Will Lithuania s Gaming Law amendments give rise to the supervision of online gambling?

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1 Will Lithuania s Gaming Law amendments give rise to the supervision of online gambling? Eastern European Gaming Summit Sofia 23 November 2015 Renata Beržanskienė, partner

2 Upcoming amendments to Lithuania s Gaming Law Lithuania s Gaming Law came into force on 17 May Amendments to Lithuania s Gaming Law will come into force on 1 January Upcoming changes include provisions regarding: licensing; procedural matters; promotion of gambling; gambling establishments; supervision of gambling organisers; etc. The most important changes in the new Law are related to online gambling. 2

3 Online Gambling Current legislation includes no provisions regarding online gambling. Technically, online gambling is currently illegal. Nevertheless, it is organised in Lithuania. Outdated law results in a loss of tax revenue and damage suffered by the online gambling community due to lack of stability and transparency. The new Law is supposed to fix these issues, but upcoming regulation may be affected by unnecessary limits. 3

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8 Upcoming restrictions Future provisions limiting the organisation of online gambling: Requirement for a branch office in Lithuania. Minimum paid share capital requirement. Requirement to open a certain number of real-life gambling establishments in Lithuania. 8

9 Upcoming restrictions/2 Companies that wish to engage in online gambling activities will have to establish: 1 gambling house or 5 betting terminals for horse racing or 10 machine parlours or 20 betting shops or 20 totalisator shops. 9

10 Upcoming restrictions/3 Companies will have to have a minimum paid share capital of EUR 1,158,000. Foreign entities will also have to raise their minimum paid share capital to the required amount, even if the country of origin has not established any requirement for a minimum paid share capital. Companies will have to either invest in government bonds or hold in bank (or at the company) a fixed amount of at least EUR 72,400 for the sole purpose of paying out online gambling winnings. 10

11 Supervision The new Law expands the rights given to the supervisory body ie, the Gaming Control Authority ( With the introduction of online gambling, the amendments will give authority to the supervisory body concerning online gambling, issuing of permits for organising online gambling, etc. The main change regarding the supervision is a right given to the supervisory body to order Internet service providers to block access to illegal gambling sites. 11

12 Promotion of gambling According to the present gambling law, it is prohibited to advertise gambling, except for certain specified gambling-related information, such as the names of companies organising online gambling. The amendments introduce a new prohibition it will be illegal to make gifts to players after they participate in gambling activities. Another new rule is that it will be unlawful to organise contests, lotteries, trial bets and other activities outside gambling houses or outside the organiser s webpage. 12

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14 Fighting addiction Amendments dedicated to fighting the negative effects of gambling include: Gambling organisers are obligated to put up signs warning players or visitors about the addictive nature of gambling and informing them about the legal gambling age. Players can ask gambling organisers to limit their participation in online gambling activities, eg to limit the maximum amount that the player who made the request can bet. Players participating in online gambling always have to get clear information about the time they have played, their betting amounts and their gambling results. 14

15 Gambling content Amendments introduce rules on gambling content: It is prohibited to organise betting on events that are contrary to good faith, public order or are unlawful. It is prohibited to organise betting on events that have no chance to happen. Gambling organisers can be held liable for breaking these rules. 15

16 Summary If correctly implemented and interpreted, it will be a step in the right direction. More tax revenue will be generated. Requirements may be interpreted as too limiting. Some provisions, such as the requirement to open real-life establishments to organise online gambling, may be contrary to the fundamental law and EU law principles. 16

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18 Thank you! Renata Beržanskienė ESTONIA Pärnu mnt Tallinn phone estonia@sorainen.com LATVIA Kr. Valdemāra iela 21 LV-1010 Riga phone latvia@sorainen.com LITHUANIA Jogailos 4 LT Vilnius phone lithuania@sorainen.com BELARUS ul Nemiga Minsk phone belarus@sorainen.com 18