Part 1 Introduction...1

Transcription

1 Table of Contents Part 1 Introduction...1 Chapter 1 What Is the Internet?...3 Anthony Cabot...3 Analog Telephones in the Digital Age...4 Transmission of Data...5 Routing Of Data...7 Chapter 2 What Is Gambling?...9 A Basic Definition...10 Prize...11 Chance...11 Predominance Test Gambling Instinct Test All Wagers Are Illegal Chance in the World of Computer Games Consideration...15 Intrinsic Value Test Free Entry as Eliminating Consideration Fees for Internet Access Game Points as Consideration Flexible Entry as Eliminating Consideration The Dangers of Flexible-Entry Contests Chapter 3 Challenges for Internet Gambling...21 The Challenges Facing Electronic Transfer of Funds...22 Fund Transfer Systems...24 The Changing Landscape Internet Gambling Must Be Secure From Hackers...25 Internet Gambling Must Overcome Integrity Issues...25 Internet Gambling Faces an Uncertain Legal Future...27 Chapter 4 Traditional Versus Internet Gambling...29 Casinos...29 Accessibility Amenities/Ambiance Trust... 31

2 vi Internet Gambling Report IX Lotteries...32 Quality of Play Accessibility Trust Value Race And Sports Books...34 Race Wagering Sports Wagering Part II Business Perspectives...39 Chapter 5 IP Considerations...41 What Is Intellectual Property?...42 Copyrights...42 Literary, Artistic and Musical Copyrights Moral Rights Patents and Inventions...45 Trademarks/Logos...46 Where from Here?...48 Chapter 6 Age Verification...49 Overview of Business and Legal Risks...50 Common Forms of Age Verification...50 Use of Government-Issued ID Database for Age Verification Pseudo-Verification Based on Presentation of a Credit or Debit Card Comparing a Web Site Visitor s Personal Information with Consumer Database or Credit Report UK Age Verification Legislation Concerning Online Gambling Selecting an Age Verification Service Provider...57 Chapter 7 Data Sharing...59 Why is Data Sharing Important?...60 The Benefits of Data Sharing...60 Reduced Fraud Rate Reduce False Positives Reduced Manual Review Costs Improved Decision Making Improved Customer Experience Where from Here?...62

3 Table of Contents vii Part III Legal, Regulatory, and Policy Issues...63 Chapter 8 Why Internet Gambling May Frustrate Public Policy...65 Eradication...66 Decriminalization...69 Gambler Protection Model...69 Government Neutral Model...72 Government Protection Model...73 Chapter 9 Prohibitory Challenges...77 Policing Operators...79 Policing Home Users...79 Policing Internet Service Providers...82 Policing Index Providers and Advertisers...85 Policing Financial Transaction Providers...86 Chapter 10 Regulatory Challenges...89 What Are the Goals of Effective Regulation?...91 Government Protection Industry Promotion and Protection Player Protection What Are the Important Legislative Functions?...93 What Are the Elements of an Effective Regulatory System?...93 Enforcement Investigation and Licensing Audit and Accounting Judicial Oversight Other Agency Functions Technical Requirements Player Accounts Other Requirements Chapter 11 The New Playing Field The Techno-Legal Loop The Phenomenon of Digital Convergence Gambling and Convergence - All Games the Same? Convergence and Hybridization Lotteries Electronic Game Cards Skill Game Crossovers Wire-Line Cell (Mobile) Phones

4 viii Internet Gambling Report IX Wi-Fi Cable Interactive TV Satellite Communications Broadband Inter-Effects of Legalization and Regulation - A Look at Future Scenarios Future Policy Considerations: Net Neutrality and the Open Internet Internet 2.0, Fast Lane, and Fees The Google Auction and Phone Browsers - Fortunate Prospects for the Future Where from Here? Chapter 12 International Law The Antigua/US Dispute The US Position Failure to Make a Prima Facie Case No US GATS Commitment on Gambling and Betting Services US Measures not Inconsistent with GATS Obligations Article XVI Market Access Article XVII National Treatment Articles VI and XI Article XIV WTO Dispute Resolution The Dispute Resolution Panel Report The Appellate Body Report Implementation of the Appellate Body Report The Unlawful Internet Gambling Enforcement Act of The Compliance Panel Report The Compensation Report and Withdrawal Negitations Part IV Global Policies and Perspectives Chapter 13 US Policy Preliminary Groundwork Congressional Findings and Purpose No Other Gambling Laws Affected by UIGEA Definitions 'Bet or Wager' Exclusions from Definition of 'Bet or Wager' 'Business of Betting or Wagering' 'Designated Payment System' 'Financial Transaction Provider' 'Interactive Computer Service' 'Restricted Transaction' 'Financial Institution' 'Unlawful Internet Gambling' Additional Terms Intrastate and Intratribal Exemptions...173

5 Table of Contents ix Requirements for Authorized Intrastate and Intratribal Gambling Does the UIGEA Permit States/Tribes to Regulate Internet Gambling? Interstate Horseracing Exemption Intermediate Routing Prohibition on Acceptance of Any Financial Instrument for Unlawful Internet Gambling Policies and Procedures to Identify and Prevent Restricted Transactions Requirements for Policies and Procedures Exemption for Certain Restricted Transactions Compliance, Freedom from Liability, and Enforcement Civil Remedies Proceedings Limitation for Internet Service Providers Criminal Penalties Circumventions Prevented SEC Internet Gambling in or through Foreign Jurisdictions Regulatory Options The Frank Bills McDermott's Tax Bills The Study Commission Bill Concerning the Wire Act Poker Exemption State-Based Gaming Chapter 14 The United States - A Series of Unintended Events US Constitutional Underpinnings Local Gambling Law and Technology The Wire Act and other Extensions of State Law American Gambling Renaissance Creates a Mass Market Backlash The Statutory Gap and the Jurisdiction Question Congressional Prohibition Efforts Progressively Weaken UIGEA: a Series of Unfortunate Legislative Events Stairway to the States Side Effects Chapter 15 US Case Law Federal Case Law - Criminal Cases United States v. Ross United States v. Cohen Sterling Suffolk Racecourse Ltd. Partnership v. Burrillville Racing Ass'n, Inc US v. Bala US v. D Ambrosia United States v. Tedeschi, et al Complainant, v. Bruce J. Meagher, Respondent. 669 N.W.2d 733 (2003)

6 x Internet Gambling Report IX US v. BetonSports US v. Neteller Federal Case Law - Civil Cases Racketeer Influenced and Corrupt Organizations Act Jubelirer v. MasterCard Int'l In re MasterCard Int'l Inc Fifth Circuit Appeal of In re MasterCard Int'l Inc Jurisdiction: Uebler v. Boss Media, AB Interactive Media Entertainment & Gaming Association, Inc. v US Attorney General et al Trademark and Cybersquatting Rio Properties, Inc., v. Rio International Interlink Int'l Bancorp, LLC v. Societe Des Bains De Mer Et Du Cercle Des Etrangers a Monaco PATENT United States v. $734, st Technology LLC v. Bodog Entertainment Group S.A., Bodog.net and Bodog.com Home Gambling Network, Inc. v Betinternet.com State Case Law Betcha.com v. Washington State Gambling Commission Rousso v. State of Washington State by Humphrey v. Granite Gate Resorts People v. World Interactive Gaming Corp MDS Investments, LLC v. State of Idaho, 138 Idaho 456 (2003) State of North Dakota v. Trauman Conclusion Chapter 16 Advertising and US Law Historical Regulation of Gambling Advertising Traditional Federal Regulations of Gambling Promotion Current Federal Gambling Advertising Regulations The Broadcast Ban The Legal Test Challenges to the Federal Broadcast Ban Liquor Ads Produce a Change Modern Court Decisions Aiding & Abetting/Conspiracy Free Speech Defenses The Casino City Case Play-for-Free Advertising Conclusion Advertising Risk Factors The Medium, Means, and Relationship Used to Disseminate the Commercial Message Type of Gambling Advertised Deceptive or Unfair Advertising Target Audience The Potential Applicability of the Target Jurisdiction s Laws Practical and Political Realities Conclusion...283

7 Table of Contents xi Chapter 17 Canada Criminal Code of Canada Skill Gaming Jurisdiction Advertising and Marketing Online Gaming and the Canadian Criminal Code.292 Offenses under the Code Advertising of Instructional, 'Freeroll' Web sites Advertising of Poker and Other Games of Mixed Skill and Chance Advertising Online Sports Books Affiliate Marketing Practical Considerations on Marketing I-Gaming to Canadian Residents Freedom of Expression as a Defense to Charges of Advertising Gaming & Betting Ontario - Section 13.1 of the Consumer Protection Act, The Mohawks of Kahnawáke Absolute Poker and UltimateBet Scandals White List Rejection Enforcement of the Code against I-Gaming: Starnet and Cyber World Group 303 Starnet Communications Cyber World Group Recent Legislative Developments: Bill C Proceedings before the Senate Committee - November 21 and 27, PartyGaming PLC Appears before the Senate Committee Interests Motivating Clause 5 of the Bill The Specter of a Canadian 'UIGEA' I-Gaming Conducted and Managed by the Provincial Governments, and the Earth Future Lottery Reference Case Where from Here? Chapter 18 Latin America Mexico Argentina Chile Uruguay Brazil Chapter 19 Mexico Chapter 20 EU Policy and Processes The European judicial system The Preliminary Reference Procedure Infringement Action Brought by the European Commission The European Decision-Making Process The Three Main Decision-Making Institutions EU Decision Processes The Treaty of Nice and the Constitutional Treaty: Shaping the Future of the EU

8 xii Internet Gambling Report IX Chapter 21 Europe and Cross-Border Challenges The Electronic Commerce Directive The Services Directive Study on Gambling Services in the Internal Market Case Law The Infringement Cases The Concept of Establishment VAT on Gambling Services - An Unfinished Debate Competition Law and Gambling Services The Trade Barriers Regulation Action Chapter 22 The United Kingdom Background Contractual and jurisdictional issues The Gambling Act Operating Licenses Ongoing Regulation Personal Licenses Fees Appeals Advertising and Marketing Betting Exchanges International Effect Underage Players and Player Verification Taxation Where from Here? Chapter 23 France The market Opening Model Proposed by the Government Horserace Betting Sports Betting Casino games Taxation Creation of Regulatory Body Mutual /Conditional Recognition Timetable Criminal Liability of Remote Gaming Operators Games of Chance Lotteries Bill on the Prevention of Delinquency Liability of Intermediary of Affiliated Service Providers ECJ Case Law National Case Law on Gambling Infringement Proceedings International Aspects - French Jurisprudence on Internet Cases Where from Here?...411

9 Table of Contents xiii Chapter 24 Belgium Games of Chance and Casino Games - Act of Reform of the 1999 Act on Games of Chance Lotteries: The 2002 National Lottery Act National Case Law Commercial Court of Liège, April 23, Liège First instance court, April28, Where from here? Chapter 25 The Netherlands Gambling in the Netherlands The Regulation of Gambling in the Netherlands A Threatened Position? Infringement Proceedings New Dutch Policies regarding the Offering of Internet Gambling History of Online Gaming Regulation Critique on the OGA The Gaming Tax Act and Critique on that Act The Draft for a New Gaming Act Follow-the-Money Approach: Payment Blocking? Internet Gambling Case Law De Lotto vs. Ladbrokes Proceedings Summary Proceedings Main Proceedings Betfair Civil Proceedings The Grounds of the Betfair Summary Appeal Case and in the Main Proceedings The Casino License Allocation: Compagnie Financiere Regionale The Judgment by the Administrative Court of Breda Appeal Proceedings before the Council of State Analysis Allocationof Charity Lottery License: Schindler Betfair Administrative Proceedings Conclusion Chapter 26 Germany Policy Concerns The Legal Basis for Gambling Law in Germany Applicability of German Law Federal Gambling Provisions State Gambling Provisions Poker and the Law Live Poker Tournaments Online Poker Potential Problems for Free-to-Play Poker Recent Case Law...477

10 xiv Internet Gambling Report IX Court Descisions, Landmark Decision by the Federal Constitutional Court Decisions by Administrative Courts in the Transitional Period, Recent Court Decisions Anti-Trust Proceedings against Deutscher Lotto- und Totoblock Trademark Cases Where from Here? Chapter 27 Sweden The Regulatory Framework The Lottery Act Lotteries Promotion of a Foreign Lottery Case Law on Gambling Services Recent Developments Where from Here? Chapter 28 Denmark Danish Legislation and the Monopoly License Internet Gambling Poker Where from Here? Chapter 29 Spain Legal Background A General Overview Advertising of Gambling Activities Sanctions Derived from the Infringement of Spanish Gambling Law Legal Challenges Posed by Internet Gambling in Spain Internet Gambling in Spain Today The Legal Regime for Internet Gambling Activities The Legal Regime for Advertising Internet Gambling Activities Legal Initiatives Adopted in Connection with Internet Gambling Legal Initiatives Adopted by the Autonomous Communities Chapter 30 Italy Gambling in Italy: Today's Regulatory Framework The Blackout Decree of An Anomaly: The 'Punti Telematici' The Challenges Ahead Recent Developments ( ) Games of Skill Liberalization of Gambling Policy...536

11 Table of Contents xv Chapter 31 The Isle of Man Background Telecommunications and Bandwidth The Online Gambling Legislation Allowed Forms of Online Gambling Taxation Tax Rates for Companies Tax Rates for Individuals Individual Tax Cap Value Added Tax Online Gambling Duty Application Fee and Licence Fee Financial Assistance Scheme The Application Procedure Designated Official Regulations Registration and Accounts Regulations Gambling with Credit The Business Participant Rules for Players Accounts Advertising and Marketing of Online Gambling System Verification Certification Procedure for Gambling that Utilizes a Random Number Generato Certification Procedure for Betting Disaster Recovery Anti-Money Laundering Idendification Procedures Record-Keeping Procedures The License The Four Eyes Approach Legal Jurisdictions Problem Gambling Fund The Gambling (Amendment) Act Isle of Man Gambling Control Commissioners Gambling Appeals Tribunal Off-Island Designated Official Chapter 32 Alderney Regulatory Framework Whitelisting to permit advertising in the UK Provisions of the E-Gambling Legislation The AGCC s Approach Toward Regulating E-Gambling 564 How It Works Licensing and Certification Lawful Exercise of E-Gambling License Ongoing Compliance Inspections Where from Here?...571

12 xvi Internet Gambling Report IX Chapter 33 Malta A Timeline of Gambling Regulation The Competent Authority for Internet Gaming Corporate Vehicle for a Remote Gaming Operation Licenses and Licening Procedures Types of Licenses and Period of Validity Licensing Procedures Certification of the Gaming System Gaming License Fees Salient Regulatory Requirements For Carrying Remote Gaming Operations..579 Location of the Online Gaming and Control System No Statutory Restriction on Offering Services in Specific Jurisdictions Licensing of Employees Rules Regarding Player Protection Anti-Money Laundering Provisions Post-Licensing Compliance Taxation of betting operations Gaming Tax Corporate Tax Notable Case Law Where from Here? Chapter 34 The Åland Islands Economic Overview Current Legislation Covering Gambling Lottery Legislation The Right to Practice a Trade Proposed Changes to Current Gambling Legislation Potential Licensees The Scope of the Licensing System Selection Procedure and Criteria for Obtaining a License License Fees and Gaming Taxes Legal Issues of Special Relevance to Internet Gambling The PAF Case Two Interpretations of the Supreme Court s Judgment in the PAF Case Questions of EC Law Indicating that Marketing Cannot Be Considered to Form Part of the Organization of a Lottery Where from Here? Chapter 35 Australia Australian Legislative Framework Federal Internet Gambling Legislation Prohibitions Exclusions from Prohibitions Defense of Reasonable Diligence by Interactive Gambling Service Providers Advertising Regulations Relating to Unenforceability of Agreements Designated Countries...603

13 Table of Contents xvii Internet Industry Code of Practice Review of the Interactive Gambling Act Jurisdictional Issues Australian Legislative Framework State and Territory Internet Gambling Legislation Australian Capital Territory, Queensland, and Victoria Northern Territory Tasmania New South Wales, South Australia, and Western Australia Norfolk Island Bookmakers, TABs, and Exclusivity Betting Exchanges Operation Restrictions Problem Gambling Integrity Taxation Cross-Border Restrictions and the Betfair Case Legal Challenges Race Fields Legislative Protection Challenges The Future Sports Fixture Information Conclusion Where From Here? Chapter 36 New Zealand Gambling Act 2003 History Gaming Reform in New Zealand The New Zealand Racing Board The Racing Act New Zealand Lotteries Commission Prior to the Gambling Act Chapter 37 South Africa Preliminary Developments ( ) Interim Prohibition and the Development of National Policy ( ) The National Gambling Amendment Bill Where from Here? Chapter 38 The Far East China Internet Gambling Cultural Exceptions Targeting the Market

14 xviii Internet Gambling Report IX Localization of the Product Payment Methods Future Developments Hong Kong SAR Macau SAR Future Dvelopments The Philippines Cagayan Special Economic Zone & Freeport Malaysia South Korea Regional Round-up Where from Here? Index...665