Gaming Law International

Interpol reports over 680 suspected soccer match fixes

According to a report by Interpol released on Monday, as many as 680 soccer games played around the world may have been fixed by organized crime. As many as 425 people appear to be involved from 15 countries in Europe, Asia, Africa and South America. Interpol believes approximately $10 million in profits were laundered from the match-fixes. More from The Wall Street Journal.

120,000 Swiss have gambling problems

Interesting article here on Swissinfo.ch on the expansion of gambling in Switzerland and the fact that approximately 120,000 Swiss have a gambling addiction or a problem with gambling. According to the article, research by the Neuchâtel University’s Institute of Economic Research, determined that the social costs of gambling addiction is between CAD$564 million and CAD$681 million annually. 

Madrid new site of EuroVegas casino resort

The Las Vegas Sands Corp. announced today that Madrid has been selected as the site of its next multibillion dollar casino and hotel resort, and not Barcelona. The proposed casino resort will cost approximately €18 billion and will include 12 hotels with 36,000 rooms, six casinos and three golf courses and will be built over a decade. The corporation will inject 35% into development and the remainder will come from external financing.

Europeans dubbed the proposed casino resort "EuroVegas" and the news media in Europe focused almost daily headlines on the fierce competition for the project between Madrid, the nation's capital, and Barcelona, Spain's second-largest city. 

Spain is facing an economic crisis with an unemployment rate of more than 24%. According to reports, EuroVegas developers promised that the casino resort would generate up to 250,000 jobs. The Las Vegas Sands Corp. has apparently said that it will lobby to change the non-smoking laws in Spain to allow gamblers to smoke while they gamble.

Last year, the Las Vegas Sands Corp. surpassed Caesars Entertainment Corp. as the world's largest gaming corporation, posting profits of US$1.27 billion in 2011. The Las Vegas Sands operates, among others, the Venetian and the Palazzo casino resorts on the Las Vegas Strip; the Marina Bay Sands resort in Singapore; and the Venetian Macao and Sands Macao casinos in Macau.

3 Canadians affiliated with PokerStars, Full Tilt Poker and Absolute Poker indicted in U.S. on illegal gambling and anti-money laundering charges

The U.S. Attorney and the FBI today unsealed an indictment today charging 3 Canadians with money laundering, bank fraud and illegal gambling in connection with the operation of Internet gambling websites that provide online gambling services to U.S. residents. Eight other individuals, mostly residents of the U.S., were also indicted. The defendants include the founders of three of the largest Internet gambling sites - PokerStars, Full Tilt Poker and Absolute Poker.

The 3 Canadians indicted are:

• Isai Scheinberg, currently living in the Isle of Man;
• Nelson Burtnick, currently living in Ireland; and
• Ryan Lang, currently living in Canada.

The U.S. has sought the assistance of foreign law enforcement agencies for the arrests of Lang, Burtnick and Scheinberg.

The indictment alleges that the defendants fraudulently circumvented anti-money laundering laws and the Unlawful Internet Gambling Enforcement Act (UIGEA) by disguising payments from U.S. gamblers as payments to fictitious online merchants selling other goods and services, lied to banks about the nature of their businesses and set up fictitious corporations, in order to open bank accounts to accept bets from U.S. players. Scheinberg, one of the founders of PokerStars, is alleged to have acquired a 30% interest in a small bank in Utah called SunFirst Bank in exchange for the Bank agreeing to process payments for PokerStars.

The U.S. also filed a civil complaint against the individual defendants and the poker companies to recover US$3 billion in civil penalties for money laundering. Asset restraining orders were issued against more than 76 bank accounts in 14 countries, including Canada, to freeze the accounts on the basis that the funds are proceeds of crime.

Five Internet domain names used by the poker companies to host the online gambling sites were also seized.

The indictment by the U.S. Attorney General on anti-money laundering law violations is a clever legal manoeuvre that will allow them to prosecute the defendants, secure the extradition of foreign defendants and retain frozen assets with much greater success than if the indictment was based solely on violations of the UIGEA. Most foreign Internet gambling site operators have little to no understanding of international anti-money laundering laws.

The defendants face up to 20 years in prison on the money laundering charges alone.

Legalized Internet gambling starts in France

France opened up its online sports betting and horse racing industry a few weeks ago in time to coincide with the World Cup. Thus far, 17 licences have been issued to 11 operators including Bwin Interactive Entertainment AG from Austria and BetClic Enterprises Ltd. from Malta. Internet poker is in the process of being approved as well in France and may be available by the end of June. In France, the government taxes the total amount of money gambled at 8.8% and there are predictions that with such a high tax rate, the new online gambling sites may not be economically viable. By contrast, in Canada the government does not tax money gambled or gambling wins from legalized gambling, except in the case of professional gamblers. The only forms of legalized gambling in Canada are those that are licensed, registered and regulated by governments in Canada.     

European Court upholds Internet gambling ban in member states

The Court of Justice of the European Union has ruled that an EU member can ban a foreign Internet gambling company based in another member state from operating within its border to protect its citizens against fraud and other crime associated with Internet gambling. The ruling follows a court adviser's March opinion which stated that recognition of gambling licenses across member states is not viable under the EU's current system. 

In the decision, the Court held that "because of the lack of direct contact between consumer and operator, games of chance accessible via the Internet involve different and more substantial risks of fraud by operators against consumers compared with the traditional markets for such games".

The decision confirms that the Netherlands has jurisdiction to prohibit Internet gambling sites based in the UK from offering Internet gambling services to its citizens. The Court stated that: "A member state is entitled to take the view that the mere fact than an operator ...lawfully offers services via the Internet in another member state is not a sufficient assurance that national consumers will be protected."

The ruling is not unexpected. Foreign Internet gambling companies that offer Internet gambling in countries where they are not legally authorized to operate are essentially unregulated and unsupervised in those jurisdictions. 

French to permit (and regulate) Internet gambling

The French government has ended a long-standing ban prohibiting Internet gambling in France and has approved regulations that will grant licenses to foreign companies seeking to offer Internet gambling services to French citizens. Under the new regulations, companies will have to establish separate sites for French customers and provide permanent records on players to the government. There does not appear to be any discussion occurring about which companies can provide online gambling services to French citizens under the new regulations or whether proposed service providers will be subject to investigations to ensure the integrity of the gaming industry as is customary for land based casino operators in Canada and the US.

Internet gambling site allegedly connected to mafia

According to UK news reports, the Internet gambling company Paradise Bet Ltd., that operated the foreign Internet gambling site paradisebet.com, is connected to the Italian Parisi mafia clan. In December 2009, Italian police froze the assets of the London-based gambling site as part of a three-year operation called "Domino" and seized €220 million worth of assets including 227 properties, 680 bank accounts, 61 luxury cars, 71 horses and 35 businesses in Italy and the UK. Savino (or Savinoccio) Parisi, the 48-year-old apparent head of the clan, was among 74 people arrested by Italian officials in Bari, Italy where Paradise Bet operated an office. He is accused of laundering the proceeds of crime, attempted murder, drug trafficking, loan sharking and interfering with bids.

 

Austrian Internet gambling executives held in France

Two executives of Austria's Internet gambling company BWIN Interactive Entertainment Ag, Manfred Bodner and Norbert Teufelberger, were detained in France on Friday and questioned for allegedly violating French gambling laws. They were released late today on a bail of €300,000 each. The investigation against Bodner and Teufelberger in France is concerned with BWIN's alleged conduct advertising its gambling product in France and allegedly accepting bets from citizens of France. 

Policy makers in the EU are already divided on the issue of the competence of individual states to restrict gambling in their territories to state-owned monopolies. Many EU gaming lawyers argue that European state gambling monopolies are inconsistent with EU competition law. However, considering the unique nature of gambling and the overriding concern to ensure its integrity by, inter alia, ensuring the absence of criminals in gaming and restricting minors from having any access to gambling, member states restricting gambling would have cause to argue that maintaining a state monopoly is the only way to maintain the public order. Several member states have indicated that they will challenge state gambling monopolies at the EU Court of Justice to ensure that online gambling services can be provided anywhere in the EU by any member state. 

Internet gambling in der Österreich

A new study published today shows that Austrians spent approximately €1.3 billion gambling over the Internet in 2005. On a per capita basis, they spent €177, more than four times as much as Germans (at €40) and almost five times as much as the Swiss (at €36). Part of the difference in gambling spending is attributable to legislative differences between Austria, Germany and Switzerland. Read more here.  

EU service directive exempts gambling

The European Parliament voted last week to approve First Reading of the Service Directive, exempting gambling from its application. The aim of the Directive is to create a freer market for the services sector by removing the legal and administrative barriers that hinder the provision of services between member states and bringing the EU in line with the provisions of the Treaty of Rome. As gambling was exempt from the Directive, it will be left to the European Court of Justice to determine the competence of member states that seek to restrict or prevent the provision of gambling services across member states.