly. This move was wel- comed by the industry who viewed the ‘tripartite agree- ment’, which involved GREaT raising funds, The Responsible Gambling Strategy Board (RGSB)
deciding where to spend them and the RGF actually spending them, as need- lessly costly and bureau- cratic.
However, the RGF has told the Culture Select Com- mittee that a new mecha- nism should be devised for the distribution of money
18 BettingBusinessInteractive • NOVEMBER 2011
for research, education and treatment (RET) and if it is not then a problem gam- bling levy should be imposed.
It wrote: “Underlying the difficulties is GREaT’s view, as we understand it, that since the RET arrange- ments are voluntary and the
industry supplies the funds, the industry should be fully involved in the decision- making process. This point of view is understandable, but is incompatible with one of the principles of the tri- partite system, that deci- sions about the distribution of funds should be made independently of industry. “The tripartite arrange- ments envisaged by the 2008 RET Review have foundered because of insuf- ficient will and determina- tion on the part of those who signed up to them to see that they should succeed. The challenge now remains to devise a new scheme for the distribution of RET funds such that choices of prior-
ity between research, edu- cation and treatment – and within each of these cate- gories – are not dominated by the views of the industry or any of the service providers. If this cannot be achieved within a voluntary system the government should use its powers under the 2005 Act to introduce a statutory levy.”
• Last month Betting Busi- ness interactive referred to The Responsible Gambling Fund and the Responsible Gambling Strategy Board as The Remote Gambling Fund and the Remote Gam- bling Strategy Board. We apologise for any confusion that this may have caused.
Former MP John Greenway has told the Culture Select Committee that greater restictions on B2 gaming machines can be justified. He said: “None of the research that has been done, and certainly the most recent review, has come up with a concept that they are particularly more addictive than other forms of gambling. People thought there might be a problem; I personally can’t see there is huge evidence of that.”
POLITICSBRIEFS
RESULT FOR COMMISSION INVESTIGATION
THE RGA BELIEVES THAT OPAP IS
FAVOURED BY THE NEW LAW
Keith Milhench has been jailed for 28 months for fraud and theft offences after the Gambling Commis- sion carried out an investi- gation into financial irregularities at The Weather Lottery plc between April 2008 and April 2010. The Commission referred the matter to Nottinghamshire Police, who found evidence of fraud and theft totalling around £70,000. The former MD was sentenced at Not- tingham Crown Court last month after admitting charges relating to the mis- appropriation of jackpot payments to winners of The Weather Lottery. A second defendant, Amie Pickersgill- Smith, was given a 20-week prison sentence suspended for 18 months. She was also ordered to carry out 120 hours of community service.
COMMERCIAL FREEDOM FOR JOCKEYS
The British Horseracing Authority (BHA) has dropped its dated Integrity Codes of Conduct, a move that will allow jockeys, like trainers, to enter into com- mercial arrangements with betting organisations (for example, appearing in an advertisement or writing an article for publication). Jockeys and trainers are required to notify the Authority of details of the main terms of such arrange- ments, which will be made available to the public on
www.britishhorseracing.co m. The existing provisions of the ‘Jockey Sponsorship Code of Conduct’ regarding branding sites on jockeys’ clothing, and the Racehorse Owners’ Sponsorship Code of Conduct regarding other sponsorship opportunities on the racecourse, shall continue to apply.
EGBA WANTS EU REGULATION
Maarten Haijer, director of regulatory affairs at the European Gaming and Betting Association (EGBA), has welcomed the opinion of Advocate General Cruz Villalón in the joined Costa and Cifone cases regarding StanleyBet in Italy, which confirms that Member States’ gambling legislation needs to comply with the basic requirements of the Treaty. He added: “With several preliminary ques- tions pending in Italy alone, it is clear that we can’t con- tinue to expect the CJEU to shape the European market. The European legislator needs to step in and intro- duce regulation that addresses and harmonises licensing standards within the EU.”
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