2. Advertising for remote gaming There is no such thing as bad publicity… There is only « illegal » publicity Thibault Verbiest Attorney at the Bars of Paris and Brussels Thibault.verbiest@ulys.net European Gambling Briefing 25 -26 April 2005 Law of : New Technologies Intellectual Property Media and Entertainment Commercial Law

3. EU Regulatory Framework for 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

4. 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

5. 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

6. 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.

7. 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 COMMISSIONCOMMISSION no : EC Law not applicable art.49: freedom to provide services 1)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 ECJUSECJUS EUROPEANMARKET?EUROPEANMARKET?

8. 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.

9. 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

10.  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?

11. 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

12. 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

13. 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)

14. 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

16. Sponsorship

17. Press coverage  No commercial communication  Freedom of press (ECHR)  “Schöne Wetten” case (Ger. Die Welt)

19. Freedom of Speech - Blog

20. 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?

21. MEMBER STATE Regulation (annexes)

22. 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?

23. 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

24. Belgium:  Casino Games, 1999 Casino Act Promotion 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).

25. 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

26. France – Publicity :  Lotteries: article 4: Publicity for unauthorized lotteries is forbidden, irrespective of 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!

27. 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

28. 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

29. 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

30. 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

31. 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

32. United Kingdom – Current framework  § 42 of the Gaming Act 1968 and Guidelines Gaming 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

33. 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)

34. Denmark  National Internet Gaming Strategy, 18 June 2001 Maintain 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

35. Sweden  1999 Casinos Act  1994 Lotteries Act, as modified:  August 2002: online gaming regulated Lotteries 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

36. 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.

37. 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