Legal Framework of Gambling Offences

Transcription

1 Legal Framework of Gambling Offences Ph.D., Dr. Altin SHEGANI LL.M. Redian KRISTO Abstract Gambling has existed for centuries and has taken on many forms during this period. Initially, there wasn t any criminal provision regarding the concept of games of chance. For instance the Penal Code 1 of the People s Socialist Republic of Albania, in chapter X, named criminal contravention against social morality, provides for the prohibition of gambling. Therefore, the Penal Code established the unlawful character of a single subcategory of games of chance, the gambling. Obviously, this fact reflects the economic development at a given time and society as well as the technological innovations that, nowadays, influence increasingly this sector. As part of the economic sector, games of chance have experienced rapid growth in Albania in recent years. This recent phenomenon is regulated and controlled by the respective legal and institutional framework. Such regulation, based on the category of the game of chance, legitimates various forms of the respective sector, implying the unlawful character of any other form not mentioned in the law, by punishing those categories which run contrary to the legal provisions. Keywords: Games of chance, Albania, casino, internet gambling I. HISTORICAL BACKGROUND The word game comes from the Latin word «jocus» which expresses a sense of satisfaction. Games in themselves are defined as a free physical or intellectual activity in which one takes part for fun and pleasure2.the game is always conceived as a space of freedom. The history of gambling dates back to the days of the Roman Empire, when the predecessor of the modern backgammon, Ludus Duodecim Scriptorum became popular among the Roman legionnaires. It is also due to them that the game came to other European countries. 3 It was in Venice, that in 1638 the first gambling house Ridoto was opened. It was sanctioned by the government aiming to control gambling activity of the citizens. Although the admission to the gambling house was free, only rich people could afford to play there, because the stakes were high. The games played were Biribi resembling lottery and baseta. In 1774 "Ridotto" was closed which resulted in the growth of popularity of the closed gambling clubs. These clubs were called 'casinos', so the word casino itself is of Italian origin. 4 In China and in Egypt, games can be traced back in the year 200 BC (before Christ), founded in many forms. At that time, there were two categories of games, on the one hand, games of chance and on the other games that relied only on human physical or intellectual abilities. The word Coincidence comes from the Arabic word «al-zahr» signifiant : «dés». In France, they were called the "casa" or "casini." These institutions were premises real gambling houses where visitors could play table games, card games or games drawing. In France, the approach was different. It was not until 1717 that an order would prohibit gaming establishments on French territory and in its colonies. At that time, the games were stigmatized with debt, alcohol or even to libertinism. Napoleon, in 1804, decided to establish a formal undertaking in order to limit the illegal games. This was the first appearance of French Casino. In 1806 appears the first regulation on games of chance. According to the regulation, a simple decree would issue, permit s exemptions for resorts and "to places where there are mineral waters during the open water season and one for the City of Paris." In 1959, a decree clarifies that a casino must have "three distinct activities: entertainment, food and games, combined in a single direction without any of them may be leased." Texts relating to gambling in France can be summarized in one sentence: "All games and gambling are prohibited except those for which the state grant, a very definite 1 See the article 236 of Penal Code of the People s Socialist Republic of Albania of Under this article Gambling was a contravention and was punishable by a fine of one thousand Lek and re-education through labour or imprisonment till to two years. 2 See : Le petit Larousse illustré, édition 1997, botuesi, viti 3 See: Backgammon: origins and evolution at 4 See: Gambling_in_Italy at DOI: / _ GSTF

2 monopoly or temporary s authorizations dismissed ad nutum. 5 II. THE MEANING OF GAMES OF CHANCE Games of chance are a quite widespread activity moments of the criminal activity. A. Games of chance are activities, which create significant addiction to them and may gravely damage the economy of the player who, if not controlled or protected by legal provisions in force, is likely to commit violent acts against organizers or other which creates a particular addiction on the part of the players and, as such, it attracts the special attention of the scholars of law, sociology, etc. Article 197 of the Penal Code of the Republic of Albania, named Organizing unlawful games of chance (Organizing lotteries, games of chance or gambling in breach of legal provisions constitutes criminal contravention and is punishable by a fine or up to three months of imprisonment.) is the only provision that punishes the commission of an unlawful activity requiring a license. The provision in question is of a specific nature. So, regardless of qualifying organizing unlawful games of chance, gambling and lotteries as criminal contravention, it gives no explanation concerning the concepts of games of chance, gambling and lotteries, and consequently they should be understood as defined by the amended Law Number 10033, dated December 11, The law on games of chance recognizes eight categories of games of chance, which are as follows: (1) casinos; (2) electronic casinos; (3) sports bets; (4) traditional bingos; (5) television bingos; (6) national lotteries; (7) bets on track races; and (8) promotional games of chance. Each of them implies playing the game for a certain amount of money that a participating player can win or lose depending on chance factor. Any other form of games of chance, which has not been provided by the law, is unlawful. III. THE SOCIAL DANGEROUSNESS OF ORGANIZING UNLAWFUL GAMES OF CHANCE Organizing unlawful games of chance, like any other criminal offence, contains social dangerousness, which is manifested in four main players. Organizing lawful games of chance means that organizers of games of chance are entitled to keep a certain amount of turnover varying from five to ten percent. Meanwhile, in the case of black market establishments, organizers keep more than fifty percent of 5 Rapport de la Commission des Finances du Sénat : «Les jeux de hasard et d'argent en France», François Trucy, Sénateur turnover, destroying thus the real aim of games of chance, which is the entertainment of a player, and not his or her economic harm. Such a problem is encountered in casino and electronic casino categories. B. Organizing unlawful games of chance damages fair competition and is quite harmful. The taxes established by law are very high, almost reaching the limits of being affordable by the organizers of games of chance. These taxes are not based on the profit of organizers, but on the turnover and establishments carrying out games of chance as an activity. Hence, an establishment registered in the taxation bodies will find it very difficult to afford the taxes if, near it, there is another establishment that does not pay them. C. Taking into consideration the high taxes imposed on games of chance, organizing unlawful games of chance damages the state budget to a considerable extent. During January and February of the year 2010, the income coming from games of chance was equal to four hundred million Leks per month, namely, four million Euros per year. In the meantime, the real fiscal evasion in state budgeting was approximately of the same amount. D. Organizing unlawful games of chance facilitates money laundering 6. Unlike the organizers of lawful games of chance, who are much more controlled, the organizers of unlawful games of chance find it quite easy to fix the winners and then justify their dirty money. IV. THE SUBJECT OF THE CRIMINAL OFFENCE In many proceedings implying the organization of unlawful games of chance, the prosecutor s office has found it difficult to determine the subject of this criminal offence. According to the legislation in force, any anonymous company, which has been licensed to exercise games of chance as an activity, can carry out its activity through its agents all over the territory of the Republic of Albania. Most of the establishments of the licensed companies are equipped with the identification number of the taxable entity, and can be easily identified. However, another group of their establishments perform the relevant activity, but for avoiding taxation, they do not get equipped with the identification number of the taxable entity, exercising thus games of chance as an unlawful activity. The person running the unit cannot be held liable for organizing unlawful games of chance at the relevant 6 According to the law No.9917, May 19, 2008 On the Prevention of Money Laundering and Financing of Terrorism amended by law NO , March 03, 2011, Gambling, casinos and hippodromes, of any kind have to identify and verify their customers identities in case of a transaction in an amount equal to, not less than 200,000 (two hundred thousand) Lek or its equivalent in foreign currencies and have to submit a report to the responsible authority, for the cases when they know or suspect that laundering of the proceeds of crime or terrorism financing is being committed, was committed or attempted to be committed GSTF

3 premises for as long as he or she is only an employed agent of a licensed company. Owing to the term organizing unlawful games of chance used by the Criminal Code of the Republic of Albania, which envisages both administrative and criminal sanctions in cases where companies licensed to carry out games of chance as an activity commit unlawful acts; owing to the judicial economy; owing to the higher professionalism of the public administration; owing to the general principle no bis in idem, etc.; namely, owing to the reasons that have been mentioned also in this conference, it is fairer to take administrative measures toward these entities. With respect to the subject of criminal offence, another problem encountered in practice is that of the unlicensed entity, which exercises its activity in a single establishment or by using a very small number of equipments for playing games of chance. We suggest that administrative measures should be taken in cases of organizers with a small number of equipments where the equipments for playing games of chance were found, according to those who used them for personal or entertaining purposes, but not for giving profits to players. Thus, it does not suffice that the equipment used for playing games of chance fulfil the criteria to be such. Besides, it must be proved that the equipment has served for playing games of chance. V. THE MATERIAL OBJECT Organizing unlawful games of chance is performed with the help of certain equipments (mainly through instant wining slot machines, bet apparatuses or bingos), which serve to determine the win or loss of a player s money. Very often, in practice, despite starting proceedings against organizing unlawful games of chance, the state police bodies have failed to identify cases of flagrance, namely, they have simply observed that the establishments where the equipments for playing games of chance were found did not have the required legal documentation. As result, they have come to the supposed conclusion that they carry out unlawful games of chance as an activity. In many cases, the court has accepted the pretensions of the owners of the establishments where the equipments for playing games of chance were found, according to which they used them (the equipments) for personal or entertaining purposes, but not for giving profits to players. Thus, it does not suffice that the equipment used for playing games of chance fulfil the criteria to be such. Besides, it must be proved that the equipment has served for playing games of chance. VI. THE MOST WIDESPREAD FORMS OF ORGANIZING UNLAWFUL GAMES OF CHANCE, THE FINANCIAL CONSEQUENCES The most widespread form of organizing unlawful games of chance is that of electronic casino, which implies the allocation of instant wining slot machines without the required legal documentation. During the period June 2008 June 2009, around thirty percent of the electronic casinos belonged to the unlawful, organized black market. Unlawfulness has manifested itself in two forms: (1) by not declaring any apparatus in the premises, namely, the premises themselves; or (2) by declaring a number of apparatuses smaller than the real one. Actually, in Tirana city, unlawful games of chance are carried out as an activity through the use of four hundred undeclared apparatuses in around fifty establishments, causing the state budget a financial damage that amounts to sixty million new Leks per month. Worth mentioning are seven undeclared roulettes that cause the state budged a loss equal to ten million new Leke per month. Another form of organizing unlawful games of chance, which is quite spread, has to do with sports bets as well. Actually, nine companies licensed to exercise the activity of sports bets are operating in the market. However, as a matter of fact, they have merged with unlicensed companies. During the year 2009, around ten companies have operated as authentic consumers of criminal offence that is the topic of our paper. Some of them ceased to exist after successful criminal proceedings. Now there are one or two organizers unequipped with the license in the category of sports bets. Two are the ways by which the organizers of sports bets avoid taxation obligations: (1) by not declaring some of the secondary establishments where they exercise their activities; and (2) by not declaring their exact turnover figures. As concerns both cases, the fiscal evasion is calculated to be around five hundred million new Leks per month. The third form of organizing unlawful games of chance is that of organizing poker as an unlawful game of chance. The right to exercise this game of chance belongs only to an entity equipped with a casino license. Thus, now this game should be played only at Taiwan business center. Still, as a matter of fact, this game is played in more than five other public premises, as well as in many private ones, such as apartments, which cannot be traced. All of them together cause the state budged a financial damage of more than ten million new Leke per month GSTF

4 VII. THE REASONS BEHIND ORGANIZING UNLAWFUL GAMES OF CHANCE. Two are the main reasons standing behind the issue: (1) the high taxes which have increased considerably and frequently during the last four years (they increased twice within the year 2006); and (2) the criteria for being equipped with a license, which also have changed during the recent years. Hence, finding themselves under the pressure of ever changing license conditions and increasing taxes, the entities, which have carried out unlawful games of chance as an activity for years, are forced to engage in unlawful forms of activity that, in most cases, is punishable by the Criminal Code of the Republic of Albania. The achievements in the struggle against organizing unlawful games of chance have been considerable on both the administrative and criminal levels. Starting from the first quarter of the year 2009 until its end, more than one thousand of equipments for playing unlawful games of chance have been confiscated; fines amounting to a total value greater than one hundred million new Leks have been given; more than two hundred establishments of unlawful games of chance have been closed down; more than one hundred establishments have become subject to criminal proceedings; and more than one hundred criminal processes have been conducted against their organizers (during the year 2008, such figures were equal almost to zero). Unlawful games of chance have a particularity that hinders the struggle against them: the establishments carrying out unlawful games of chance as an activity are movable. They are identified as such, but at the moment of taking respective criminal or administrative measures, they can easily move to other unknown addresses, making thus impossible the execution of punishments. VIII. COMPARATIVE ANALYSIS OF THE LEGAL FRAMEWORK OF GAMBLING OFFENCES In Europe, the approaches are different. A question will arise very quickly in France but also in other countries like Italy, Spain or Portugal: criminal law it can effectively regulate abuses in gambling online and is it the response effective and appropriate? Some internet equate to a genuine area of freedom dematerialized in which everything is fast, free and accessible. For others, the Internet is a communication tool that must respect the rules of the real world. How the law could intervene? The websites were they set up their own rules, a kind of cyberégulation, or the law should it create repressive instruments to fight against abuses. More specifically, the question of the intervention of criminal law at the expense of using the criminal law has been raised 7. Legitimacy due to the intervention of law appeared on the internet with excesses such as pornography or misuse of personal data. Thus under the French criminal law, criminal offences have taken into consideration the specifics of the Internet as a place (as a tool). For instance: Article of the French Penal Code which criminalizes violent pornographic messages that violate personal dignity, applied once to the electronic 8 courier and web sites 9. In the New South Wales (NSW), initially, the playing of games of chance, and the use of gaming machines, for expectation of reward, was unlawful. Card games, roulette, gaming machines, two-up and similar gaming activities were available through the illegal casinos and private clubs. They were dominated by organized crime, and presented significant opportunities for corrupt conduct, including cheating and manipulation during the course of play as well as protection and debt-collection aided by stand-over tactics. The Acts that currently regulate gaming 10 in NSW comprise the: 1. Casino Control Act 1992 (NSW) (in conjunction with the Casino, Liquor and Gaming Control Authority Act 2007 (NSW)); 2. Gaming Machines Act 2001 (NSW) (in conjunction with the Casino, Liquor and Gaming Control Authority Act 2007 (NSW)); 3. Lotteries and Art Unions Act 1901 (NSW); 4. Public Lotteries Act 1996 (NSW); and 5. Gambling (Two-up) Act 1998 (NSW). Gaming activities authorized by these Acts are also subject to the overarching operation of the Unlawful Gambling Act 1998 (NSW) which, amongst other things, confirms that gaming activities carried out in compliance with, or under the authority of, the above Acts, are lawful. According to the Canadian Criminal Law, there are three classes of offences in relation to Gambling. Those 7 Agathe LEPAGE, Droit pénal et internet : la part de la tradition, l oeuvre de l innovation, AJ Pénal 2005 p See : Cass. crim., 3 févr. 2004, Bull. crim., n 28, Rev. science crim. 2004, p. 642, obs. Y. Mayaud 9 See : CA Paris, 13e ch., 2 avr. 2002, Comm. com. électr. 2002, comm. n 111 ; D. 2002, p. 1900, note C. Manara 10 See: Report of New South Wales Law Reform Commission, Cheating at gambling, pg 37, Sidney, August GSTF

5 offences relate Keeping a Gaming/Betting House 11,Betting and Book-Making 12 and Placing bets on behalf of others 13. Meanwhile, the New York Criminal Law provides a Section, composed by nine articles, related to gambling Offences. So, if any person knowingly advantages or profits from unlawful gambling activity, commits a misdemeanour of promoting gambling in the second degree 14, whereas a person advances or profits from unlawful gambling activity by engaging in bookmaking to the extent that he receives or accepts in any one day more than five bets totalling more than five thousand dollars; or receiving, in connection with a lottery or policy scheme or enterprise, (a) money or written records from a person other than a player whose chances or plays are represented by such money or records 15. In order to regulate the irregular gambling records, the New York Penal law provides two articles on this matter, classified as possession in the first 16 or second 17 degree, respectively when a person possesses the writing, paper, instrument or article used in the operation or promotion of a bookmaking scheme or enterprise or in the operation, promotion or playing of a lottery or policy scheme or enterprise. Furthermore, the possession of a gambling device when, every one manufactures, sells, transports, places or possesses, or conducts or negotiates any transaction affecting or designed to affect ownership, custody or use of a slot machine or any other gambling device, believing 11 The article 201 of Canadian Criminal Law provides that: Everyone who keeps a common gaming house or common betting house is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years. 12 Article 202 of Canadian Criminal Law provides that : Every one commits an offence who uses or knowingly allows a place under his control to be used for the purpose of recording or registering bets or selling a pool or imports, makes, buys, sells, rents, leases, hires or keeps, exhibits, employs or knowingly allows to be kept, exhibited or employed in any place under his control any device or apparatus for the purpose of recording or registering bets or selling a pool, or any machine or device for gambling or betting or records or registers bets or sells a pool or engages in bookmaking or pool-selling, or in the business or occupation of betting, or makes any agreement for the purchase or sale of betting or gaming privileges, or for the purchase or sale of information that is intended to assist in book-making, pool-selling or betting; 13 Placing bets on behalf of others consist when, every one places or offers or agrees to place a bet on behalf of another person for a consideration paid or to be paid by or on behalf of that other person. For further details see article 203 of Canadian Criminal Law. 14 See the article of the New York Penal Law. 15 For further details see article of New York Penal Law related to the felony of Promoting gambling in the first degree. 16 For further details see article of New York Penal Law Possession of gambling records in the first degree 17 For further details see article of New York Penal Law Possession of gambling records in the second degree that the same is to be used in the advancement of unlawful gambling activity is considered a criminal offence 18 The Italian Criminal law proclaims gambling illegal, be it organized in a public place, an open-to-public place or a private club. At the same time, according to the Italian law, there's a difference between the games of luck and games where the outcome depends on the player's skills. Sportsbetting, lotteries and some other activities fall into the category of legal and regulated gambling activities. 19 Only the State has the right to allow gambling. AAMS (Amministrazione Autonoma dei Monopoli di Stado Autonomous Administration of the State Monopolies) is granted the power to issue licenses and regulate other gambling matters. The punishment for breaking the law ranges from fines to imprisonment. 20 The Finance Act 2007 was another milestone in the regulation of gambling in Italy. It legalized card games of skill, specifying that such games should be played in the form of a tournament with the stake equal to the tournament entry fee. This automatically legalized "Texas Hold'em". Other poker games as well as video poker games based on the same rules were prohibited as being dependent wholly on pure luck. The "Communitarian" decree (February 2011) was a real breakthrough for the gambling industry in Italy. It provided a regulation for cash poker games and casino games and also anchored changes introduced in the previous version of the decree. According to the articles of the German Criminal Code, gambling in Germany is only allowed with a government permit. The establishment of a state monopoly on gambling was intended to serve the purpose of optimally averting the dangers associated with gambling 21. Legalization of gambling in the United Kingdom has largely been a 20th century development. The legalization of casinos under the 1960 Act limited the number of gaming machines in each venue to ten, although the difficulty in enforcing this led to further liberalization under the Gaming Act The 1960 Act also legalized offcourse bookmakers for betting on competitive sports events. On 18 October 2004, a Gambling Bill was introduced into 18 For further detail see the article of New York Penal Law Possession of a gambling device 19 SEE GAMBLING IN ITALY FROM WIKIPEDIA, THE FREE ENCYCLOPEDIA, 20 Gambling_in_Italy at 21 Problem gambling in Europe, challenges, prevention and interventions, Germany, Gerhard Meyer and Tobias Hayer, pg 85, Springer Science and Business Media, GSTF

6 Parliament. Act came into force on September 1, 2007 and currently, gambling in Britain is regulated by the Gambling Commission on behalf of the Department for Culture, Media and Sport (DCMS) under the aforementioned Gambling Act This Act of Parliament significantly updated gambling laws, including the introduction of a new structure of protections for children and vulnerable adults, as well as bringing the burgeoning internet gambling sector within British regulation for the first time 22. In Switzerland gambling now has a constitutional basis in the article 106 of the Swiss Federal Constitution. Switzerland s games of chance market is composed of the lottery and betting sector on the one hand and the casino sector on the other. 23 The former is governed by the Federal Lotteries and Commercial Betting Act of 1923 (Lottery Act) (Bundesgesetz über die Lotterien und die gewerbsmässigen Wetten ), and the latter by the Federal Games of Chance and Casinos Act of 1998 (Casino Act) ( Bundesgesetz über die Glücksspiele und Spielbanken ). Current legislation as it stands upholds the general prohibition on lotteries and betting. The only lotteries permitted are those supporting good causes or charitable ends. Betting is allowed at a cantonal level within certain constraints. In contrast to the Casino Act, the cantons are responsible for enforcing the Lottery Act. Primary executive authority in respect of lotteries and betting is vested in the Lotteries and Betting Section ( Sektion Lotterien und Wetten ) of the Federal Office of Justice.. The Ratification of the new Casino Act in 2000 marked an end to the decades-long embargo on casinos in Switzerland. Casinos in Switzerland are overseen by the independent Federal Casino Commission(Eidgenössische Spielbanken kommission [ESBK]), Which is also responsible for enforcing the Casino Act and its executive ordinances, Implementation of the Casino Act is specified by the Executive Ordinance to the Federal Games of Chance and Casinos Act (Casino Ordinance) ( Verordnung über Glücksspiele und Spielbanken). IX. CONCLUDING COMMENTS Depending on the existence of an efficient control of gambling, the latter will provide a plausible measure of economic welfare. Based on the development of technology, internet gambling, another category of games of chance is an expanding and increasingly international phenomenon. On of the most adequate measures in this struggle is the harmonization of legislation 24 relating to games of chance and even more the establishment of a specialized regulatory units, able to seek and undertake measures on how to regulate this sector and in particular to enforce the international collaboration between these potential controlling bodies. REFERENCES [1] Le petit Larousse illustré, édition 1997 [2] Rapport de la Commission des Finances du Sénat : «Les jeux de hasard et d'argent en France», François Trucy, Sénateur, viti, botimi [3] Agathe LEPAGE, Droit pénal et internet: la part de la tradition, l oeuvre de l innovation, AJ Pénal 2005 [4] Cass. crim., 3 févr. 2004, Bull. crim., n 28, Rev. science crim. 2004, obs. Y. Mayaud [5] CA Paris, 13e ch., 2 avr. 2002, Comm. com. électr. 2002, comm. n 111 ; D. 2002, p. 1900, note C. Manara [6] Raport of New South Wales Law Reform Commission, Cheating at gambling, Gerhard Meyer, Tobias Hayer, Mark Griffiths editor, Sidney, August [7] Canadian Criminal Law, Last amended on November 20, 2012, Published by the Minister of Justice at the following address: [8] New York Criminal Law, laws/ n.y. penal_ law_article_225_gambling_offenses _- _ [9] Penal Code of the Republic of Albania, Law Nr.7895, date [10] Penal Code of the People s Socialist Republic of Albania of [11] Law No.9917, May 19, 2008 On the Prevention of Money Laundering and Financing of Terrorism amended by law NO , March 03, 2011, [12] Gambling, Mapping the American Moral Landscape. David A. Skeel Jr. and William Stuntz, Alan Wolfe Erik C. Owens. Editors [13] Backgammon: origins and evolutio at Gambling_in_Italy at [14] Problem gambling in Europe, challenges, prevention and interventions [15] Gerhard Meyer, Tobias Hayer and Mark Griffiths editor, Sidney August \Problem gambling in Europe, challenges, prevention and interventions, Grain Britany, Mark Griffiths, pg 10, Springer Science and Business Media, Problem gambling in Europe, challenges, prevention and interventions Switzerland, Jörg Häfeli, pg 318, Springer Science and Business Media, Gambling, Mapping the American Moral Landscape. David A. Skeel Jr. and William Stuntz, Alan Wolfe Erik C. Owens. Pg 286. Editors GSTF

7 Altin Shegani, born on 13 January 1972, in Berat Albania Graduated Lawyer at the Faculty of Law of Tirana University. Awarded the Golden Medal for excellent juridical studies D.E.A. Master Degree on Criminal Law and Criminal Sciences, Bordeaux IV University - Monteskje, France Master Degree in Criminal Sciences, Faculty of Law of Tirana University, Albania Ph.D. Thesis Phenomenological, Criminal and Criminological Aspects of International Terrorism, Faculty of Law, Tirana University,Albania Ph.D. Thesis The war against terrorism - Comparative Study French-Albanian criminal laws and international criminal law. Bordeaux IV-Montesquieu University, France Head of Section of Criminal Law Department, Faculty of Law, Tirana Head of Criminal Law Department, Faculty of Law, Tirana University. Since 2012, Dean of the Faculty of Law, University of Tirana, Albania. He had participated in many scientific conferences and symposiums at national and international level concerning his area of study GSTF