New law about online gambling in Belgium

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This one maybe?

Controversial New Gambling Legislation In Belgium

1 September 2010
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On 10 January 2010 the Belgian government adopted a new Gambling Act. Even though the new Gambling Act is expected to enter into force on 1 January 2011, it has caused a lot of controversy and is now the subject of a complaint to the European Commission.

The scope of the former Gambling Act (the Act of 7 May 1999 on Games of Chance, Gambling Establishments and the Protection of Players) is being extended to include games of chance offered through the use of information society tools (including the Internet), media games and betting. In some ways following the lead of other Member States, the new Gambling Act provides for a system of licences for both offline and online betting. The lotteries are not affected by the new Gambling Act, and remain the monopoly of the state-owned incumbent, La Loterie Nationale.

Under the new Gambling Act, the operation of games of chance and betting is (still) principally prohibited, but licensing systems provide for exceptions. The new Gambling Act imposes a mandatory licensing system for all kinds of games of chance (whether provided offline or online), to be controlled by the Belgian Games of Chance Commission.

In order to be able to offer online games of chance, the new Gambling Act requires operators from other Member States (i) to hold a licence for land-based gambling operations in Belgium and (ii) to (re)locate their servers in a permanent establishment within the Belgian territory. This means that foreign operators, duly licensed and operating from other Member States, will be required to become licensed operators of land-based gambling establishments in Belgium before they can offer their services online. In addition, games of chance offered online must be of the same type as those offered offline. Finally, the new Gambling Act provides for a possible limitation by Royal Decree of the maximum number of land-based licences.

The new Gambling Act provides criminal penalties and/or administrative sanctions for any person involved in illegal games of chance. This applies not only to the operator or the person who facilitates the operation, whether through advertising or by recruiting players, but also to the actual participants in illegal games of chance.

In a move that is perceived by many as an attempt to attract online gambling business to its region, the Walloon Government recently announced a flat 11% tax rate for online gambling. The two other Belgian Regional Governments are yet to adopt a position.

In March 2009 the Belgian government notified the draft Gambling Act to the European Commission pursuant to Directive 98/34/EC on Technical Standards and Regulations. In June 2009 the European Commission rendered a detailed opinion on the draft Gambling Act whereby it expressed concerns mainly on two issues: (i) the fact that the Act does not take into consideration the conditions previously fulfilled by EU-based online gambling websites when applying for an online gambling licence in their home Member State; and (ii) the requirement for online gambling websites to have a fixed establishment in Belgium. These issues raise concerns more particularly in the context of the free movement of services (Article 56 TFEU) and the freedom of establishment (Article 49 TFEU).

Notwithstanding the European Commission’s objections, the Gambling Act has been passed without any substantial amendments as compared to the first draft. According to the Belgian government, the restrictions on both the free movement of services and the freedom of establishment contained in the Gambling Act can be justified by mandatory requirements of consumer protection and the fight against fraud. On 23 June 2010 the Remote Gambling Association and the European Gaming and Betting Association lodged a joint complaint to the European Commission, claiming that the new Gambling Act is not compliant with EU law. This complaint calls on the Commission to open a formal infringement procedure against the Belgian government over the new Gambling Act.

Koen Platteau (Partner), Olswang Brussels Koen.Platteau@olswang.com