Research Services. Harm Minimisation, Sports Integrity & Emerging International Practices in Online Gambling Regulation

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1 Research Services Harm Minimisation, Sports Integrity & Emerging International Practices in Online Gambling Regulation A Benchmarking Study Comparing Australia s Online Gambling Regulations to Leading International Regulated Jurisdictions

2 Contents About this benchmarking report Executive Summary Part One: Harm minimisation and player protection Is player protection addressed in the objectives of regulation? Which products and platforms are regulated? How and when are players verified? Are there any relevant player deposit limits? What self-exclusion policies are in place and is there a nationwide list? Is harm minimisation and advocating responsible gambling found in advertising policies? What do gambling prevalence studies indicate about levels of problem gambling pre and post online gambling regulation? Part Two: Sports integrity and in-play betting What initiatives are taking place to ensure sports integrity? What legislation is in place to ensure sports integrity related to gambling? What are regulatory approaches to in-play betting? Authors Laurie Korpi, Legal & Research Director Luis Gil, Senior Legal Analyst Pauline de Zeeuw, Legal & Research Manager, Europe

3 About this benchmarking report GamblingCompliance Research Services (GCRS) was commissioned by the Australian Wagering Council to conduct a regulatory benchmarking survey of international markets which have regulated online betting and gaming Denmark, France, Italy, Spain and the United Kingdom and Australia. As part of this exercise GCRS conducted research following two themes: harm minimisation and player protection; and in-play betting and sports integrity. Reflecting these two research themes, the report analysed the following questions: Harm minimisation and player protection: * Is player protection addressed in the objectives of regulation? * Which products and platforms are regulated? * How and when are players verified? * What are any relevant player deposit limits? * What self-exclusion policies are in place and is there a nationwide list? * Is harm minimisation and advocating responsible gambling found in advertising policies? * What do gambling prevalence studies indicate about levels of problem gambling pre and post online gambling regulation? Sports integrity and in-play betting: * What initiatives are taking place to ensure sports integrity? * What legislation is in place to ensure sports integrity related to gambling? * What are regulatory approaches to in-play betting? Primary Sources: Direct extracts from laws, regulations, codes, technical standards or other primary sources are included throughout this report, with large extracts highlighted in green. Further references are located in this report s footnotes. Results: The results of this research are contained in the following two chapters, with commentary and findings summed up in this report s executive summary. Contact: Should you have any questions, please contact research@gamblingcompliance.com Use of this information In preparing this report, GamblingCompliance Ltd has made every effort to ensure the accuracy of its contents. However, no representation or warranty, express or implied, is given as to the accuracy or completeness of its information. All conclusions reached are based on an independent and impartial analysis of the topics covered based on GamblingCompliance Ltd s regulatory database of reports and analysis, conferences attended and, where relevant, interviews conducted. The views and opinions expressed in this report are not necessarily those of Gambling Compliance Ltd, but of the individual authors of this report. Readers, or their associated corporate entity, that rely on any information in this report do so entirely at their own risk. GamblingCompliance Ltd and its employees do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this report. This report is no substitute for local legal advice in each jurisdiction covered. Before acting or refraining to act on any information you read in this report, it is strongly recommended that you obtain independent legal advice. Copyright 2014 GamblingCompliance Ltd All rights reserved. The intended use of this report is for purchasers only. No part of this report may be: (i) copied, photocopied or duplicated in any form by any means; or (ii) redistributed or republished without the prior written consent of GamblingCompliance Ltd Terms and conditions can be found at terms-and-conditions. 3

4 Executive Summary Through the Interactive Gambling Act 2001 (IGA) Australia was among the first jurisdictions in the world to express a policy position on online gambling. A key policy driver was consumer protection as it was thought that the quantum leap in the accessibility of gambling services...could exacerbate problem gambling in Australia. The IGA prohibited most forms of online gambling from being provided to Australians, however, the IGA did not restrict Australians from accessing unregulated, black market online gambling. The key exception to the prohibitions in the IGA is online wagering service providers who are licensed by state and territory regulators. However, not all forms of online wagering are permitted, with most forms of online in-play sports betting still included among the IGA s prohibitions. Since Australia enacted the IGA, online gambling regulation has received increased policy consideration internationally, particularly across Europe, with many European jurisdictions choosing to install licensing models for a broad range of online gambling activities. There is, therefore, a growing body of regulatory experience and know-how to draw upon to frame key regulatory questions and understand any emerging common practices. This is what this benchmarking research has sought to do, asking a number of questions regarding harm minimisation and player protection on the one hand, and sports integrity and in-play betting on the other, for both Australia and a number of international (European) markets. In short, this research identifies a strong case for an updating and enhancement of Australia s regulatory approach to achieve international best practice public policy outcomes in each of these areas. This includes approaches to player verification, deposit limits, self-exclusion, and the issue of platform/ regulatory neutrality and its relationship to both consumer protection and sports integrity. While the in-depth results of this research are contained in the body of this report, with legislative extracts and references, the benchmarking study s results can be grouped into the follow common practices and key themes. Common Practices The research contained in this report can be organised into a number of common practices which are shared among the majority (but not all) of the jurisdictions analysed. While Table One below contains a snapshot of the harm minimisation and player protection research findings as well as the research findings related to sports integrity and in-play betting, the following statements on common practices and policy positions are made based on the benchmarking exercise conducted in Parts One and Two of this report. Regulation: jurisdictions are increasingly regulating the supply of online gambling in addition to providing a legal, competitive alternative for players to access. Platform: platform neutrality is a common feature of most regulatory frameworks. Verification: jurisdictions do not permit withdrawals until verification is complete, with verification commonly completed within a matter of days, if not hours or at the time of registration. Deposit limits: jurisdictions require players be given the ability to set their own limits. It is common practice that any increase in a limit is subject to a cooling-off period, whereas decreases in limits take effect immediately. Self-exclusion: jurisdictions require players be given the opportunity to self-exclude, with a national self-exclusion register in place (or moves to implement one) across most jurisdictions, so that a player excluded on one website cannot sign-up with another operator. Marketing: it is common practice for jurisdictions to require responsible gambling messaging, including a commitment not to target minors or the vulnerable, across all marketing and promotions. Sports integrity: most jurisdictions have regulated their online betting markets to encompass a wide range of betting offers, including in-play betting, which would provide legal alternatives to black market betting. This policy approach also provides traceable, transparent betting data, an essential component in successful sports integrity monitoring systems, as well as evidence to enforce sports integrity laws. Themes There are a number of key themes that underpin the regulatory regimes that are described in this report. They are as follows: Restricting Supply, Regulating Demand Internationally, jurisdictions are regulating both the supply and demand for online gambling by restricting access to a market for unlicensed operators, while providing a licensed and legal alternative. In the European context, restricting the access to, and the supply of, online gambling services, to licensed operators has been termed channelling, with regulation seeking to channel players from illegal websites to the regulated market. This is the case for both federally-governed jurisdictions, such as Spain, and unitary governments, such as France. In comparison, Australia s Interactive Gambling Act 2001 simply restricts the supply of online gambling services. Platform Neutrality All the jurisdictions studied have similar policy objectives, with harm minimisation and consumer protection uniformly found at the core of gambling regulation as policy drivers. However, while these international markets have enacted regulations which are applied uniformly across channels to meet their policy objectives, Australian policy is not so consistent. International markets have created online regulatory regimes which are platform neutral and therefore do not discriminate whether a player accesses online services via a computer, tablet or over a telephone. This has resulted in having the same gambling product regulated uniformly and consistently across access channels and subject to the same rules and consumer protections. For instance, a UK player can place an in-play bet in person at a land-based betting shop, over a smartphone, or using a telephone and therefore will be subject to the same protections 4

5 found in the UK s gambling regime, including licence conditions and codes of conduct operators are required to uphold. Australia s policy approach is somewhat different, with the IGA excluding certain services from its scope. Using the same example, an Australian player will be able to place an in-play bet on a horse race online, but not a football match, and can place in-play bets over a telephone call or at a land-based venue, but not online for sporting events. Harm Minimisation Much of the benchmarking indices looked at harm minimisation measures. Table 1 on Page 6 summarises the key findings of the benchmarking exercise in this respect. As can be seen, most jurisdictions have implemented similar harm minimisation requirements. However, Australia has substantially longer verification time period requirements, does not have a comprehensive approach to deposit limits and lacks a nationwide self-exclusion register. Attractive, Competitive Products Of the international markets analysed, the product suites permitted to be offered by licensed operators are much broader than the limited exceptions carved out under the IGA available to Australian operators. These international markets permit their operators to provide most forms of online gambling (with the exception of France), with all markets permitting in-play betting. The concept of channelling, which most European markets use as a means to restrict supply of gambling services, also provides justification for permitting licensed operators to compete with black market offers through competitive and similar products suites, in order to not be put at a competitive disadvantage to unlicensed operators. A Danish Ministry of Taxation memorandum to the Danish Parliament summed up the rational for this by stating that the gambling products should be so attractive that players do not want to gamble on sites of foreign (illegal) operators. Gambling Prevalence A concern which underpinned the formulation of the IGA was that interactive gambling represents a quantum leap in the accessibility of gambling services, and could exacerbate problem gambling in Australia. Of the international markets studied, the UK provides an evidence-based case study into the effects of online gambling regulation on problem gambling rates. This is because the UK conducted studies of its population s gambling prevalence well before online gambling regulation was enacted, and additional studies post regulation. The UK s experience suggests that the introduction of online gambling has not exacerbated problem gambling. Sports Integrity Both internationally and in Australia, there has been a raft of initiatives at both the regional and country levels to fight against match-fixing and related sports manipulation threats. While Europe is working on a convention which will address sports integrity, Australia already has issued a nationwide policy to ensure a consistent approach to sports integrity. Moreover, Australia s approach, coordinated through its National Policy on Match-Fixing in Sport, is proving influential, with New Zealand recently following a similar model. This echoes the development of a so-called right to bet, which was first introduced by Victoria and has been subsequently followed in other jurisdictions, including France, which is one of the international markets under focus. In-Play Betting The results of the benchmarking exercise in Part Two of this research indicate that all the international jurisdictions studied permit their licensees to offer forms of in-play betting online. Australia s approach to in-play betting is an anomaly compared to the other jurisdictions benchmarked, as whether or not in-play betting is permitted is dependent on the type of event and the platform used to place the bet. One consequence of this inconsistent regulatory approach in Australia is that it risks driving Australian players to seek out black market online betting sites, which offer a more attractive range of betting products compared with those available on the regulated market. Table One below also summarises these findings in the in-play betting column. Match-Fixing and Regulated Betting Markets The opportunity to bet on variables in sporting events and inplay betting has given rise to concerns that sporting events can be manipulated for match-fixing purposes. European experience suggests that regulated betting markets, far from being a threat to sports integrity, are a key bulwark in efforts to combat matchfixing. This is because regulated markets provide for a range of sports integrity measures to be in place. One of these measures is monitoring systems which are a key area of cooperation between sports governing bodies and regulated betting operators. The key to the success of monitoring systems is regulated betting markets which can analyse betting data and alert sports governing bodies and the authorities of any suspicious betting patterns. For unregulated markets and unregulated betting offers, data from unlicensed operators will not be available and therefore constitute a threat to both the success of monitoring systems specifically and sports integrity more generally. Although Australia has been a leader in many respects in combating match-fixing, it is an outlier, compared with the international jurisdictions analysed, as its suite of regulated online betting offers does not match up to those offered by unlicensed operators acting on an unregulated market. Specifically, in-play betting, which this research shows is growing substantially in Europe s regulated markets (one operator saw in-play business grow by 1,400 percent between ), could pose a threat if left available to be offered by unlicensed operators, with no legal and regulated alternative on the online Australian market. By bringing online in-play betting into the regulated market, information sharing and monitoring systems will gather data and any suspicious betting patterns or other related sports integrity threats can be illuminated for authorities to act upon. There will also be other benefits in terms of consumer protection, harm minimisation and revenue to government. 5

6 Research findings: a snapshot Jurisdiction Denmark France Italy Spain United Kingdom National legislation restricting supply of online gambling National legislation regulating demand for online gambling National legislation platform neutral Player verification time limits Player verification and withdrawals Deposit limits Australia a a a a a a a a a a a X a a a a a X At time of account opening (immediately). Verification at account opening, no withdrawals are possible until verification complete. Yes, daily, weekly and monthly voluntary deposit limits can be set by players. A request to set a limit should be implemented immediately, with requests to increase limits subject to a 24-hour cooling-off period. Temporary account setup initiates a postal identification procedure. Must be completed within one month. No withdrawals until verification complete. Mandatory win limits must be set when registering account. Any amount won above this limit must be credited to the player s bank account. Must be completed within 30 days of account opening. No withdrawals until verification complete. Deposit limits must be set by players, with players prohibited from having an unlimited deposit limit. Any increase in these self-imposed limits will be subject to a cooling-off period of seven days with any decrease to be implemented immediately. Verification required to be completed in real-time or within three days. No withdrawals until verification complete. Players are required to be offered voluntary deposit limits. Operators must limit deposits to 600 per day; 1,500 per week; and 3,000 per month. Increases or removal of deposit limits require a player to pass a gambling addiction test. If the request is a second or subsequent request, player gaming records must be analysed, with requests only permitted once every three months. Increases in deposit limits are subject to a cooling-off period of up to seven days. Age verification is required with 72 hours. No withdrawals until verification complete. Online gambling platforms require players to have facilities to set their own deposit limits. Increases in deposit limits require a 24- hour cooling-off period, with reductions required to be implemented within 24 hours. Verification required to be completed within 90 days. No withdrawals until verification complete. Deposit limits applicable in certain codes of practice (such as South Australia); however, implemented by industry in absence of requirement found in gambling law. Self-exclusion a a a a a a facilities 6

7 Jurisdiction Denmark France Italy Spain United Kingdom Nationwide selfexclusion a a list Responsible gambling and advertising requirements National selfexclusion system currently under development a National self-exclusion system currently under development Australia a a a a a In-play betting a a a a a X online permitted X 7

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9 Part One: Harm Minimisation and Player Protection 9

10 1. Is player protection addressed in the objectives of regulation? 1.1. Denmark Yes. Legislation for Denmark s online gambling market is based in the Gambling Act 2010, with its first licences operational from January According to Section 1 of the Gambling Act 2010, the purpose of the act is to: i) To maintain the consumption of gambling services at a moderate level; ii) to protect young people and other vulnerable people from being exploited through gambling or developing a gambling addiction; iii) to protect players by ensuring that gambling is provided in a fair, responsible and transparent manner; and iv) to ensure public order and to prevent gambling as a means to support crime France Yes. The French National Assembly approved a law introducing an ouverture controlee, or controlled opening, of the country s online gambling market on April 6, The law set up a licensing regime for online gambling, with licensees active from late The main objective of the law was to channel players from unlicensed gambling websites to websites regulated by French authorities. Section 3 of the Online Gambling Act 2010 noted that the objectives of the law were to protect players and minors, including preventing excessive or pathological gambling; fight against fraud and crime, including money laundering; ensure the integrity and reliability of gambling; and ensure a balanced and equitable development of the sector. The concept of channelling players to regulated gambling services has received attention from the Court of Justice of the European Union. The court has consistently ruled in favour of channelling and the right to offer competitive products and a certain level of marketing to meet this channelling objective: Authorised operators must represent a reliable, but at the same time attractive, alternative to a prohibited activity. This may as such necessitate the offer of an extensive range of games, advertising on a certain scale and the use of new distribution techniques (see Placanica and Others, paragraph 55) Italy Yes. Italy was the first jurisdiction in Europe to implement a point of consumption or local licensing regime for online gambling, beginning in Italy s objective, as stated in Article 38 of Decree 223/2006 (the Bersani Decree), for regulating online gambling was to combat illegal online gambling offers and related tax evasion, as well as ensuring player protection through a regulated market Spain Yes. Spain has federal regulation for online gambling, in addition to autonomous regions having the authority to regulate the activity. At the federal level, online gambling is regulated by Law 13/2011. Article 1 of the law states that the main purpose of the regulation is as follows: The purpose of this Law is to regulate gaming activities, in their different forms, developed within the scope of the State in order to guarantee the protection of public order, as well as to fight against fraud, prevent addictive behaviour, protect the rights of minors and safeguard the rights of whoever participates in the games United Kingdom Yes. The United Kingdom first regulated online gambling through the Gambling Act 2005, which came into force in September The three pillars of the act, forming the licensing objectives for regulating gambling, are found in Section 1 of the Gambling Act 2005, as follows: In this act a reference to the licensing objectives is a reference to the objectives of: (a) preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime, (b) ensuring that gambling is conducted in a fair and open way, and (c) protecting children and other vulnerable persons from being harmed or exploited by gambling. The UK currently follows the same model as most other European countries, and will require online gambling operators to hold a local licence from October 1, This is being achieved through changes to the Gambling Act 2005, in the form of amending legislation (the Gambling (Licensing and Advertising) Act 2014 and secondary legislation (Gambling (Licensing and Advertising) Act 2014 (Transitional Provisions) Order 2014) Australia Yes. Federally, Australia s Interactive Gambling Act 2001 (IGA) was enacted to, according to the Act s explanatory memorandum, to address a: Concern that interactive gambling represents a quantum leap in the accessibility of gambling services, and could exacerbate problem gambling in Australia. Moreover, the IGA, through prohibitions and a complaints scheme, created a framework which sought to, according to the explanatory memorandum: Limit the development of this newly emerging industry [interactive gambling] and minimise the scope for problem gambling among Australians. It balances the protection of Australians with a sensible and enforceable regulatory regime. 1 Joined cases C-316/07, C-358/07 to C-360/07, C-409/07 and C-410/07 Markus Stoß and Others, Court of Justice of the European Union, September 8, 2010 at paragraph

11 2. Which products and platforms are regulated? 2.1. Denmark According to Section 5 of the Act on Gambling, online gambling is defined as gambling activities between a player and a gambling provider through the use of remote communication. This has resulted in a broad array of games on the regulated market, with licences available for online betting and online casino games, while online lotteries and horse race betting remain subject to a monopoly held by Danske Spil. The definition of online gambling requiring the use of remote communication has meant the law is platform neutral and therefore could encompass accessing gambling services from a desktop computer, smartphone, tablet, or even telephone betting. The Danish Ministry of Taxation in a memorandum to the Danish Parliament in March 2010 provides the reasoning why that jurisdiction chose to regulate the wide range of online gambling products on its market: The gambling products should be so attractive that players do not want to gamble on sites of foreign (illegal) operators France France s Online Gambling Act 2010 in Article 10-1 defines online gambling as a game in which the player s actions in a game exclusively go through an online communication service to the public. Online gambling licences are available for sports betting (pari-mutuel or fixed-odds, although only pari-mutuel betting is permitted for horse race betting), and jeux de cercle, or shared games, which in practice means different variants of poker. Online lotteries and bingo remain under a monopoly held by Française des Jeux. France s online regime has not stipulated the type of platform the online communication takes place on, so could encompass accessing online gambling from a desktop computer, smartphone, and a tablet. Telephone betting could also be considered an online communication, and has not been expressly excluded from the scope of the law Italy Italy s online gambling framework has expanded over time, with new forms of online gambling being introduced. While Italian law does not define what online or remote gambling consists of, Article 2(r) of Decree 111/2011, which regulates fixed-odds betting on sports, provides a definition of a telematic bet. This definition encompasses bets placed from a distance and can include telephone or internet betting. In practice, Italy has licensed most forms of online gambling including: casino games; cash poker; tournament poker; bingo; lotteries; betting; betting exchanges and online gaming machines. The definition of online betting provides that online betting is platform neutral and therefore could encompass accessing gambling services from a variety of mediums. 2 European Commission Decision of on the measure No C 35/2010 (ex N302/2010) which Denmark is planning to implement in the form of Duties for Online Gaming in the Danish Gaming Duties Act, < competition/state_aid/cases/238735/238735_ _269_3.pdf>, at page Spain Spain has followed Italy s model closely and has implemented a wide range of online gambling games. According to Article 3(h) of Law 13/2011 online gambling games are defined as follows: These games use any mechanism, installation, equipment or system that makes it possible to produce, store or transmit documents, data and information, including any open or restricted network such as television, the Internet, mobile and landline telephones or any other, or interactive communication, whether it is in real or delayed time. Spain has licensed online gambling for betting (pool betting and fixed odds); poker (cash and tournament); casino games (including roulette, blackjack, baccarat) bingo; game shows; raffles; and social games. Spain is currently issuing for betting exchanges and online gaming machines. The definition of online games is platform neutral, with players able to access gambling services via a desktop computer, smartphone, tablet, or even via a telephone United Kingdom The UK has regulated online gambling regulation through the Gambling Act 2005, which came into force in September The UK originally adopted an approach which was slightly more liberal than most other European countries which have regulated online gambling, as it permitted operators not licensed in the UK to take custom from the players in Great Britain. Although the UK is currently changing its regime to require operators to hold a UK licence if the operator has remote gambling equipment in Great Britain or even transacts with a British consumer, the definition of what constitutes remote gambling has remained intact. Section 4 of the Gambling Act defines remote gambling as gambling in which persons participate by the use of remote communication. Section 3 of the Gambling Act 2005 defines gambling as: Betting, which is defined in Section 9 of the Gambling Act 2005 as the making or accepting of a bet on the outcome of a race, competition or other event or process; the likelihood of anything occurring or not occurring; or whether anything is or is not true. Gaming, which is defined in Section 6 of the Gambling Act 2005 as playing of a game of chance, which itself can include a skill element, for a prize. Participating in a lottery (as defined in Section 14 of the Gambling Act 2005). Moreover, remote communication is defined broadly in Section 4 of the Gambling Act to mean: Communication using: (a) the internet, (b)telephone, (c)television, (d)radio, or (e)any other kind of electronic or other technology for facilitating communication. The definition of remote communication therefore is platform neutral and therefore could encompass accessing gambling 11

12 services from a desktop computer, smartphone, tablet, or even telephone betting Australia The Interactive Gambling Act 2001 regulated online gambling by installing a prohibition on interactive gambling services and creating a complaint-based system to restrict the supply of online gambling services, where those services have an Australian-customer link. The types of online gambling prohibited and across what platforms these prohibitions apply vary depending on the type of gambling service and communication platform used. A brief overview of the IGA s definitions and the types of gambling services excluded from its scope is required. The IGA defines a gambling service in Section 4 as: (a) a service for the placing, making, receiving or acceptance of bets; or (b) a service the sole or dominant purpose of which is to introduce individuals who wish to make or place bets to individuals who are willing to receive or accept those bets; or (c) a service for the conduct of a lottery; or (d) a service for the supply of lottery tickets; or (e) a service for the conduct of a game, where: (i) the game is played for money or anything else of value; and (ii) the game is a game of chance or of mixed chance and skill; and (iii) a customer of the service gives or agrees to give consideration to play or enter the game; or (f) a gambling service (within the ordinary meaning of that expression) that is not covered by any of the above paragraphs. An interactive gambling service is defined in Section 5 of the IGA as: (1) For the purposes of this Act, an interactive gambling service is a gambling service, where: (a) the service is provided in the course of carrying on a business; and (b) the service is provided to customers using any of the following: (i) an internet carriage service; (ii) any other listed carriage service; (iii) a broadcasting service; (iv) any other content service; (v) a datacasting service. Note: This definition relates to the offences created by section 15 and Part 7A. (2) Subsection (1) has effect subject to subsection (3). However, the IGA excludes a number of services from within its scope. These excluded services are listed under Section 5(3) and are: For the purposes of this Act, none of the following services is an interactive gambling service: (a) a telephone betting service; (aa) an excluded wagering service (see Section 8A); (ab) an excluded gaming service (see Section 8B); (ac) a service that has a designated broadcasting link (see Section 8C); (ad) a service that has a designated datacasting link (see Section 8C); (ae) an excluded lottery service (see Section 8D); (b) a service to the extent to which it relates to the entering into of contracts that are financial products within the meaning of Chapter 7 of the Corporations Act 2001; (c) an exempt service (see Section 10). Further exemptions are included under an excluded wagering service and an excluded gaming service in the IGA. While an excluded gaming service relates to the definition of gambling service contained in Section 4 paragraph (e) of the definition of a gambling service of the IGA (which includes a game of mixed chance and skill) and an exemption of such services to the extent to which the service is provided to customers who are in a public place (such as linked jackpot poker machines in clubs); an excluded wagering service is listed in Section 8A as: 8A Excluded wagering service (1) For the purposes of this Act, an excluded wagering service is: (a) a service to the extent to which it relates to betting on, or on a series of, any or all of the following: (i) a horse race; (ii) a harness race; (iii) a greyhound race; (iv) a sporting event; (b) a service to the extent to which it relates to betting on: (i) an event; or (ii) a series of events; or (iii) a contingency; that is not covered by paragraph (a). (1A) Subsection (1) does not apply to a service unless such other conditions (if any) as are specified in the regulations have been satisfied. (2) Paragraphs (1)(a) and (b) do not apply to a service to the extent to which: (a) the service relates to betting on the outcome of a sporting event, where the bets are placed, made, received or accepted after the beginning of the event; or (b) the service relates to betting on a contingency that may or may not happen in the course of a sporting event, where the bets are placed, made, received or accepted after the beginning of the event. (3) Paragraph (1)(b) does not apply to a service to the extent to which the service is: (a) a service for the conduct of a scratch lottery or other instant lottery; or (b) a service for the supply of tickets in a scratch lottery or other instant lottery; or (c) a service relating to betting on the outcome of a scratch lottery or other instant lottery; or (d) a service for the conduct of a game covered by paragraph (e) of the definition of gambling service in section 4; or (e) a service relating to betting on the outcome of a game of chance or of mixed chance and skill. 12

13 The consequence of the IGA s definitions and scope means that most online gambling services, such as online casinos, online poker, and online gaming machines are prohibited under the IGA, while online wagering services are not prohibited to the extent that they are not in-play betting on an outcome or contingency on a sporting event after the event has begun, and certain lotteries. Moreover, the IGA differentiates between the platform for an interactive gambling service. That is, interactive gambling services do not include telephone betting services, and designated services which have a datacasting or broadcasting link. 3. How and when are players verified? 3.1. Denmark To verify a customer, Danish licensees are required to use the country s NemId system when a player wants to open an account. NemId is digital signature system, used to access both government and business website services, such as checking tax file information online and online banking. The system consists of a user ID, password and a card containing one-time access codes. According to the Technical requirements on gambling operators for obtaining a licence to provide online gambling services in Denmark Version 1.09: When a new player wants to open an account on the Licence Holder s website, the Licence Holder must check, before the account opening has been completed, the player s identity via NemId, the player s age and whether the player is registered on the Problem Gambling Register. If the player cannot log in via NemId, the player is younger than 18 years old or the player is registered on the Problem Gambling Register, a player cannot open an account. Both the online betting and online casino executive orders 3 in Section 2(4)-(6) provide the legislative base for the registration and verification of players: Paragraph 4. The licence holder shall obtain information concerning the customer s identity, including his name, address and personal ID number, or other similar information if the person in question does not have a personal ID number. The information obtained shall be verified by means of the necessary documentation. The scope of the documentation shall be determined on the basis of a risk analysis, so that the licence holder is sure that the customer is the person who the customer claims to be. Paragraph 5. The licence holder shall make registration as a customer conditional upon the customer acting exclusively on his own behalf. Paragraph 6. In the event of any doubt as to whether information obtained previously concerning the customer s identity is adequate, further proof of identity shall be requested France According to Article 3 of the Online Gambling Law 2010, French players can only set up temporary accounts on an operator s website prior to verification. To change the account from temporary to an official playing account requires the player to send the operator, via post or , identification documents to be verified, as proof of their age and identity. Article 4 of the Online Gambling Law stipulates that these documents can 3 Executive Order No. 67 of 25. January 2012 on online casinos and Executive Order No. 66 of 25 January 2012 on the provision of online betting the secondary legislation which implemented Denmark s online gambling framework. be either copies of their national ID card, passport or driving licence and need to be sent in within a month of a temporary account being opened. Once the verification papers have been sent to the operator, the operator is required to send the player an activation code by post according to Article 5 of the Online Gambling Law Until the player has been verified the player cannot cash out any winnings Italy Italian players are required to open a player account to access Italian operator s online gambling services. According to the Certification Guidance Version 1.1, the player s details for their gambling account must be verified by the gambling operator, within 30 days of opening the account. While deposits are permitted, withdrawals are not permitted until verification has been completed. The verification uses Italy s national identification number for verification purposes Spain Spanish players are required to provide operators with verification details which include their national identification number, name and date of birth, according to the Web service standards for the verification of players by gambling operators Version 1.6 December 2013 (a 130 page technical specification booklet on player verification). Once the operator has received the player s verification details the operator is required to send these to the national gambling regulator (Gambling Directorate, or the DGOJ), which is required to check the details against Spain s national population database as well as the national gambling self-exclusion database. The DGOJ is required to confirm the verification in real-time or within three days according to Article 26 of Royal Decree 1613/2011 (secondary legislation for Law 13/2011). If verification has not been conducted within one month, the player s account must be cancelled (Article 26 (3) of Royal Decree 1613/2011). The technical specification booklet furthermore stipulates that no withdrawals are permitted until verification is complete United Kingdom The UK s online gambling framework requires operators to follow established British standards with respect to the security requirements for software technical standards (an ISO standard ISO/EIC 27001: 2005). This includes a requirement for user identification and authentication. Furthermore, the Gambling Commission has stipulated Licence Conditions and Codes of Practice (LCCP) relevant for online gambling operators. LCCP social responsibility code provision aims to uphold one of the pillars of licensing namely protecting children and young persons and lays down provisions with respect to age verification and a time limit of 72 hours to verify a player s age. 13

14 A social responsibility code provision means that: compliance with these is a condition of licences; therefore any breach of them by an operator may lead the Commission to review the operator s licence with a view to suspension, revocation or the imposition of a financial penalty and would also expose the operator to the risk of prosecution. Social responsibility code provision ( Access to gambling by children and young persons ) (2)(f) states that: In the case of any UK resident customer who deposits money using any type of payment method other than a credit card, and unless the licensee has established that a third party has satisfactorily carried out age verification, the following age verification procedures: (i) verifying additional information about the customer, such as carrying out searches of credit reference and other databases that list names and addresses of individuals over the age of 18; (ii) carrying out secondary age verification checks in any circumstances which give the operator reason to suspect that the person may be underage; (iii) not permitting the customer to withdraw any winnings from their account until age verification has been satisfactorily completed; and (iv) in any event, a requirement that if age verification has not been satisfactorily completed within 72 hours of the customer applying to register to gamble and depositing money: the account will be frozen no further gambling will be permitted until age verification has been successfully completed if on completion of age verification the customer is shown to be underage, the operator must return to the customer any money paid in respect of the use of the gambling facilities, but no winnings shall be paid Australia Verification requirements for online gambling services are contained in Australia s Anti-Money Laundering and Counter- Terrorism Financing Rules Instrument 2007 (No. 1), providing relevant provisions under the Anti-Money Laundering and Counter-Terrorism Financing Act The rules apply to the types of interactive gambling referred to in 5(1)(b) of the IGA, including excluded wagering services. The rules state: Part 10.4 Accounts for online gambling services Special circumstances that justify carrying out the applicable identification procedure after commencement of the provision of a designated service Subject to the condition specified in paragraph , online gambling services are specified for the purposes of paragraph 33(a) of the AML/CTF Act For the purposes of paragraph 33(b) of the AML/CTF Act, the special circumstances in respect of online gambling services are only available if: (1) the customer is required to open an account in order to obtain the service; and (2) the reporting entity does not permit the customer to withdraw any funds from the account prior to carrying out the applicable customer identification procedure. The period ascertained in accordance with subparagraph 34(1)(d)(i) of the AML/CTF Act This Rule is made pursuant to subparagraph 34(1)(d) (i) of the AML/CTF Act. In respect of the designated services specified in paragraph above, the period is 90 days commencing on the day that the reporting entity opens the account in the name of the customer. Therefore online gambling service providers not prohibited by the IGA such as bookmakers licensed in the Northern Territory or state licensed wagering operators are required to verify customers within 90 days from account opening, with the withdrawal of funds not permitted until a customer verification process has been carried out. In practice, this has led to either online verification or paper-based verification. For verification purposes there is a requirement to have original or certified copies of supporting documents. Australia Post is used by some operators 4 to provide a 100-point check offline, with companies such as Edentiti 5 providing a similar service online. 4 Such as Centrebet 5 Such as Sportingbet. 4. Are there any relevant player deposit or win limits? 4.1. Denmark Both Denmark s Executive Order on Online Betting and Executive Order on Online Casinos contain requirements for licensees to provide players with the function to set deposit limits. These are contained in chapter 6 of both respective executive orders. The rules state in Article 15 and 17 respectively that: The licence holder must make a function available to the player that allows the player to set daily, weekly and monthly deposit limits. A player s request to set a deposit limit shall be implemented immediately upon request; but see paragraph 2. Paragraph 2. A player s request for an increase of a previously fixed deposit limit may not come into force until after 24 hours have passed France French law requires players to set mandatory win limits when registering their account with the verification code sent in the post by a gambling operator. Article 17 of the Online Gambling Law 2010 states that the player is required to set an amount, over which any winnings will be transferred back to their bank account: When entering the secret code mentioned in the first paragraph of Article 5, the operator is required to ask the player to determine an amount beyond which the available 14

15 winnings from the player account are automatically transferred to their payment account referred in paragraph 1 of Section 2. No gambling operation can be performed until the player has determined this amount. The player must be able to change this amount at any time by an easily accessible device Italy Italy s online gambling rules require limits to be in place which only players can set. According to Section of Italy s Technical Certification Guidance (which elaborates rules on deposit limits), online gambling systems must make players set their deposit limits, with the gambling system prohibited from having an unlimited deposit level. This self-imposed deposit limit is also subject to a rule which requires any increase in a player s deposit limit to take effect only after seven days from the change; however, decreases in deposit limits a required to take effect immediately. Gambling operators are prohibited from offering default limits to a player Spain According to Spain s Royal Decree 1614/2011 (a piece of secondary legislation for Law 13/2011) in Article 36, Spanish licensees are required to offer deposit limits to players. These are self-imposed limits, however, operators must limit deposits to a maximum of 600 per day; 1,500 per week and 3,000 per month according to Appendix II of Royal Decree 1614/2011. According to 36(2) of Royal Decree 1614/2011: Gaming operators must offer participants the option of voluntarily setting limits on their deposits of amounts lower than those generally applicable [as set out in Appendix II, cited above]. Each participant may make such a request expressly and individually. Gaming operators must grant these requests immediately, and therefore must have and offer participants the technical systems needed for these self-imposed limits. Moreover, if a player wants to increase their deposit limits, operators can grant this request only if the following conditions are met (contained in Article 36(3) of Royal Decree 1614/2011): a) When it is the first request by a participant to increase or remove any limits, the participant must pass the gambling addiction and responsible gaming tests established for that purpose by the National Gaming Commission. After the tests are passed the new limits will come into effect after seven days. b) In the case of the second or subsequent request by the same participant to increase limits, the operator must analyse the aspects of the participant s gaming records established by the National Gaming Commission, which will relate to their profile, their form of participation in the games, and whether they show any sign of addictive behaviour in relation to gaming. The new limits will come into force three days after this study returns a favourable result. c) No increase in the limits established by the participant may be requested if three months have not elapsed since the last change to the self-imposed limits United Kingdom The UK s Licence Conditions and Codes of Practice require online gambling operators to ensure that their online platform is compliant with the Gambling Commission s technical standards. The UK s technical standards have a standard, Remote Technical Standard (RTS) 12, on financial limits. The aim of RTS 12 is to provide customers with facilities that may assist them in sticking to their personal budgets for gambling with the operator, with a requirement 12A which imposes the obligation that: [T]he gambling system must provide easily accessible facilities that make it possible for customers to impose their own financial limits. Customers must be given the opportunity to set a limit as part of the registration process (or at the point at which the customer makes the first deposit or payment). Moreover, guidance on the implementation of requirement 12A for access to remote gambling over the internet, mobile or interactive TV states that the customer should be offered the opportunity to select a deposit/spend limit from a list which may contain a no limit option or to enter a limit of their choice as part of the registration or first deposit process. The no limit option should not be the default option. The types of limit options can include deposit, spend or loss limits. These are outlined in RTS 12 as: Deposit limits: where the amount a customer deposits into their account is limited over a particular duration spend limits: where the amount a customer spends on gambling (or specific gambling products) is restricted for a given period this type of limit may be appropriate where the customer does not hold a deposit account with the operator loss limits: where the amount lost (i.e. winnings subtracted from the amount spent) is restricted (for instance when a customer makes a 10 bet and wins 8, the loss is 2). While the duration of the player s limit cannot be less than 24 hours, the technical standards also note that limits may be implemented per customer, accounts, or other methods; as well as either across all product channels or across individual products or channels. Links to limit facilities are also required on an operator s homepage, as well as limit facilities being available on deposit pages or linked to from deposit pages (RTS 12A guidance paragraph d, e). Similar to other jurisdictions in this report, should a player wish to increase their limits, a cooling-off period of 24 hours applies before these come into effect (RTS requirement 12B). Guidance on this requirement states that: a) Increases should not be implemented until a coolingoff period of at least 24 hours from the point at which the request to increase the limit was received. Where it is practicable to do so, the customer should be required to confirm that they still wish to increase the limit at the end of the cooling-off period. b) Where possible (for instance, unless systems/technical failures prevent it) limit reductions are to be implemented within 24 hours of the request being received Australia Due to the fact that the IGA sought to restrict the supply of online gambling to Australian residents, and not regulate demand, coupled with the state and territory authorisations for some form of online gambling, the IGA does not provide any guidance 15