Betting-Law-News Edition 02/05

Transcription

1 1. Real Madrid v. Betting Agencies - Part Aspirations expected from the Gambling Industry: the Final Decision of the WTO was reached on the 7th of April Just one Mega-Casino! Will Gambling Houses be subject to VAT from May 2005?... 7 A Service provided by: Hambach & Hambach Law Firm Haimhauserstr. 1 D Munich, Germany Tel.: Fax: info@ra-hambach.com Hambach & Hambach Law Firm Page 1 / 8

2 1. Real Madrid v. Betting Agencies - Part 2 Are Online Bookmakers allowed to use Photos of Football Stars on their Internet Sites? A Report by Attorney at Law Dr. Wulf Hambach Munich, 13/4/2005. In our last edition of Betting-Law-News, we reported on the claims which were lodged by Real Madrid against European online bookmakers alleging unauthorised publication of photos of the football stars. As reported, photos of public persons (Personen der Zeitgeschichte), such as e.g., football stars from Real Madrid, may not, without contractual agreement, be used for external tangible aims, i.e., in particular, advertising, because of their general personal rights. The question is where the line between legal and illegal publication of photos of absolute public persons, i.e., the Real Stars, is to be drawn. In answering this question, it is necessary to take a look at the relevant jurisprudence as the legal area of general personal rights is not regulated in legislation but has been developed by the judicature. A 1995 case is of further help here: In a decision (Decision of the 29/06/ O 67/95) which dealt with an unauthorised use of a photo for a TAZ (German newspaper) advertisement, the District Court of Berlin (Landgericht Berlin) stated the following: ( ) consideration of the balance between, on the one hand, the publication s interests and on the other the importance of protecting personal rights must take place. A public picture in the sense of Art. 23 of the KUG (German Artistic Copyright Act) does not in any way exist if pictures of public persons are used for advertising aims. Despite an additional commercial use of a picture it may, however, be covered by the freedom of publication guarantee as the picture contains so much information to which the general public have an interest. In this very well reasoned decision, the court went on to say that picture information which is not protected would include, in particular, where the person concerned is portrayed or photographed as part of a typical activity for him. In my opinion, pictures of football stars can therefore be displayed, in particular, where such a picture originates from a football game, i.e., as part of a typical (as work-related) activity for these football stars. Of course, prior to this, the individual photo rights must be clarified with the photographer. In my opinion, it is however, not possible that a football club such as e.g., Real Madrid may admonish international bookmakers because they display photos of football stars which portray the stars carrying out their work activities the football games. It would certainly be a different story if portraits of these stars were used. If the individually affected bookmakers have not displayed any portrait photos of the football stars but only scenes from football games in photo format, then Real Madrid will, for once, not be able to book a victory Hambach & Hambach Law Firm Page 2 / 8

3 2. Aspirations expected from the Gambling Industry: the Final Decision of the WTO was reached on the 7th of April 2005 A Decision without a real Winner? A Report by Attorney at Law Dr. Wulf Hambach Munich, 13/4/2005. On the 7 th of April 2005, the WTO reached the final decision in the online gambling dispute between the USA and the island state of Antigua and Barbuda, regarding whether the USA must liberalise its restrictive legislation in the gambling area and make its market accessible to foreign firms as well. (Decision of the 7 th of April 2005) Both parties see themselves as winners. Why? Following this decision, the USA must also foreign providers who offer their services online and, for example, are resident in Antigua, access to the legal area of gambling. So, for example, up to now, horse races could only be betted on online if the company was established in the USA. In favour of the island state, the WTO decided that the US prohibitive regulation was discriminatory under the global trade regulations and was therefore impermissible. Nevertheless this is why the USA regards itself as the winner the WTO recognised that the retention of the existing laws can be justified on the basis of public morals even where the contents must be more detailed and must satisfy the requirement for equal treatment of US and foreign citizens. The WTO has now followed the trend set by the ECJ of disallowing the 25 Member States of the EU from discriminating against private gambling providers. What does this decision mean for the US gambling market now? It is without doubt that the USA is under immense decision pressure as one of the booming gambling markets. The USA should based on this decision now define regulations which no longer discriminate against foreign providers (in comparison with those from the USA). On the one hand, they must redefine their moral boundaries, on the other hand must leave the inland gambling branch with enough room to breath in the new rules. How quickly the USA will create the modified regulation is therefore questionable. The USA are bound by the WTO Decision to amend the impugned regulations within an appropriate period of time (normally up to 15 months) and to bring them into conformity with the General Agreement in Trade and Services GATS. Subsequently, should the WTO Decision not be implemented, the winning party may make an application for a decision on trade sanctions (see WTO Understanding on rules and procedures governing the settlement of disputes ; Annex 2 of the WTO Agreement, Art. 22). How realistic such an application for the imposition of sanctions against the USA is, is highly questionable. In any case, it is certain that the USA will be given clear instructions to draft regulations and not to sit out the case Hambach & Hambach Law Firm Page 3 / 8

4 At the same time, foreign online gambling providers are also expected to ensure the that US guidelines in relation to consumer protection are adhered to; to prevent the use of their services from being used for money laundering, fraud etc. and to prevent use of their services by under-age players. It would be worth wishing that the USA would base their new regulations on British standards. From the Betting Nation, there is a new development to report on 2005 Hambach & Hambach Law Firm Page 4 / 8

5 3. Just one Mega-Casino! The UK Gambling Bill gets through the House of Lords A Report by Attorney at Law Dr. Wulf Hambach Munich, Following the passing of the UK Gambling Bill (U.K. Gambling Bill) by the House of Commons last year, the Bill has also survived the next greatest hurdle. After successful marathon negotiations in the House of Lords, the Bill appears to be home and dry in Great Britain. Now, it still remains for the Bill to get through Parliament. Whether this will occur before the Parliamentary elections on the 5 th of May is doubtful. A major reason for the agreement of the House of Lords to the Bill was the reduction of the originally planned 40 mega-casinos to one casino of this type. Regional casinos present a totally new concept for Great Britain and their potential immense effect on crime and gambling addiction is to be feared, said John Wittingdale, the shadow culture secretary of the Opposition. It remains open whether this will be the prototype which - if the fears do not come true could be followed by even more regional casinos. One thing is certain: The huge US casino providers (e.g., Harrah s and MGM Mirage) must, for the time being, put their plans to establish their own casinos in Great Britain as well, on hold. The debate on the drafting of this Bill started four years ago and lead to a 218 page official body of rules which mainly provides for the creation of a Gambling Commission to monitor the Betting and Gambling Industry. The Bill should also have an effect in the online area; Part 1, Principal Concepts, Sec. 4, covers remote gambling which encompasses all partaking in games with the aid of telecommunication (Internet, telephone, radio, etc.). Whether an organiser of profit-based games is subject to penal sanctions should generally depend on Part 3 General Offences Sec. 30, i.e., whether a part of the facilities which are used to organise gambling (registration devices, advertisement, payment devices) is located in the United Kingdom. There are of course some exceptions to this which are to be examined on a case by case basis. Tax amendments are not to be found in the Gambling Bill. It can be assumed from the drastic lowering of the tax rate for gaming tax in the past that at least the current level will be retained. The British Tax Exchequer, with a yearly tax revenue of 1.3 billion Pounds [2004] will certainly want to avoid the migration of organisers (as has happened in the past). As the gambling industry in Germany is predominantly being decided on by the judicature and is on the verge of liberalisation at least the sports betting market it would be worth the while of the German politicians to take a look across the British Channel at their British colleagues. It is simple to ban the private gambling industry. It is in itself a challenge to 2005 Hambach & Hambach Law Firm Page 5 / 8

6 regulate this huge economic market sector with a balanced legislative framework and to provide for consumer protection Hambach & Hambach Law Firm Page 6 / 8

7 4. Will Gambling Houses be subject to VAT from May 2005? The Federal Minister of Finance now wants to collect VAT from the State Gambling Houses as well A Report by Attorney at Law Dr. Wulf Hambach Munich, 13/4/2005. As was made known today, the Federal Minister of Finance intends to present a draft bill (Referentenentwurf) which provides that the gambling houses must pay VAT from next month onwards and this in addition to their taxes to the individual federal states. The background to the additional charge is as follows: In a decision of the 17 th of February 2005 (Case no. C-443/02 and C-462/02) the ECJ determined that the national provisions which render only the operation of public gambling houses tax free and not the operation of games of chance or gaming machines, is in breach of Art. 13 Sec. B Lit. f of 6. EC-Directive (6. VAT Directive), i.e., in breach of EC Law. In addition, the ECJ decided that this directive was of direct effect and that, therefore, the relief could be directly relied on by an organiser or operator of gambling and gaming machines. The above mentioned draft bill was planned to ensure the equal treatment of all gambling operators. In order that this actually satisfies EC requirements, it is not only the freedom from taxation which has to be removed for public gambling houses (Art. 4 No. 9 Lit. b of the VAT Act, UStG) rather the game charges for all gambling operators must be standardised. In the draft, it is stated as follows (under II. Besonderer Teil zu Artikel I, (Particulars relating to Article 1) final paragraph): The revenue of the legitimate public gambling houses which to date has been tax free will, in the future, be subject to VAT. An economic charge to the gambling houses could be worked against by passing this VAT onto the final consumer or lowering the state gambling house charges. How far the states will be voluntarily prepared to miss out on a portion of their gambling house charges is now highly questionable Hambach & Hambach Law Firm Page 7 / 8

8 Contact Details: Attorney at Law Dr. Wulf Hambach Hambach & Hambach Law Firm Haimhauserstr. 1 D Munich, Germany Tel: Fax: info@ra-hambach.com Hambach & Hambach Law Firm Page 8 / 8