REGULATORY FRAMEWORK FOR ONLINE GAMBLING: A EUROPEAN PERSPECTIVE

1. REGULATORY FRAMEWORK FOR ONLINE GAMBLING:A EUROPEAN PERSPECTIVE Manuel Esparrago – RGA Brussels Manager Gaming Money Conference, Athens, 29 November 2011

2. The Remote Gambling Association (RGA) • Largest trade association for the online gambling industry, with 30 members • All its members must be licensed for gambling purposes in Europe and comply with a Code of Conduct on Social Responsibility • Encourages high standards of probity and integrity • Represents industry in international, European and national fora • Offices in London and Brussels

3. RGA Members

4. EU Legal Framework • Treaty on the Functioning of the European Union (TFEU) applies to gambling services: • Article 49: freedom of establishment • Article 56: freedom to provide services • Other provisions such as Article 107 on State aids • Gambling excluded from most of secondary legislation  (e.g. Services and e-Commerce Directives) • No specific legal instrument dealing with gambling (but possibility of a EU legal instrument in near future) • Member States decide how to organise gambling activities but in compliance with EU law

5. Restrictions • Freedom to provide services enables operators legally established in one Member State to offers its services across the EU • Conditions to restrict that freedom, as laid down by case-law of Court of Justice (CJEU): • justified by overriding reasons of general interest • suitable to attain pursued objective • proportionate • non-discriminatory • consistent with pursued objective

6. Trend across EU • Moving from semi-public or State-run monopolies on gambling to licensing regimes • Main reasons: • Legal pressure: infringement proceedings by European Commission, CJEU case-law • Consumers demand for a wider variety of product choice and value and practical difficulties to prevent them from using online operators of their choice

7. Online Gambling in the EU (*) SWEDEN FINLAND NORWAY Licensing regime for at least some activities , in place or in progress. ESTONIA 2009 LATVIA 2006 DENMARK 2011 LITHUANIA Monopoly IRELAND UNITED NETH. POLAND 2011 KINGDOM 2005 Explicitly Prohibited GERMANY BEL 2011 CZECH LUX. REPUBLIC SLOVAKIA 2006 AUSTRIA No specific regulation at national level FRAN CE 2010 HUNGARY ROMANIA 2010 SLOVENIA ITALY 2006 BULGARIA (*) State of play as of the 1stNovember 2011. PORTUGAL SPAIN 2011 GREECE 2011 - 2012 CYPRUS MALTA

8. Some common traits of viable licensing regimes In addition to adequate safeguards for consumers and measures to tackle fraud and crime: • Level playing field for both new entrants and incumbent operators – no discrimination • No duplication of requirements (e.g. additional server) • Wide scope of products and attractive offer to consumers • Reasonable taxation, based on GGR (KPMG report)

9. Greece and EU law • Infringement proceeding against Greek gambling laws; launched by European Commission in June 2007; reasoned opinion sent in February 2008 • 2006 and 2009 CJEU rulings against prohibition on electric and electronic games (including slot machines) outside casinos • 2010 Commission decision on State aid case concerning different admission tax in casinos New Law adopted in August 2011: • maintains OPAP monopoly for virtually all offline activities • replaces blanket ban on online gambling by licensing regime

10. New legal framework: positive elements • Licensing and regulation   • Helpful discussions with government during the process, e.g. technical standards • Receptiveness to industry's arguments on the method of taxation (GGR) • Law rightly acknowledges demand for a wide variety of gambling products

11. Main restrictions in new legal framework • RGA State aid complaint on competition grounds: • 30% GGR on online gambling operators (20-30% for offline casinos) but full exemption for OPAP’s offline activities • 10% withholding tax on customers’ winnings from online gambling but exemption for winnings up to EUR 100 from OPAP outlets

12. Main restrictions in new legal framework • RGA complaint on internal market grounds: • Non-transparent Extension of OPAP’s concession for 10 years • Possible retroactive taxation of online gambling  • Possible server requirement in Greece  • Possible limitation of number of licences • Seat or permanent establishment in Greece • Tender procedure only opened to capital companies • Identification of players and requirement to have a player card • Financial transactions exclusively via Greek banks or Greek branches • Imposing a higher age limit for online (21) than for offline (18) gambling • Disproportionate criminal sanctions        

13. Conclusions • Greece’s gambling laws have a long tradition of being at odds with EU law • RGA welcomes introduction of licensing regime for some online activities • However, many aspects of the new regulatory framework are solely aimed at protecting OPAP’s position, not consumers or any other valid public policy objective • A review of the current legal framework is essential to comply with EU law and to channel Greek consumers to an attractive and safe offer

14. Thank you for your attention