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Saturday, October 31, 2009
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Spanish gaming reports that the privatization of State managed lotteries and betting in Spain is now closer. This means that the Spain might shortly become a new target for gaming operators that have seen in few years first the opening up of the Italian gaming market and will be shortly see the end of the State monopolies in France.

This scenario brings me to the conclusion that it is high time to set some EU-wide gaming rules allowing – as already occurred for instance in the e-commerce sector – operators to offer their games throughout all the European Union complying only with the rules of the country where they are based and avoiding the issues already discussed.

In this respect, the recent Bwin case surprises me even more. Why should the principle of the country of origin not apply to the gaming sector? Legislators should understand the relevance of the gaming business and the need to protect the investments of gaming operators which can occur on one hand through the implementation of measures able to stop the offer of games by non-licensed operators and on the on the other hand through the setting up at an EU level of clearer and coherent rules.

The time of the State monopolies is over and the gaming sector shall be treated and regulated by EU authorities as any other sector.

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Wednesday, October 28, 2009
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The coming into force of the rules governing class actions in Italy has been postponed several times, but finally such regulations - as amended by Law 23 July 2009 No. 99 - will come into force on 1 January 2010. This is a considerable change that however will have limited effects since it will be possible to bring class actions only for the protection of: 
  • contractual rights of a number of consumers and users which have an identical claim towards a company, including claims based on standard contractual terms (e.g. the Ts&Cs of a website); 
  • identical rights held by final users of a product towards its manufacturer; and
  • identical rights of consumers and users to the recovery of the damages arising out of unfair commercial practices or of unfair competition conducts.  
Despite of the limited scope of the regulations governing class action proceedings, Internet operators, including e-commerce and gaming operators, shall pay more attention in the future to the Ts&Cs governing the relationships with their users as well as to the prize competitions, promotions and advertising initiatives implemented to promote their services. In particular, advertisments or prize competitions able to mislead consumers might be not only sanctionable by the Italian Competition Authority through fines up to € 500,000, but might also give rise to class action proceedings. Therefore, from now on operators shall monitor very closely the activity of their marketing departments. 
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After the issue of the new rules governing online bingo, the Italian gaming authority has also set new rules for offline bingo prescribing that: 
  • the applicable taxes will be equal to 11% (previously 20%) of the sale price of bingo cards; and that
  • the amount due to the centralized gaming controller will be 1% (previously up to 3.80%) of the sale price of bingo cards.
Also, it will be possible to postpone the payment of the abovementioned amount up to 60 days from the date of collection of the bingo cards and in any case up to the 15th of December of each year for the amount due in relation to the last two months period of each year.
Finally the new rules prescribed that the awarded jackpot shall be at least 70% (previously 58%) of the total amount collected from the sale of bingo cards during each game and amended the regulations on the allocation of the prizes.
These new rules will be effective only during a trial period which will commence on 1 November 2009 and will terminate on 31 December 2010 and are aimed at boosting the sector which is currently facing a crisis, but the associations of bingo halls holders assert that they will substantially damage small bingo halls which will not be able to award prizes of the same value as those awarded by large bingo halls.  
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Monday, October 26, 2009
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Datonomy reports that tougher sanctions for data protection breaches are about to be introduced in the UK. This reminds me that similar measures have been implemented in Italy at the end of 2008. Indeed, Law No. 207/2008 prescribed, among others, sanctions:
  • up to € 36,000 if a privacy policy compliant with the requirements prescribed by Italian data protection law is not provided to users; and
  • up to € 120,000 for the unlawful processing of personal data (which includes any processing of personal data without the prior consent of the relative user) and for the lack of implementation of the security measures in the processing of personal data that are specifically decribed in the Italian Data Protection Code;  
Moreover, Law No. 207/2008 states that if the same entity breaches several provisions of the Italian Data Protection Code in relation to particularly relevant or large databases, it can be santioned with fines up to € 300,000 which can be doubled if the breach gives rise to considerable damages to users or is able to damage a number of users.
Finally, the abovementioned santions can be quadripled if they appear ineffective considering the financial conditions of the breaching party which - for instance - might occur in case of multinational companies.  
Internet operators, including e-commerce and gaming operators, usually manage databases containing a substantial amount of personal data and sometimes underestimate privacy issues either adopting privacy policies that are very generic or are a mere translation of the policy adopted in the US or sending marketing emails without having requested the prior express consent from users.
These new sanctions will encourage operators to pay more attention to the processing of the personal data of their users which will entail a better protection of users' privacy.
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Thursday, October 22, 2009
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The Italian administrative court of Lazio region held that Italian gaming licensees are not liable for the conduct of their marketing shops, unless they have acted with negligence in monitoring the activity of such shops.
Italian gaming law allows gaming operators to enter into agreements with shops only for the marketing of gaming account top up cards and for the distribution and collection of gaming account agreements. These shops (the so called “PDCs”) are strictly prohibited to offer any games to their customers and cannot be involved in any gaming or betting activity.
The Italian gaming authority following the breach of the abovementioned ban by a PDC had automatically disconnected the relative licensee from the servers of the Italian gaming authority for 30 days consequently blocking any gaming activity offered by such licensee during this period without verifying whether there was any negligence by the licensee in the monitoring of the activity of the PDC.
The administrative court of Lazio region held that licensees cannot be considered “objectively” liable for the activity performed by the PDCs. Indeed, in this specific case, the licensee had instructed an external company to monitor the activity of its PDCs and following the challenging of the illegal conduct of the PDC by the Italian gaming authority had immediately terminated the agreement with this PDC. Such measures have been considered adequate to relative scenario by the administrative court that therefore annulled the order implementing the disconnection from the servers of the Italian gaming authority. 
This decision on one hand represents a good news for Italian gaming licensees since it held that if they put in place adequate monitoring systems in relation to the activity of PDCs and adequate measures to react to illegal activities of their PDCs, they will not be considered liable for their conduct. On the other hand though, this decision might cause less stringent controls by operators on the activity of PDCs and potentially a higher percentage of illegal activities by the PDCs.
The main issue arisen from this decision though is that PDCs need to be regulated through more stringent measures to avoid that they become illegal betting or gaming shops.
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Thursday, October 15, 2009
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As part of a draft law decree aimed at pushing the development of the tourism sector, the Italian Ministry of the Tourism, Ms. Brambilla has filed a proposal allowing the opening of casinos in all the Italian 5 stars hotels.
Presently casinos can be found located in Italy only in Venice, Sanremo, Saint Vincent and Campione d'Italia. Italian criminal laws prohibit the opening of any other casino. On the contrary, if the proposal drafted by Ms. Brambilla is approved, there could be 26 casinos just in the city of Rome.
On one hand this is a very good news for gaming operators since as a consequence of the number of games that are expected to be launched in the next months and of this new law proposal (if approved), Italy might become a very attractive target.
On the other hand though this new measure appears to show a shift from the past position of the Italian Government. It would seem that they are paying more attention to the substantial tax proceeds deriving from the gaming sector than to the reasons of public interest and consequently of protection of citizens which were used by Italian and European courts to justify the restricted gaming license system which requires operators licensed in other EU Member States to obtain an Italian gaming license prior to the offering of their games to Italian residents despite of the EU principle of freedom to provide services.
Indeed, if Italian authorities are apparently fostering the development of the gaming sector despite of the potential harms that Italian citizens might suffer, why is an English licensed gaming website obliged to obtain an Italian license to offer its games to Italian residents? Is the exception to the applicability of the EU principle of freedom to provide services still justified? To me the reasons of public interests seem to recently hide other less noble reasons.
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Tuesday, October 13, 2009
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EGamingReview reports that the European Commission has given to the Danish Government a month to amend its draft law regulating gaming and betting websites to make it compliant with EU laws. The Danish draft law was originally submitted to the European on 7 July 2009 and the European Commission has now issued its opinion alleging that the draft law is not in line with EU law.
According to the available information, the Danish draft law prescribed, among others, the monopoly of pool betting and the introduction of measures blocking the access to websites run without a Danish gaming license as well as the blocking of the financial transactions performed by Danish residents through these websites. 
If the provisions referred above are the reasons of the negative opinion from the European Commission this measure sounds quite singular considering that the European Court of Justice has just backed the Portuguese gaming monopoly and the blocking of access to non-licensed websites is a measure implemented in Italy from 2007.
The opinion issued by the European Commission is not publicly available, but it will be interesting to see how the Danish Government will answer to such opinion. 
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Sunday, October 11, 2009
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Live poker tournaments have been recently very successful in Italy.  Italians love playing poker, but most of them cannot afford to reach every week-end one of the 4 casinos that are currently open in Italy. Consequently, poker clubs have been arranging a number of very popular poker tournaments. However, life has never been easy for poker clubs! Local police authorities were in charge of setting the rules governing such tournaments which gave rise to considerable inconsistencies between municipalities. To limit such inconsistencies, the Italian Parliament has empowered the Ministry of Home Affairs to issue the regulations governing the performance of live poker tournaments nationwide, and has also set forth the basic principles with which the Ministry shall abide in drafting the regulations. The operators entitled to run live tournaments will only be:
  • the companies holding an offline gaming license as well as
  • the companies meeting the requirements necessary to hold an online gaming license (which will be identified through a call for tenders),
following an authorization from the Italian gaming authority.
The abovementioned regulations have not been issued yet and the Ministry of Home Affairs has now decided to prohibit the performance of any live poker tournament until the new regulations will be in place. Needless to say that this measure has led to considerable complaints by operators that were looking forward to acquiring the licenses necessary to run live poker tournaments and now have to put all their short term plans on hold. Looking at the next developments will be very interesting especially because the launch of videolotteries in this  period might represent a good opportunity for gaming operators interested in setting up gaming halls offering videolotteries and poker tournaments.  
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Wednesday, October 7, 2009
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As anticipated in my previous post, I have spoken today at a very interesting conference at ENADA Roma 2009, the international fair on amusement and gaming machines.  The topic of the conference was about videolotteries (VLT) that are expected to be launched on the Italian market by the end of the year. The main comments from gaming operators and speakers was that, because of the considerable wins offered by VLT which can reach € 500,000, there will be gaming halls able to attract a number of players due to the wins promised by VLTs and to even compete with the games offered by casinos. 
Casinos are currently located in Italy only in Venice, Sanremo, Saint Vincent and Campione d'Italia and the opening of further casinos is prohibited by the law.  The business of casinos is facing a crisis which might be worsened because of the launch of VLTs. Italian players might indeed prefer to play in the gaming hall by their flat rather than driving for a thousand of KMs to reach one of the four Italian casinos. VLTs' gaming halls might become places that recall casinos also in their "look": the large offered wins might foster gaming operators to set up very elegant gaming halls with a dressing code and a selection at the entrance which might give to players the feeling of being in a casino.
Will this be the future of the Italian gaming market? we will better understand what it is happening next during the first months following the launch of VLTs in Italy..., in any case the potentialities of the VLTs appear substantial taking into account that gaming operators might also decide to install totems in gaming halls, to organize live poker tournaments and to set up betting shops...  
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Friday, October 2, 2009
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Dear Reader,
This is to inform you that I have been gently invited to speak at the ENADA Roma 2009, the international fair on amusement and gaming machines, during the round table named "VLT: Verità, Limitazioni e Tormenti" on the 7th of October at 3 pm. If any of you passes by there, please come to me to shake your hand.
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Thursday, October 1, 2009
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It happens more and more that some of my clients come to me and say "I want to launch an online contest open to users located in the US and in any European country; it will award $ XXXXXX in prizes, the Ts&Cs are those drafted by my American colleagues. Can you just implement some minor changes that you deem appropriate to comply with Italian law? And by the way, you need to find a solution to avoid to go through all the formalities required by Italian law".
The answer to this question is not straightforward in most of the cases.
Italian law on prize competitions regulates (a) contests where the prizes are awared on the basis of the mere chance or of the ability of the participants (the so called "concorsi a premi") and (b) contests where the prizes are awarded to anyone fulfills some requirements (e.g. anyone buys a product, or collects a specific number of coupons etc.) (the so called "operazioni a premio").  
Very strict formalities need to be followed in case of "concorsi a premi" open to Italian residents (even if they are open to participants of other countries as well). Indeed, the organizer of the contest shall: 
  • appoint a VAT representative in Italy if this is not an Italian company;
  • draft the Ts&Cs of the contest; 
  • post a performance or an insurance bond whose value needs to be equal to the overall value of the prizes offered;
  • send to the Ministry of the Economic Development the Ts&Cs and the performance/ insurance bond before the beginning of the contest
  • require the presence of a public notary on the selection of the winners (i.e. in case of drawing of the prizes, he will need to be present at the drawing) and on the closure of the contest (i.e. after the delivery of the prizes to the winners, he shall draft the minutes of closure of the contest).
  • send to the Ministry of the Economic Development the minutes of closure of the contest drafted by the public notary; and
  • perform the required tax payments.
Finally, it is very important to consider that Italian law prohibits any prize in cash (i.e. all the prizes need to be in kind) and any entrance fee for contests, and prescribes considerable sanctions in case of breach of the abovementioned rules. 
It appears obvious that on the basis of the legal boundaries set forth above, the organization of an online contest open to US residents and all European residents would be almost impossible. The organizer would spend more time and resources in complying with all the local laws requirements than enjoying the benefits of the contest. 
This is a relevant issue for online companies and this is the reason why the exceptions to the abovementioned rules are so important. However, the scope of the exceptions is very narrow and is subject to different interpretations by the Ministry. As a consequence online companies shall seek a casy by case review of the contests that they intend to launch. 
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