Online Gambling in Finland and Greece

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During the last week there have been some developments in the online gambling scenario in Finland and Greece. The news from both countries is negative.

There is a new coalition government in Finland and it has indicated that even greater restrictions are likely to be imposed on foreign online gambling operators. This stifling of competition will benefit the state owned monopolistic operators. The government has not clarified exactly what measures are being contemplated. However, executives of the Finnish gambling monopoly RAY executives have indicated that controversial measures such as Internet blocking, the restriction of advertising and the disruption of financial transactions with illegal foreign companies by Finnish financial institutions are some of the possibilities. These are not going to be easy to implement because they will entail significant resources in terms of enforcement staff, facilities and time. And because the definition of illegal remains vague and untested, there is a likelihood of legal actions by overseas online gaming operators. The Finnish government is considering this action despite advice from gaming experts, who have pointed out that restricting competition is not desirable. It puts the brakes on business growth and it prevents the local players from getting the best odds possible. This is all the more true of the borderless online gambling because there are no logistics costs involved in sourcing overseas markets.

The European Commission (EC) has responded to the Greek proposals to regulate online gambling on July 7 and as expected voiced its strong concerns about the compatibility of the draft legislation with European Union (EU) law. The questionable provisions were those that the European Gambling and Betting Association (EGBA) had indicated earlier. These include the requirement for EU licensed online gaming operators to be established in Greece and to have a bank guarantee from a Greek bank, limiting the number of licenses being issues, imposing a minimum paid-up capital requirement on applicants and limiting financial transfers to local banks or local branches. In addition the draft legislation is riddled with practical, technical and legal uncertainties. For example, the types of games that may be offered by the ultimately licensed online gambling operators have not been clearly specified. The online gambling jurisdiction of Malta, which had also received a copy of the draft legislation, had also come out with a similar opinion.

The draft laws were submitted to the EC on April 5. Vide the present communication to the Greek government, the EC has extended the standstill period until August 8. During this period Greece cannot adopt the draft regulation. In any event the Greek authorities are required to reply to the EC's objections. If they proceed with enacting the proposal into law without taking into account the objections, the EC is entitled to launch infringement proceedings.

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