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Compliance Updates

Update: Eurosport Fined for Gambling Ads

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On September 16, 2021 the National Police Board (“NPB”) imposed a prohibition order and conditional fine of EUR 800,000 for Eurosport SAS (“Eurosport”), a pan-European sports network established in France, for broadcasting gambling advertisements on the Finnish language version of Eurosport 1 television channel.

According to our sources, prior to this the NPB had twice approached Eurosport arguing they infringe the Finnish Lotteries Act marketing prohibitions and requested the actions to be ended. Eurosport remained passive throughout the process until October 27, when they informed the NPB that in their view the decisions of September 16 were “manifestly incorrect”. Eurosport added that they will comply with the NPB’s request for now and they will not broadcast commercial gambling advertising on Eurosport 1 in Finland for the period of three months starting from October 28, 2021. Eurosport notified the NPB of their intention to appeal the NPB’s decisions of September 16 and the Helsinki Administrative Court confirmed that Eurosports appeal was filed October 28 and it is currently pending.

The subject matter of the case is interesting. The NPB makes a convincing case that Eurosports gambling advertisement is infringing the Finnish Lotteries Act. However, their argumentation regarding Audiovisual Media Services Directive (“AVMSD”) is less convincing.

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The country of origin principle (“CoO principle”), according to which each EU Member State is legally responsible for all audiovisual media services originating from its own country, is a cornerstone of the AVMSD. Article 4 lays down exceptions to the CoO principle and defines the procedure which must be followed if a Member State is to take action against a media service provider established in another EU Member State.

With regarding to the AVMSD, the NPB would have to at the very least notify the EU Commission pursuant to Article 4 (4) of their intended actions and to substantiate the grounds on which its assessment is based. The EU Commission would need to decide that the measures are compatible with EU law. That has not been the case here.

The NPB argues that the AVMSD does not intend to harmonise gambling advertising in the EU and thus the CoO principle or Article 4 procedures do not restrict them taking direct action against Eurosport.The NPB’s argumentation is based on the recital 10 of the consolidating directive of 2018 which states that the AVMSD does not affect a Member State’s competence to decide on national approach to gambling advertising presumed that the measures taken are justified, proportionate to the objective pursued and necessary under the EU law.

As it is not stated anywhere in the AVMSD (original or consolidated version) that gambling marketing is excluded from the scope, the NPB’s argumentation appears at least questionable. If the Helsinki Administrative Court comes into a similar conclusion the case will fall apart.

The article has been written Antti Koivula, Consulting Legal Advisor at Legal Gaming.

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Compliance Updates

EGBA Welcomes European Parliament’s Approval Of New EU Anti-Money Laundering Framework

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The EU’s new anti-money laundering package aims to create a more consistent regulatory framework and will benefit online gambling operators by standardising AML rules and reporting requirements across member states.

Brussels, 24 April 2024 – The European Parliament has approved the EU’s new anti-money laundering (AML) package at its plenary sitting today, marking a significant milestone towards a new EU framework for combatting financial crime. The European Gaming and Betting Association (EGBA), representing Europe’s leading online gambling operators, welcomes the Parliament’s approval of the new AML package and believes the incoming rule changes will strengthen the EU’s approach to tackling money laundering.

The new package will contain:

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  • single rulebook regulation – with provisions on conducting due diligence on customers, transparency of beneficial owners and the use of crypto-assets.
  • The 6th Anti-Money Laundering Directive – containing national provisions on supervision and national AML authorities, as well as on the access of authorities to necessary and reliable information, e.g. beneficial ownership registers.
  • The establishment of the European Anti-Money Laundering Authority (AMLA) – which have supervisory and investigative powers to ensure compliance with AML requirements, operating in conjunction with national AML authorities.

EGBA believes the new rules will benefit Europe’s online gambling operators by ensuring a consistent regulatory approach across EU member states. Another important feature, under the competence of AMLA, will be the creation of a harmonised reporting format for Suspicious Transaction Reports (STRs). This will ensure that Europe’s online gambling operators encounter the same STR requirements across all EU member states, thereby setting clear and consistent expectations that will reduce administrative burdens and costs.

To assist online gambling operators in complying with the EU’s new AML rules, EGBA has developed industry-specific guidelines on anti-money laundering which apply a risk-based approach and include practical measures that operators can take – on customer and business risk assessments, customer due diligence processes, suspicious transaction reporting, and record keeping. EGBA members already apply the guidelines and submit annual reports to EGBA that summarise their progress in implementing its measures. The guidelines are also open to all operators based in the EU and EGBA encourages operators to sign up to them.

The AML package now awaits formal adoption by the Council of the EU, expected in May, before being published in the EU’s Official Journal.

“We welcome the European Parliament’s approval of the new anti-money laundering package. The new framework will set high standards and ensure greater consistency in the application of AML rules across the EU. Online gambling operators, especially those operating in multiple countries, will benefit from a single rulebook and harmonised reporting requirements that will unravel national complexities. We will look to review our industry guidelines on AML to ensure their alignment with the new EU rules. By signing up to the guidelines, operators can already prepare themselves for the incoming changes in the EU rules and join our members in their efforts to proactively and positively contribute to the EU’s fight against money laundering.” – Dr. Ekaterina Hartmann, Director of Legal and Regulatory Affairs, EGBA.

 

Source: EGBA

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Compliance Updates

Brazil’s Ministry of Finance Appoints Régis Dudena as Secretary of Prizes and Betting

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Regis Dudena, a seasoned lawyer with expertise in Public and Regulatory Law, has been appointed as the new Secretary of Prizes and Betting at the Ministry of Finance in Brazil. Dudena’s appointment ordinance is signed by Rui Costa, Minister of the Civil House.

The new secretary had already been visiting the Ministry of Finance and getting closer to the entire group at the Secretariat of Prizes and Betting, until then led by Simone Vicentini, deputy secretary.

The appointment of the lawyer is attributed to the Executive Secretary of Finance, Dario Durigan. Dario and Dudena worked together at Palácio do Planalto during Dilma Rousseff’s government.

Both worked in the Legal Affairs secretariat of the Civil House. Dudena’s name is linked to other names on the left. He has good relations with Edinho Silva (PT), mayor of Araraquara (SP).

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The SPA started operating two months ago. Since then, it had been without a permanent boss. Lawyer José Francisco Manssur, special advisor to the Ministry of Finance who coordinated the regulation of sports betting from the beginning, was the most likely to take on the position. But he was exonerated under pressure from Centrão politicians.

Bets representatives welcomed the name Régis Dudena.

From the beginning, the SPA was under the responsibility of Simone Vicentini, appointed as deputy secretary. Since then, it has edited the ordinances that defined requirements for laboratory accreditation and the sector’s regulatory policy.

Under her supervision, three laboratories have already been approved, GLI, eCogra, and BMM. Last week, the ordinance establishing the rules for payment transactions to be complied with by sports betting and online gaming operators was also published.

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Crown Reinstated at Sydney Casino

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The NSW Independent Casino Commission has found Crown Sydney suitable to retain its casino licence after nearly three years of intensive remediation.

Chief Commissioner, Philip Crawford, said Crown has come a long way and must now demonstrate its long-term commitment to maintaining suitability.

“The NICC is confident the Crown we deemed suitable today has a strong model to keep operating into the future,” Mr Crawford said.

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The NICC’s suitability assessment established that Crown Sydney has fundamentally reformed its business and is operating the casino within the objects of the Act, the requirements of the suitability deed, and in compliance with its regulatory obligations.

In addition to proving it can run the casino lawfully, Crown has remediated its business in other meaningful ways such as building a culture of transparency and accountability across its integrated resort.

“Hard work and transformation aside, the NICC has not forgotten the level of misconduct exposed in 2021 when Crown was found unsuitable,” said Mr Crawford.

“Crown Sydney has ongoing work to reach steady state and it must continue to lift standards and maintain its cultural transformation.

“There is and will always be room for improvement, but Crown is a changed business that is looking toward the future.

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“Likewise, the NICC is a changed regulator with enhanced powers, a singular focus on casinos, and a mandate to address the risks of harm.

“This decision is a positive outcome for Crown Sydney, its staff, and the community – who can be sure the NICC will use all of its powers to keep the casino in check.”

In addition to the implementation of hundreds of new internal controls, the Bergin-based reforms have been reflected in a new licence and new regulatory agreement between Crown Sydney, the NSW Government and the NICC.

These agreements include updated settings, such as the removal of fetters to the NICC’s powers, as well as previous compensation trigger clauses that are no longer part of the casino legislation.

Mr Crawford said: “Crown cannot disregard the responsibility and privilege that comes with holding a casino licence. Crown Sydney’s ability to provide a destination hospitality and entertainment venue underpinned by the restricted gaming facility is contingent on its steadfast commitment to continuing suitability, accountability and compliance.”

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