BelGium
comment
Julian Harris, Partner, Harris Hagan harris@harrishagan. com
New gambling legislation came into force in Belgium on 1 January 2011, which requires all online gambling operators to be granted a Belgian licence before accepting wagers from Belgian residents. Operators may apply for online licences, however they must first obtain a land-based licence. It has been argued that this requirement is incompatible with EU law, as it puts existing Belgian licensees at a huge advantage. However, the law has now received approval at EU level. One option would be for a potential online operator to join forces with an existing Belgian land-based licensee, however the necessity for such an arrangement makes the Belgian market less attractive. This highly restrictive provision will surely restrict the development of the Belgian online gambling market. No online licences have yet been issued, but it is expected that online licence applications will officially open later this year.
maximum allowed by the Belgium Gaming Act.
PokerStars is already a popular brand amongst Belgian poker players as it continues to offer its services through its dot com portal, perhaps illegally under Belgian law. According to H2 Gambling Capital, poker accounts for 17 per cent of player activity – the most popular activity are casino games, accounting for 48 per cent.
The Belgian Gaming Commission has recently sent out warning letters to PartyGaming and Full Tilt Poker (and their respective regulators in Gibraltar and Alderney) asking them in strong words to quit their online activities in Belgium. An indication that once the regulated market is up and running legislators will continue to go after unlicensed operators that target and advertise to Belgian citizens - Unibet was recently fined €75,000 for illegal advertising.
Financial institutions that facilitate monetary transactions may also be targeted. Other operators keenly waiting to apply for a licence are bwin, Stanleybet (through its Belgian subsidiary, Tierce Ladbroke), Casino Austria, Unibet and the French horse-racing monopoly PMU.
Belgian local authorities have taken a pragmatic, albeit controversial, approach to gaming taxation. The southernmost Walloon
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BelGian local
authoRities have taken a
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region has indicated that it will charge online gaming operators a reasonably low tax rate of 11 per cent on Gross Gaming Revenue (GGR – calculated as stakes less prizes but including bonuses) a bid to profit from the influx of gaming operators and generate employment in the region.
The Brussels region has set its rate equal to that of the UK at 15 per cent on GGR, except that the rate applies for all forms of gambling, both online and offline. The setting of the tax so low in Wallonia, has angered land-based operators who feel that the discrepancy puts them on an unequal footing to online operators. Arguing that they are effectively providing the same service, so why should they have to pay twice as much gaming duty? These groups have mounted legal action, at national and EU level, attempting to amend
the legislation as soon as possible. The rate is set to be revised late next year.
The main talking points of the new Belgium Gambling Act are the following:
• A new regulatory regime designed for the protection of the player, financial transparency and for control of money flows, game control and the identification and monitoring of the organisers.
• Tighter regulations than real world gambling, including the prohibition on the use of credit cards by players and lower loss limits imposed on consumers.
• ‘Offline’ presence as a requirement. Only entities possessing an existing A, B or F1 licence in the real world may offer this type of activity online and those activities should be of the same type as those offered in the real world. In other words, a casino operator who has a class ‘A’ licence may only apply for the corresponding A+ online licence. The online licences are categorised respectively as class ‘A+,’ class ‘B+’, and class ‘F+’. Online licences will have the same validity as their corresponding land- based licence.
• The cost of obtaining a class ‘A+’ licence (casino) will be €250,000. Class ‘B+’ (poker) will cost €75,000 and class ‘F+’
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