A Look from Europe

GREF (Gaming Regulators European Forum) adopted a position statement on gambling on the internet at the annual meeting in Helsinki, Finland.

This position statement is the base for a common European policy on Internet gambling. Reading the position statement, you will see that this document follows the Finnish approach towards Internet gambling.

(As adopted at the Annual Meeting in Helsinki on 15 May 1998)

1. The Gaming Regulators European Forum consists at representatives from gaming regulatory organizations throughout Europe. Its two main objects as stated in its constitution are:
   a. to provide a forum in which European gaming regulators can meet, exchange views and information and discuss policy on gaming matters; and
   
   b. on special occasions and with the agreement of members represent the different views of European gaming regulators and also provide a central point of contact for enquiries directed at them from authorities or related organizations in Europe and elsewhere.'
   
   
   At its meeting in Helsinki in May 1998, the Forum agreed to this position statement on Internet gambling. As an association of experts in gambling regulation, it offers the statement as a set of recommendations of good practice for the consideration of the appropriate regulatory bodies and Governments of individual member countries, whether at national or autonomous regional level. It acknowledges that the countries will wish to consider, and if necessary adapt, the statement in the light of CD their particular legal, social, cultural and economic circumstances.
   
   
2. The Gaming Regulators European Forum regards the regulation of gambling (that is gaming, betting and lotteries) as a matter for the competence and jurisdiction of individual countries, in the light of their particular social, cultural and economic conditions. It therefore follows that it is a matter for individual Governments, either at national or at autonomous regional level, whether or not they wish to permit any forms of gambling to be offered on the Internet in their territories and, if they do, under what circumstances or conditions particular forms of gambling are to be allowed. Any such decisions should be respected by other jurisdictions.
   
   
3. If a jurisdiction is to permit forms of gambling to be offered on the Internet, the members of GREF regard it as important that:
   (i) those to be permitted to offer such forms of gambling should be subject to the same level of investigation and probity and other checks as is applied to traditional, terrestrial gambling operators.
   
   (ii) those so licensed should be required to establish their operation in the territory of the jurisdiction concerned so that the operation can be properly controlled and policed.
   
   (iii) the gambling so offered should be restricted to residents of the jurisdiction concerned and residents of such other jurisdictions with whom there are co-operative or reciprocal arrangements.
   
   
4. As a mailer of good practice, those permitting such gambling should also address such issues as.
   • the methods to be used to ensure that such operations are fairly conducted and the players are fully aware of the rules that apply.
     
     
   • the methods of ensuring that such operations are not used as a means also of conducting any illegal activities, in particular for money laundering.
     
     
   • the permitted arrangements for paying for wagers on the gambling offered, including restrictions on the granting of credit.
     
     
   • the methods of protecting and guaranteeing the funds deposited and the monies won by the players.
     
     
   • the means of ensuring that no players are under the legally permitted age for the appropriate form of gambling in the jurisdiction concerned.
     
     
   • the means and level of protection to be offered to compulsive gamblers and others who have difficulty in controlling their gambling.
     
     
   • the controls to be placed on advertising, particularly in respect of jurisdictions which do not permit such gambling or do not welcome such advertising.
     
     
   • the methods to be used to protect the privacy of the players and the confidentiality of the information provided by them.
     
     
   • the methods to be used to ensure data protection and security of transmission.
     
     
   • the methods to be used to ensure that tests and checks are conducted regarding the randomness of the games and, including EDP-audits, regarding the electronic gaming systems used by the operators.
     
     
5. In considering whether to permit gambling operations on the Internet, it may be necessary to distinguish between those who simply seek to offer an alternative means of access to existing permitted terrestrial gambling products and those wishing to establish separate, new forms of gambling opportunities. In either case, consideration of the types of issue raised above is likely to be needed.
   
   
6. If a jurisdiction wishes to prohibit cross-border gambling on the Internet for its residents, and consequently wants to prevent the import of such gambling, it will probably need to do so by means of legislation preventing service providers from transmitting the offer of such facilities, rather than by means of prohibitions on individual residents of those jurisdictions from taking up such facilities. In support of this, consideration should be given to the possibility of requiring licensed Internet gambling operators to include in the contracts with their service providers a condition that the latter will prevent access to addresses of foreign (illegal) operators of Internet gambling in so far as the service providers can be expected to have notice of those addresses.

* The meeting at Helsinki was attended by regulators from 15 countries (Estonia, Denmark. Finland, Germany. Great Britain Hungary. Ireland. Netherlands, Norway, Poland, Portugal, Slovenia, Spain Sweden and Switzerland.

The Federal Office for Police Matters of Switzerland offered an annex which is more specific and detailed. The discussions within GREF led to the conclusion that this document is too detailed to be annexed to the statement. But representatives from several European countries felt that this paper might be a good basis for their national legislation.

POSSIBLE ANNEX TO GREF POSITION STATEMENT ON GAMBLING ON THE INTERNET

MODEL SYSTEM FOR THE LICENSING OF GAMES OF CHANCE ON THE INTERNET (CASINOS AND LOTTERIES)

Casinos
Aim

Licensing of state controlled games of chance which allow a secure, transparent, controllable and socially acceptable operation.

License
Licensing of the operator will be by the national competent Gaming Board or licensing authority.

Licensee

• judicial persons under public law (e.g. state run operator)
• juridical persons under private law whose principals have national residence
• proper funds, good reputation, guarantee of a proper operation (same standard as for operators of traditional, terrestrial casinos)
• proof of legality of the invested funds.

Players

• national residence or citizenship. Offers Games of chance with internationally accepted and standardized rules.

Period of license

Limited to 5 years maximum with the possibility of renewal or prolongation. Conditions

a. Security

• Hard/software must record every manipulation of the player and the operator. Same period of maintenance of these records as for traditional, terrestrial casinos.
• Duplicate, locally separate archives for the records.
• Money transfers must by cryptologized.
• Money transfers must be recorded.
• Competent gaming board has at any time full access to all files.
• Gaming licensing for all principals of the production, support or distribution of the operating hard/software.
• Online connection between the monitoring of the operators computers and the gaming board.
• Full access of the player to all his/her personal flies and data (especially the records of his/her gaming).
b. Social aspects

• Players must be registered (see below)
• Players must have an individual players account with the operator. -No interest to be paid on the players' account.
• No granting of credit.
• Limited bets (e.g. US $ 10.000/month).
• Mandatory notification of problem/compulsive gamblers helpline.
• Protective software for minors (NetNanny. Surfwatch ..).
• Certain percentage of the turnover must be dedicated to social funds under the administration of the national gaming Board.
• Same playing limitations for traditional, terrestrial casinos.
c. Advertising

Advertising only of verifiable facts (e.g. registration rules, recorded personal data, payout of offered games
d. Jurisdiction

Clear indication that jurisdiction is in the territorial competence of the concerned gaming board.
e. Guaranteed funds

The funds deposited by the player (players account), the prizes to be paid out and all other financial obligations of the operator must be guaranteed. A guarantee must be deposited at the national gaming board.
f. Penal and administrative regulations

Operators of games of chance on the internet are subject to the same penal and administrative regulations as applied to traditional, terrestrial gaming operators.
g. Accountancy

Same regulations will be applied as for traditional, terrestrial gaming operators.
h. Taxation

Same regulations will be applied as for traditional, terrestrial gaming operators.

2. Lotteries

In addition to the above recommendations, lotteries on the Internet have to fulfill a beneficial, charitable purpose.

3. Registration

a. A prospective player has to fill in a registration form


• name
• family name
• date of birth
• social security number
• home address
• e-mail address
• amount of players account.
b. Operator has to check the information on the registration form, especially the financial background of the prospective player (in connection with the amount of the player's account).

c. After a successful check of all information the operator invites the prospective player to pay the amount for the players account.

d. Once the players account has been credited, the operator communicates the personal pin-code to the player.

e. The player has to give his/per personal pin-code and debit the bet on his/her player's account to gamble.

f. Wins and losses have to be credited/debited to the players account.

g. Players account can be closed at any time by the player.

h. Copies of all personal data and effected manipulations have to be sent to the national gaming board.