News Archive - Chevron Consultants

Amendments to the Czech gambling legislation

As part of the planned consolidation of public finances, the Czech Government has now implemented amendments to the 2017 Gambling Act, the Gambling Tax Act and the Income Tax Act.

The scope of the Gambling Act has been extended. Any gambling game available in the territory of the Czech Republic will be considered to be operated in the territory of the Czech Republic and its operator will thus be required to hold a Czech gambling licence, even if such game will not be in any way aimed or focused on the residents of the Czech Republic.

Furthermore, the current amendment enables licensed online gambling operators to offer their services not only to Czech players but also to foreign players (subject to applicable local regulations), whereas previously this was not possible as online gambling was limited to players resident in the Czech Republic.

Another noteworthy amendment is the possibility for the Ministry to include on a Blacklist not only websites and applications through which unlicensed gambling games are being operated but also websites and applications that have the essential purpose of causing, enabling, facilitating or concealing a violation of the ban on operating unlicensed gambling games.

As for responsible gaming, additional player protection mechanisms have also been introduced, such as:

“Panic button”: This shall be made available to players, whom, by using it, will be prevented from participating in a game for 48 hours and will trigger the obligation for the operator to offer to the player the possibility to be on a list (Register) of excluded persons.
“Prohibition of risk bonuses”: The term “risk bonus” covers both introductory bonuses; and any bonuses provided to a player after the operator received from such player a request to cancel the player’s account.

Operations of a “live dealer” casino are permitted but only from a “studio” located in a licensed land-based casino in the Czech Republic. Nevertheless, several licensed operators will be able to operate from the same “studio” at once.

The licensing process has been simplified. It now consists of two separate licensing procedures – an “initial license” and a “basic license for a specific type of game.” Unlike as in the past, operators will now not need to repeatedly prove and document a number of general conditions and requirements when applying for a license to operate an additional type of game.

The maximum duration for which the initial license can be granted is not limited by law. The administrative fee for the basic license application remains at CZK5,000 (approximately €200).

Lastly, sports-betting rates are risen from 23 to 30 percent of gross gambling revenue (GGR), while slots taxes remain at 35 percent of GGR; whereas gamblers in the Czech Republic now need to deal with a new winnings tax, which applies to all gambling winnings above the approximate equivalent of €2,000 ($2,100). A transitional period running until July 1 next year will give the industry time to adapt.

Want to know more about where the EU’s gambling legislation is heading? Speak to Lawrence Marchese (lawrence@chevron.group), Kurt Laferla (kurt@chevron.group) and Thees Buschmann (thees@chevron.group) from Chevron Group.

12. March 2024/by Florian Hahn

German Gambling Market – An Overview of the Last Decade

News

The German gambling market has seen significant changes and developments over the last ten years. A comparative analysis of the development of stakes for different gambling services provides valuable insight into the trends and shifts within the industry.

Looking at the development of the lottery market, tax revenue from lottery tax has shown a slight increase over the past decade. In 2023, lottery tax revenue totaled 1.766 billion euros, with a total participation fee of 11.039 billion euros. Despite the introduction of new gambling offers authorized by the State Treaty on Gambling in 2021, lottery stakes have remained relatively stable.

The sports betting market has also undergone changes, with the sports betting tax increasing to 5.3 percent of the assessment basis in 2021. Revenue from the sports betting tax totaled 409.072 million euros in 2023, resulting in a total participation fee of 8.150 billion euros. While there was a slight increase in sports betting stakes before 2021, there has been a decline since the new Interstate Gambling Treaty took effect.

The market for virtual slot machines has seen a clear downward trend in stakes since the State Treaty on Gambling came into force in 2021. Despite the popularity of sports betting and virtual slot machines being offered by the same providers, there has been a significant decline in virtual slot machine stakes compared to sports betting.

Online poker, on the other hand, has shown resilience in terms of stake development. While other gambling services have experienced fluctuations, online poker stakes have remained relatively stable. It is interesting to note that some companies offering online poker also provide sports betting and virtual slot machines, leading to potential shifts in the overall market dynamics.

Overall, the introduction of the State Treaty on Gambling in 2021 has had varying effects on different gambling services. Assuming tax compliance of illegal providers, the treaty has led to changes in tax revenues, with significant impacts on virtual slot machines and online poker. The future of the German gambling market remains uncertain, with potential shifts in stake development and market dynamics to watch out for.

In conclusion, the German gambling market has seen significant changes over the last decade, with different gambling services experiencing varied trends in stake development. It will be interesting to see how the market evolves in the coming years and how regulatory changes will impact the industry as a whole.

Get ahead of the game by understanding the impacts of regulatory changes on the German gambling market. Contact Thees Buschmann (thees@chevron.group), Lawrence Marchese (lawrence@chevron.group) and Kurt Laferla(kurt@chevron.group) from Chevron Group for an expert advice.

7. March 2024/by Florian Hahn

New Digital Identity Wallet – The European Parliament Approves Regulation

News

The European Parliament has adopted the regulation amending the eIDAS Regulation and providing for the creation of a New Digital Identity Wallet which will allow citizens to identify and authenticate themselves online without having to resort to commercial providers.

Used on a voluntary basis, the EU wallet users will be provided with free qualified electronic signatures, the most trusted, which will have the same legal standing as a handwritten signature, as well as wallet-to-wallet interactions, to improve the fluidity of digital exchanges.

The wallet will be open-source encouraging transparency and innovation and enhancing security. To ensure accountability and traceability, stringent rules will be set for the registration and oversight of the companies involved.

Via a so-called privacy dashboard, users will be able to have full control of their data and will be able to request their data be deleted, as provided for under the GDPR.

The EU believes that this regulation, directly applicable, unlike Directives, will put citizens in full control of the use and sharing of their data, revolutionizing the way online services are accessed and utilised.

In relation to the gambling industry, the e-ID will provide players with an easy and secure option to confirm their identity, therefore streamlining the entire onboarding process.

To become law, the regulation will now have to be endorsed by the EU Council of Ministers.

Want to know more about how EU legislation may have an impact on gaming compliance? Speak to Thees Buschmann (thees@chevron.group), Lawrence Marchese (lawrence@chevron.group), Kurt Laferla (kurt@chevron.group) from Chevron Group.

6. March 2024/by Florian Hahn

Italy: Tender for licences postponed to late Autumn

News

The much-anticipated tender for the gaming licences, already subject to an extension in 2022, which will expire at the end of this year, will be almost certainly called this Autumn.

The prediction of this possible deadline is based on the technical steps that such process needs to follow.

ADM, the Italian Customs and Monopolies agency and supervisory authority for gambling in Italy, will transmit the technical specifications required by the licences to the European Commission. These are defined mainly by SOGEI, the IT company fully owned by the Italian Ministry of Economy and Finance, and are contained in the section regarding the gaming technological platforms of the decree at the moment discussed in Parliament.

This decree should be approved in March, however, delays are always possible due to last minute amendments. The bill will be then sent to the Council of State which is believed will be not a major obstacle.

The bill will also be transmitted to the European Commission for the so called 3 month “standstill period” during which opinions and observations may entail interventions delaying further the conclusion of the process.

Once received the green light from the Council of State and the European Commission, the call for tenders will be published on the Italian Official Journal.

Want to know more how licensing works in Italy or in other jurisdictions? Speak to Lawrence Marchese (lawrence@chevron.group), Mel McElhatton (melissa@chevron.group), Kurt Laferla (kurt@chevron.group) and Thees Buschmann (thees@chevron.group) from Chevron Group.

22. February 2024/by Florian Hahn

Change the Game? European Football Clubs to Become Subject Persons of AML Regulation

News

With the coming into force of the latest package of AML measures agreed upon in the provisional agreement between the EU Commission and Parliament, professional football clubs will find themselves subject persons of their country of residence’s AML laws.

But how does that go together, money laundering and Europe’s most famous sports? Isn’t that going a bit too far?

Here are some key facts on the situation as is:

Professional football has an estimated worldwide net worth of around 600 billion Euros.
Only in the FIFA 2015 corruption scandal, 150 million Euros were suspected of having been obtained from illicit sources or used for ill-gotten means.
Several match-fixing and racketeering scandals rocked the European football world in the last years, i.e. in Germany and Italy.
Since 2009, the FATF has warned that the mechanisms of professional football are likely to be abused for the purposes of money laundering.
Many European countries consider match-fixing as an AML-related risk in their domestic AML legislation, such as the Netherlands, Spain or the United Kingdom.

What can football clubs expect:

Member states will be given five years to implement the new ruleset into their domestic laws, i.e. before the laws must be applied to football clubs.
Football clubs will then see themselves faced with obligations which are common to other industries on the spot of AML oversight, such as 1) due diligence obligations, e.g. source of wealth & funds-investigations, 2) documented AML risk management, 3) appointment of AML officers & 4) reporting of suspicious activities in relation to their businesses.
The draft regulation is expected to contain an opening clause, allowing the member state to exclude clubs from the applicability of the AML legislation, in case of proven low risks.

So, all in all, the broadening of the scope of the EU’s harmonised AML legislation does look more like a long overdue and necessary step, rather than the hysterical political overreaction that it may have seemed, at first glance.

Further, an increased level of scrutiny, the identification of vulnerabilities and the implementation of risk mitigation strategies have led to positive impacts on brand reputation, company standing and business opportunities for uncounted enterprises in other business sectors.

Football clubs will now be given a term of up to five years to prepare for the new environment, develop and implement frameworks for ML prevention and risk mitigation, and get up to speed with AML obligations.

Want to discuss further regulatory developments in AML, CFT and professional sports, and how to stay current in an ever-evolving regulatory landscape? Get back to Chevron Group’s Lawrence Marchese (lawrence@chevron.group), Kurt Laferla (kurt@chevron.group) and Thees Buschmann (thees@chevron.group).

9. February 2024/by Florian Hahn