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The New Belgian Gaming Legislation: B2B Model For Online Gambling Operators

La nouvelle législation sur les jeux de hasard en Belgique introduit un cadre réglementaire strict qui englobe tous les types de jeux, qu’ils soient en ligne ou hors ligne. Ce dispositif impose un système de licences pour les opérateurs, incluant le poker, les paris sportifs et les paris sur les courses de chevaux, à l’exception des loteries, qui restent sous le monopole de La Loterie Nationale. Pour offrir des services de jeux en ligne, les opérateurs étrangers doivent d’abord obtenir une licence de jeux terrestres en Belgique et relocaliser leur serveur sur le territoire belge. Ce processus s’avère complexe, car les licences de casino, de salle de jeux ou de paris déjà attribuées limitent l’accès pour les nouveaux entrants. Les restrictions imposées par la loi pourraient être perçues comme discriminatoires, surtout à la lumière d’une récente décision de la Cour de justice de l’UE qui affaiblit le principe de reconnaissance mutuelle dans le domaine des jeux en ligne. Malgré les justifications du gouvernement belge, la conformité avec les principes de droit de l’UE pourrait poser problème, laissant présager des contestations possibles. Pour contourner ces exigences, les opérateurs en ligne pourraient envisager des accords de coopération avec des titulaires de licences belges, permettant ainsi une synergie bénéfique. Ce modèle B2B pourrait optimiser les ressources tout en respectant les réglementations en vigueur, tout en étant soumis à l’examen des lois sur la concurrence pour garantir leur légalité.

Gaming Law’s Main Features

Put simply, under the new regulatory regime, all kinds of games of chance will be covered by the scope of application of the Gaming Law, whether such games of chance are provided offline or online, except when otherwise provided for. Concretely, a licensing system will be imposed for all kinds of games of chance, including but not limited to poker, sports betting (whether fixed-odd or mutual) and horse race betting, except for lotteries which remain the monopoly of the state-owned incumbent, La Loterie Nationale, and are thus excluded from the Gaming Law’s scope of application. The Belgian Gaming Commission will be entrusted with the task of granting licenses to both offline and online gambling operators.

The requirement for a Belgian land-based license

In order to be able to offer online gambling services, the Gaming Law requires operators from other Member States to already hold a license for land-based gambling operations in Belgium and to (re)locate their server in a permanent establishment on the Belgian territory. This means that a foreign operator, duly licensed and operating from another Member State, must first become the licensed operator of a casino (license A), a gaming arcade (license B) or a betting service (license F1) in Belgium, in order to then apply for an online license to offer the same services to Belgian consumers (A+, B+ or F1+ licenses). In addition, in order to obtain the online license applied for, such operator is required to relocate its servers into a permanent establishment in Belgium. Furthermore, the Gaming Law also provides for a limitation by Royal Decree of the maximum number of land-based licenses for casinos, gaming arcades and betting services. In order to determine this maximum amount, account must be taken of the number of operators already present on the Belgian market.

Needless to say, these requirements not only rule out any account that could be taken of obligations to which an operator is already subjected in its home Member State. They also seem to be discriminatory towards any foreign operators not yet established in Belgium. For instance, there are only nine licensed casinos in Belgium, and these licenses have already been awarded for a (renewable) period of 15 years. In these circumstances, it would indeed seem very difficult, if not impossible, for a foreign EU operator to obtain one of those licenses as a prerequisite for obtaining an online license for casino games in Belgium.

The Belgian Government’s confidence in enacting such a legislation may have been boosted by the ECJ’s recent landmark ruling in Santa Casa v. Bwin (September 8th, 2009) which refused to upheld the mutual recognition principle, as set out in Cassis de Dijon, in the field of online gambling across the EU. Hence, according to the Belgian Government, the restrictions on both the free movement of services and the freedom of establishment contained in the Gaming Law can be considered to be justified by mandatory requirements in accordance with settled case law of the ECJ. Notwithstanding the above justifications put forward by the Belgian Government, we doubt that the Gaming Law could pass the proportionality test whose observance is incumbent upon Member States pursuant to consistent case law of the ECJ. Accordingly, one cannot rule out the possibility that the Gaming Law could be challenged on the basis of sound EU law principles, whether by private stakeholders or the EU Commission.

B2B Model For Online Gambling Operators

In view of the requirement for a Belgian land-based license, as a prerequisite for obtaining an online one, it is our understanding that major online gambling operators could consider entering into cooperation agreements with Belgian land-based licensees who could then apply for a corresponding online license.

Clearly, this would be a win-win form of cooperation. On the one hand, Belgian land-based licensees do not necessarily have the marketing skills and software know-how to run online gambling services by their own means. On the other hand, online gambling operators will not have to establish in Belgium to offer their services to end users and will thus allocate their resources in the most efficient way, provided all stakeholders reach a mutually satisfactory agreement.

Our understanding is that such cooperation agreements will have to be scrutinized in light of Commission Regulation No 2790/1999 of 22 December 1999 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices and, where appropriate, of Belgian Competition law in order to ensure their compliance with competition rules. The interface between ex ante online gambling sector-specific regulation and ex post competition rules is likely to become a reality in the gambling industry…

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