Cross-Border Gambling on the Internet

Transcription

1 Publications de l'lnstitut suisse de droit compare Veroffentlichungen des Schweizerischen Instituts fur Rechtsvergleichung Pubblicazioni dell'istituto svizzero di diritto comparato Publications of the Swiss Institute of Comparative Law 47 Cross-Border Gambling on the Internet Challenging National and International Law Research conducted by the Swiss Institute of Comparative Law with contributions by Alberto M. Aronovitz, Andrea Bonomi, Laurent Bucher, Bertil Cottier, Sofie M.F. Geeroms, Franc.ois Grize, Karen Jeanneret-Druckman, Leslie Luthi, Nicole Mathe, Beatrice Metraux, Lars Schlichting, Eva Schriever, Josef Skala and Martin Sychold Schulthess 2004 S

2 Table of Contents Beatrice Metraux Introduction Background, Parameters and Framework Background The Parameters of this Study 18 The Colloquium 18 The Work Framework 21 Exclusions 21 Constraints 21 Bibliography Historical Context The Topic in its Historical Context 22 What of Religion? 22 How Did People Gamble? 23 Where Did People Gamble? 24 Lotteries 25 The New World And Now? 27 How Big is the Market for Online Gambling? 28 Alberto M. Aronovitz Administrative Requirements to Run a Virtual Casino: The Place and Dimensions of E-Licensing General-the Path from Land-Based Casinos to Virtual Casinos Land-Based Casinos Virtual Casinos.' Attitudes Adopted by States with Respect to the Phenomenon of E-Gaming Legislative Inactivity: the Lack of Specific Regulation The Possibility of Operating E-Gaming Sites by Taking Advantage of the Absence of Express Prohibitions - General Observations Overview of Selected Jurisdictions Possibility of Operating E-Gaming Sites on the Basis of Existing Legislation which Was not Originally Conceived for this Aim - General Observations Overview of Selected Jurisdictions 41

3 3. Countries that Regulate E-Gaming: the Target of Regulation and the Linkage between Licensing and Responsible Gaming A Note on Total Prohibition Countries that Regulate E-Gaming - General Observations Overview of Selected Jurisdictions The Legal Nature of E-Gaming Licenses - General Observations Countries that Adopt a System of Quotas for Available Licenses Conditions for the Attribution of Licenses Legal Capacity: Persons and Entities Allowed to be Granted a License Commercial Corporations and Individuals Commercial Corporations Public and Charitable Organizations and Institutions Private Charitable Entities Requirements of Residence and Local Presence - General Observations <^ Overview of Selected Jurisdictions Quality of the Gaming Equipment and Reliability of the Games - General Observations Overview of Selected Jurisdictions Requirements of Probity and Fairness and Restrictions Imposed for the Licensing of Virtual Casinos - General Observations Overview of Selected Jurisdictions Cost of the Application License and Annual Fees - General Remarks Overview of Selected Jurisdictions Guarantees Required by the State to Insure the Operator's Compliance with his Obligations - General Observations Overview of Selected Jurisdictions The Authority in Charge of Granting E-Gaming Licenses - General Observations Overview of Selected Jurisdictions Settlement of Disputes Concerning the Process of Awarding the Licenses - General Observations Overview of Selected Jurisdictions The Relationship between Licensing, Control of Players and/or Player Protection - General Observations Overview of Selected Jurisdictions Withdrawal or Suspension of License - General Observations Overview of Selected Jurisdictions Conclusions 95 A. States 95 B. Operators 98 C. Service Providers 98

4 Eva Schriever Conflict and Coordination between Diverse Regulatory Environments Introduction Classification of Different Existing Legislative Models Prohibitive Systems Totally Prohibitive Jurisdictions 105 a. Characteristics 105 b. Examples Protectionist Prohibitive Systems 109 a. Definitions 109 b. Examples Liberal Systems Completely Liberal Systems 115 a. Characteristics 115 b. Examples Restrictive Liberal Jurisdictions 118 a. Definition 118 b. Examples Liberal Prohibitive Systems Characteristics Examples Concluding Remarks Coexistence of Different Systems: Selected Cross-Border Issues Prevention of Incoming Offers: "Defence Mechanisms" Prevention of Incoming Offers: Possible Subjects of Regulation Prevention of Incoming Offers: Measures against Foreign Gambling Operators and Intermediaries 126 a. Extraterritorial Applicability of National Law 127 b. Enforcement 130 c. Conclusion Prevention of Incoming Offers: Measures against Domestic Entities 132 a. Internet Service Provider 132 b. Financial Service Providers 134 c. Advertisers 135 d. Players Concluding Remarks Policy of Respect - Restriction of Outgoing Offers Conclusion 141

5 Sofie M.F. Geeroms Cross-Border Gambling on the Internet under the WTO/GATS and EC Rules Compared: A Justified Restriction on the Freedom to Provide Services? 143 General Introduction Trade in Services The International Perspective: The WTO/GATS Approach The United Nations Central Product Classification System The WTO/GATS System: Defining Trade in Services Technological Neutrality of the GATS Gambling on the Internet Qualified as a Cross-Border Supply Service A Regional Perspective: The European Community Approach The EC Treaty: Defining Services The Case Law of the European Court of Justice: Gambling Qualified as a Service 150 a) The Schindler Case of 24 March b) The Laara Case of 21 September c) The Gambelli case of 6 November Technological Neutrality of the European Community Rules 152 Conclusion Restrictions on the Freedom to Provide Services The WTO/GATS Restrictions General Principle: Progressive Liberalization of Services 154 a) Most Favoured Nation Treatment and Transparency 154 b) Market Access and National Treatment Commitments 155 c) Further Negotiations Restrictions on the Liberalization of Services 156 a) General Exceptions 156 b) Most Favoured Nation Treatment Exceptions 157 c) Sectoral Market Access and National Treatment Commitments Restrictions 157 d) Other Restrictions EC Restrictions General Principle: Freedom to Provide Services 160 a) Primary Law 160 b) The 1998 Information Society Services Directive Restrictions on the Freedom to Provide Services 162 a) Primary Law 162 b) Case Law 162 c) Secondary law 176 General Conclusion 179

6 Andrea Bonomi Litigation Arising from the Non-Payment of E-Gambling Debts Introductory Remarks Invalidity or Unenforceability of Gambling Debts General Remarks on the Notions of Invalidity and Unenforceability Unenforceability of Illegally Contracted Gambling Contracts Unenforceability of All Gambling Contracts Enforceability of Loans Made in Respect of Gambling Application of these Rules to Online Gambling Private International Law Issues General Remarks A Preliminary Question: Is the Gambling Contract a Consumer Contract? Jurisdiction in E-Gambling Cases Proceedings Brought Against the Gambler 197 a) Proceedings in the State of the Gambler 197 b) Proceedings in the State of the Plaintiff (E-Casino or Financial Institution) Proceedings Brought by the Gambler Against the E-Casino The Law Applicable to E-Gambling Contracts Law Applicable in some European States (European Union and Switzerland) 203 a) Party Autonomy 203 b) Law Applicable in the Absence of the Parties' Choice The Law Applicable in the United States 209 a) Party Autonomy 209 b) Law Applicable in the Absence of Parties' Choice Public Policy Issues Public Policy in Europe (European Union and Switzerland) Public Policy in the United States 215 a) Recognition of Judgments 215 b) Direct Litigation Conclusion on Public Policy 217 Nicole Mathe Soft Law and Alternative Dispute Resolution Introduction Soft Law-Self-Regulation Definition Conceptual Elements of Soft Law Measures 223

7 Object and Purpose Typology Which Soft Law Measures are Employed by the I-Gaming Industry? Codes of Conduct Interactive Gaming Council (IGC) Interactive Gaming, Gambling and Betting Association (iggba) Responsible Gaming Programmes Online Casinos IGC Internet Content Rating Association (ICRA) GamCare Advertising Code of Practice Alternative Dispute Resolution (ADR) and Online Dispute Resolution (ODR) General Definitions ADR ODR Three Examples of Established ADR and ODR Systems ICANN ICC Eurochambres and E-Commerce How Are ADR and ODR Used in the I-Gaming Industry? Online Casinos IGC's Seal of Approval (SOA) Programme Conclusion and Outlook 243 Martin Sychold Player Protection: Addressing the Needs of Problem Gamblers and Prudent Players Introduction - The Importance of Protecting Persons who Gamble on Internet The Perceived Importance The Actual Importance Overview of Existing Models of Player Protection Australia United States Virgin Islands Isle of Man 269

8 11 TABLE OF CONTENTS 2.4. Antigua and Barbuda Belgium Norway United Kingdom iggba/gamcare Code of Practice Non-Problem Player Protection Consumer Protection and Transparency Guarantees in the Field of Internet Gambling Data Protection Rules and the Right to Privacy Problem Gambling - Preventing and Dealing with Gambling Addiction Preventative Measures Limits to Be Placed on Internet Gambling Operators 293 A.X.I. Positive Steps to Be Taken by Internet Gambling Operators Striking Symptom of Addiction- Gambling with Borrowed Money Dealing with Gambling Addiction Treatment Services Exclusion of Gambling Addicts from Gambling Sites Preventing Children from Gambling - Age Verification Conclusions 303 Josef Skala Money Laundering and Internet Gambling: A Suspicious Affinity? Money Laundering as a Problem Definition Scope of the Problem Changing Circumstances Different Views on the Relative Vulnerability of Internet Gambling to Money Laundering Money Laundering as an Internet-Related Phenomenon The Viewpoint of Law Enforcement The Viewpoint of the Gaming Industry Lack of Cases Financial Action Task Force on Money Laundering Non-Cooperative Jurisdictions Money Laundering Typologies Review of the FATF's Forty Recommendations The Revised Forty Recommendations 329

9 4. The Legal Instruments Presently in Place International Universal Level International Regional Level Council of Europe European Union National Level Australia United Kingdom Mohawk Territory of Kahnawake Isle of Man Panama St. Kitts and Nevis Antigua The Search for Global Regulation 346 Karen Jeanneret-Druckman Taxation of E-Gaming: A Brave New World? Introduction Internet Gaming Taxation Issues are Substantially Similar to Those Raised by E-Commerce Direct (Income) Taxes Taxation of Players on Winnings; Obligations to Withhold Taxes Taxation of Business Income Jurisdiction to Tax Characterization of Income Indirect (Consumption) Taxes The U.S. Approach The Internet Tax Freedom Act Nexus The European Approach The New EU Directive Is a New Type of Taxation Required? No New Theoretical Approach Required Globalization Raises Issues that Will be Difficult but Important to Resolve Conclusion 372

10 13 TABLE OF CONTENTS Lars Schlichting Gambling Online, the Swiss Experience Introduction The Prohibition of Use of Electronic Communication Network for the Exploitation of Games of Chance Infringements under the Federal Casino Act of Section 55 of the FGA Section 56 of the FGA The Application of FGA Sections 55 and 56 for the Concretisation of the Prohibition of the Use of Internet Networks The Territorial Element The Procedure in the Event of Infringement Criminial Liabilities Operators of Online Casinos Owners of Online Casinos Users Providers The Hosting Providers Access Providers Client Service (or "Helpdesk") Marketing Companies Handling Transactions Banks and Credit Cards Links to Online Casinos Games of Skill on the Net Conclusion 386 Leslie Luthi, Frangois Grize, Laurent Bucher Technical Devices Available to National Regulators and International Operators Client - Server Concept 391 Uniform Resource Locator (URL) Information Processing on the Internet 392 Domain Name System (DNS) Geographical Location 393 Dynamic Allocation of Addresses 394 Some Other Problems about Geographical Location 394

11 4. Anonymity of Gamblers 395 Verification of Identity 395 Verification of Age Filtering Techniques 396 Packet Filtering 396 Content-Based Filtering 398 Detection-Response Filtering 399 General Summary on Filters Control Gambling Using Financial Transactions Controlling Game Equity 401 Program Checks 402 Accounting Checks Conclusion Bibliography 403 Bertil Cottier Postscript: From Internet Gaming Law to Cyberspace Law E-Gaming: An Incomplete Legal Framework The Reasons Behind Legislative Inertia Online Gaming Law: Still in the "Wait and See" Phase The International Dimension The Solution to the Conflict between Liberals and Protectionists The Solution to the Conflict between Liberals and Prohibitionists 413 Index 415