Thursday, January 2, 2020
By Andrew Tottenham
Managing Director, Tottenham & Co

A great deal happened in 2019 and trying to write about all of it is too big a task. But I have highlighted some of the events that took place, which should give a flavour of what happened in the past year.

Mergers and Acquisitions
In 2019, most major economies saw tepid growth, which led operators to look elsewhere for opportunities to increase revenues and profits. The big event of the year in the land-based casino sector was the takeover, still subject to regulatory approval, of Caesars Entertainment by Eldorado Resorts. Whilst this it ostensibly about two US companies, some of the fallout has already been felt elsewhere in the world. Tom Reeg, Eldorado’s Chief Executive, announced that the combined company would focus on its US operations. That led to Caesars withdrawing from the process in Japan to gain one of three integrated resort licences. Caesars also withdrew its offer regarding the new casino resort in Hellinikon, Athens, where Caesars had done most of the running; it was said it was theirs to lose.

By Joerg Hofmann
Head of Gaming Law, Melchers Law Firm

The casino laws in Germany provide for a specific levy for the operation of state-licensed bricks-and mortar casinos, the so-called “Spielbankenabgabe”. With the payment of this casino levy, casinos do not have to pay various general taxes, including corporate, income, and trade taxes.

That tax exemption has now been called into question by the EU Commission. On 9 December 2019, the Commission launched a formal investigation into possible advantages for state-licensed casinos in Germany, to assess whether the special tax treatment of the state-licensed casino operators is violating EU state aid rules.

As an example, §7 of the Berlin Casino Act stipulates the following: “The casino operator shall be exempt for the operation of the casino from the payment of those taxes which are subject to the legislation of the Land and which are directly related to the operation of the casino. In addition, the casino operator is also exempt from property tax and trade tax for the operation of the casino.” There are similar provisions in the other casino legislation in Germany.

The Euro News Revue
by Hannah Gannagé-Stewart and Andrew Tottenham
Yogonet - 24 December 2019
If you want to understand how changes to gambling regulations are having a negative impact on a pan-European operator, look no further than this interview with Dieter Kuhlmann, member of the Management Board of The Gauselmann Group. Mr Kuhlmann gives a country by country overview of the effect that changing laws and regulations are having on the Group’s operating division, Merkur Casino. For example, in Spain, the situation is – at best – one of stasis, with no new licenses expected to be issued by the regional authorities in 2020, and at worst increased taxes, site closures and the challenges of implementing player identity verification in small venues. Growth is mainly being achieved through acquisition. (AT)
SBC News - 20 December 2019
Casinos and gambling operators can look forward to a renewed focus on anti-money laundering procedures as we move into 2020. The EU 5th Money Laundering Directive comes into force on 10 January, alongside which the UK’s Gambling Commission (GC) will launch the 5th edition of its guidance for remote and non-remote casinos on ‘The prevention of money laundering and combatting the financing of terrorism’. Addressing the changes in a statement, the GC said it expects operators to implement changes with the “requisite urgency”, including investing appropriately in new technology to mitigate the risk of money laundering where required. (HGS)
iGaming Business - 20 December 2019
The Malta Gaming Authority (MGA) has made public the extent of its enforcement action over the first half of 2019, reporting that it suspended eleven licences and cancelled a further seven in those six months. The regulator also issued eleven notices of reprimand and eight administrative fines during a crackdown of money laundering and the funding of terrorism. The MGA appears to have been on somewhat of a mission to prove that despite Malta’s sometimes less than squeaky clean reputation, the gambling industry is being closely monitored. It even entered a Memoranda of Understanding with the Malta Police Force and the Swedish Gambling Authority, in a bid to shore up its reputation as a leader in the field. (HGS)
iGaming Business - 18 December 2019
The Swedish administrative court in Linköping has ruled in favour of a reduction in the penalties levied against Genesis Global and Aspire Global by Spelinspektionen for breaching its self-exclusion regulations. In March, the regulator ordered Genesis to pay SEK4m (£325,609/€382,757), while Aspire was issued a SEK3m fine in April. The court recorded no objection to the regulator’s decision or the method of calculating the fines, but it found that the estimated turnover of both companies was lower than the initial calculation and ruled that the fines should be reduced accordingly. The court has weighed in on a number of the regulator’s decisions this year, as the newly regulated market finds its feet. (HGS)
SBC News - 18 December 2019
SBC reports on an appearance in Holland last month by René Jansen, the chairman of the Dutch gaming authority Kansspelautoriteit (KSA), in which he confirmed that further delays were expected in launching the country’s Remote Gambling Act. Having originally set a target date of 1 July 2020, Jansen confirmed it was more likely to be introduced on 1 January 2021. Alluding to the protracted legislative process through which licensing conditions were being drawn up, Jansen billed the Act as a “thorough, meticulously detailed law”. As SBC points out, it is expected to contain the world’s strictest addiction prevention policies. Under the Act KSA will be permitted to use mystery shopping to unearth illegal operators as well as having the power to demand payment providers cease ties with unregulated entities.  (HGS)
SBC News - 18 December 2019
Having ramped up its responsible gambling strategy and appointed a new ethics board over recent months, the Finnish gambling monopoly Veikkaus has outlined more of the same for 2020. It is looking to cut an estimated 3,500 slot machines and make player identification compulsory. In August Regina Sippel joined the operator as chief financial officer, coming from the Northern Europe division of now defunct travel company Thomas Cook. Less than six months later, Veikkaus is also changing the way its reports its results, publishing profits minus the winnings paid to players and will be linking performance against responsible gambling targets to management bonuses. However, it has warned that the raft of changes could slash earnings by €50m.. (HGS)
G3 Newswire - 18 December 2019
Previously, the Gauselmann Group had lodged a legal challenge against the award of a 15 year contract for the operation of Casino Esplanade in Hamburg. The Gauselmann Group argued that the process to award the contract was done in such a way as to favour the existing operator. Having no success with its complaint to the department responsible for public procurement, which ran the tender, the Gauselmann Group then appealed to the region’s High Court.

In the week before Christmas, the Hanseatic Higher Regional Court ruled that the incumbent operator, Spielbank Hamburg Jahr + Achterfeld GmbH & Co. KG, had won the tender. In its verdict, the Court found that Gauselmann had not provided sufficient information in its offer regarding its corporate structure, despite being asked by the competent authorities to do so. This is good news for the employees of the Casino, who did not know until the verdict whether they would have jobs to go to when the casino contract expired on 31 December.
Spielbank Hamburg Jahr + Achterfeld GmbH & Co. KG has now seen its contract renewed three times since it opened the casino in Hamburg in 1978.  (AT)
SBC News - 17 December 2019
Northern Ireland has launched a consultation about updating its gambling laws. The legislation has been untouched since 1985 when The Betting, Gaming, Lotteries and Amusements Order was introduced. This piece of legislation was heavily based on two laws from Great Britain, the Betting, Gaming and Lotteries Act of 1963 and the Gaming Act of 1968. Since then, much has changed and a legislative update is badly needed. The consultation is available here:

In total, there are about 300 retail bookmaking venues as well as two horse tracks and two dog tracks where betting is allowed. There are also 40 bingo halls and 40 additional locations where low stake/low prize gaming machines are operated. Such machines can also be operated in bookmaker locations, bingo halls, and pubs without an additional permit, so the exact numbers in operation are unknown.

The purpose of the consultation is to determine whether forms of gambling, such as casinos, poker clubs, and online gambling, that are common in other European countries should be allowed in Northern Ireland, where they are currently prohibited. (AT)
This report is edited by Andrew Tottenham and Justin Martin
Tottenham & Co
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London SW3 3HD, UK