Thibault Verbiest, Attorney at the Bar of Brussels, shares with IGN his legal interpretation of gambling as addressed by France and Belgium.
France and Belgium will be studied together as their legislation with regard to gambling and lotteries (still largely of Napoleonic origin) is very similar. The political and legal authorities of the two countries have not yet taken cognisance of the phenomenon. However, they should soon come to a realisation of its importance, given the exponential development of the network in Europe.
The present study will mainly discuss the criminal liability of the operators of virtual casinos.
The liability of other actors in the network who may be involved in the operation of the site or who many facilitate the operation thereof will then be briefly discussed.
THE LAWS
A. OPERATORS OF VIRTUAL GAMES OF CHANCE OR VIRTUAL LOTTERIES
A.1. Virtual lotteries
Definition:
Article 301 of the Belgian Criminal Code and article 1 of the French law of 21 May 1836 ban the organisation of lotteries that are not legally authorised.
Infringement requires 3 elements:
1. Any offer made to the public.
Placing on the Internet a lottery that is accessible to all, even requiring a password to enter the site, certainly covers the advertising nature required by law.
2. Intended to make a profit
3. The aspect of random winning
The two latter conditions are always present in the case of lotteries that are conventional but organised on the Internet.
Persons responsible and penalties:
The Belgian and French laws define the "authors", "entrepreneurs" and "agents".1
This therefore involves all those responsible for the management of the server and the "authors" of the lottery, i.e. those who designed or conceived it, which would mean that the designers/computer programmers of the virtual lottery itself can be prosecuted.
In Belgium, the persons responsible are punished with imprisonment of eight days to three months and a fine of 10,000 francs to 600,000 BEF, while in France they risk imprisonment of 2 years and a fine of 200,000 FF.
Application of the Belgian and French laws on virtual lotteries established abroad:
In France, the law expressly covers foreign lotteries. This is not the case in Belgium. However, in application of the theory referred to as ubiquity, the Belgian courts declare themselves to be competent as soon as one of the constituent elements of the infringement has been committed on national territory, without the need to establish whether the infringement was committed in full.
In this context, in a decree of 27 September 1938, the Court of Cassation had already decided that articles 301 and 302 of the Criminal Code applied to lotteries organised abroad, of which the tickets were offered to the public in Belgium and elsewhere.2
Consequently, the Belgian judge should have no problem being declared competent in the case of a lottery on the Internet that operates from abroad and offers its "virtual tickets" in Belgium in particular.
1The Belgian law adds "administrators" and "staff".
2Court of Cassation, 27 September 1938, Pas., 1938, I, p. 295.
A.2. Games of chance
In Belgium, pursuant to article 1 of the law of 24 October 1902 concerning gambling, are punished with an imprisonment of eight days to six months and a fine of 2,000 BEF to 1,000,000 BEF persons who operate "in any place and in any form whatsoever" games of chance insofar as they procure any direct or indirect profit from these games.
Assuming that the offending virtual games are classed as "games of chance"3, the applicability of article 1 of the law of 24 October 1902 to cyberspace will therefore pose no problem.
In France, a similar law exists but it is limited to betting on horse races that are not legally authorised.4
It should be noted that certain servers allow the public to gamble for pretend money which cannot be converted into real money ("funbucks").
Such a practice should also fall within the scope of Belgian criminal law insofar as it stipulates that "the allocation of any tokens, objects or securities whatsoever is considered as a material enrichment or gain".
With regard to the application of the criminal law on servers established abroad, the abovementioned theory of ubiquity should once again allow procedures to be instituted in Belgium.
The infringement may be deemed to have been committed on national soil insofar as a game organised from a site located abroad and received in Belgium implies a positive act on Belgian territory, i.e. gambling, anda positive act committed abroad, i.e. accepting the participation of a Belgian player.
In France, the ban on games of chance other than betting on unauthorised horse races is more vague.5
Article 1 of the French law of 12 July 1983 punishes with two years of imprisonment and a fine of 50,000 FF participation in a gaming house ("maison de jeux de hasard") to which the public is freely admitted.
Furthermore, the Belgian Criminal Code contains the same prohibition (article 305, paragraph 1).
Three legal conditions are required:
1° the organisation of a gaming house
2° open to the public
3° where games of chance are organised
When applied to virtual casinos, the two latter conditions do not pose any particular problem.
This is not at all the case for the notion of "the organisation of a gaming house".
A server that offers virtual gambling facilities via the Internet to standalone computers does not in any way meet the definition of a "gaming house" in the physical acceptation of the term as it was initially conceived by the legislators.
However, Belgian and French judges sometimes adopt an "evolutive" or "teleogical" interpretation of the criminal law when they are called upon to pass judgement on acts that the legislator could not possibly have imagined at the time when he issued the text of the criminal law, in particular in the field of information technology andthe new technologies.
Insofar as the criminal law has a "restrictive" application, such an evolutive interpretation is only permitted by the Courts of Cassation of France and Belgium within very strict limits.
The judge must first seek to establish the actual intention of the legislator, that is, the "purpose" of the legislation.
If he concludes that the legislator would no doubt have intended to ban the act if he could have imagined its existence, he must then ensure that it can be reasonably understood in the legal definition.6
In Belgium, the Court of Cassation has thus decided that the distribution of video cassettes was banned under article 383, paragraph 3 of the Criminal Code which, however, only relates to "figures and images" of a pornographic nature.7
Under these conditions, it is reasonable to believe that, if the legislator could have imagined the existence of cyber-casinos which offer exactly the same gambling possibilities and which present at least the same dangers as "traditional" casinos, he would have intended to ban the operation or "organisation" thereof by the same token.
With regard to the second condition, i.e. whether virtual casinos fall within the legal definition, as has already been explained, prima facie, an Internet server cannot be assimilated to a "house" and, a fortiori, this will also be the case between a virtual casino and a "gaming house".
However, analysis of the initial objectives of the law could lead to a different conclusion.
The notion of a "gaming house" has always been interpreted by French doctrine and jurisprudence as being any "fixed establishment where gambling is practised with the three-fold character of habit, continuity and permanence"8.
According to this definition, a virtual casino would have no difficulty being classed as a "gaming house" which, in a permanent and habitual manner and from a fixed "establishment" (the Internet server), organises games of chance.
By the same token, the persons responsible for foreign cyber-casinos located, for example, in the Caribbean, may fall within the scope of the criminal law by virtue of the abovementioned theory of ubiquity which is also applied by French judges.
3In France and Belgium, a game of chance is defined as a game in which chance prevails over skill and combinations of intelligence. Differences exist among judges when it comes to defining gambling. For example, in Belgium, poker is sometimes considered as a game of chance and sometimes as a game of skill.
4Pursuant to article 4 of the law of 2 June 1891, is punished with imprisonment of two years and a fine of 60,000 FF any person who organises "in any place and in any form whatsoever" betting on horse races that are not legally authorised, whether directly or as an intermediary. This article is therefore applicable to betting on horse races organised on the Internet. In Belgium, however, all betting on horse races is legal.
5It must be specified that in France casinos must be authorised by the Home Office (law of 15 June 1907), while in Belgium all casinos are in principle banned without any possibility of legal derogation. However, there are casinos that are only tolerated or unofficially authorised by the authorities.
6 Court of Cassation, France, 01.21.1969, Bull. crim., n° 38; Court of Cassation, Belgium, 11.18.1992, Pas., 199, I, p.1269.
7Court of Cassation, Belgium, 05.04.1988, R.D.P., 1988, 961.
8P. BOUZAT, Rev. Sc. Crim., 1974, 114 under Cass. crim., 28 June 1973.
B. INFRASTRUCTURE, ACCESS AND SERVICE PROVIDERS
By virtue of the rules governing criminal complicity in France and Belgium, the provider, unless the situation is brought to his knowledge by a third party (a user of the network, a consumer protection association or the public ministry, for example) and he does not act to end it, should in principle evade all prosecution insofar as it is impossible for him to control the enormous and constant flow of information through his installation.
A subtle distinction should, however, be made with regard to Web hosting service provider.
When a Web hosting service provider assigns an Internet address (URL) to a new site, he has the power to control the contents of the files of the web pages that are supplied to him.
In this case, if the provider realises that the planned activity is illegal (for example, the setting up of a virtual casino) but nevertheless agrees to host the site, he may be liable under criminal law.
Assuming that a provider has made himself an accomplice to an illegal activity applicable to a virtual casino established abroad or otherwise, he may be brought before the French or Belgian prosecuting courts, even if the persons responsible for the offending site are not prosecuted or remain unknown.
This would also be the case if the provider is established abroad.
C. SEARCH ENGINES AND SITES OFFERING ADVERTISING RELATING TO VIRTUAL CASINOS
If, knowingly, a search engine includes a virtual casino on its lists and indexes, thus promoting its existence in cyberspace, or if a site advertises on behalf of a cyber-casino or is linked to it by hypertext, the rules of criminal complicity should apply.
In addition, these sites could probably also be prosecuted on the basis of article 303, paragraph - of the Belgian Criminal Code and article 1, paragraph 3 of the French law of 21 May 1836 which punishes persons who, by public notices, advertisements, posters or any other means of publication, provide information on the existence of forbidden lotteries or facilitate the issuance of their tickets.
In Belgium, this ban also applies to games of chance (article 3 of the law of 24 October 1902) and in France to betting on horse races (article 4, paragraph 3 of the law of 2 June 1891).
D. FINANCIAL INSTITUTIONS PROVIDING ON-LINE PAYMENT FACILITIES
Any financial institution involved in the payment of bets and winnings, whether it be through a fully electronic system ("E-money") or by credit card, may be considered as the co-perpetrator of unlawful activities relating to games of chance and lotteries which are applicable to virtual lotteries and casinos, insofar as it wittingly lends its assistance to the operation of the site.
E. TECHNICIANS INVOLVED IN THE OPERATION OF THE SITE
In France, article 2 of the law of 12 July 1983 imposes a two-year prison sentence and a fine of 200,000 FF for the importing or manufacturing of any gambling device.
In Belgium, such legislation does not exist. However, for decades, jurisprudence considers as co-perpetrators or accomplices of unlawful activities specific to games of chance persons who manufacture, import, rent, install or repair electrical or mechanical gambling devices in establishments that are open to the public.
By analogy, for example, all those who have participated in the technical design of the gambling software and of the web interface may be prosecuted.
CONCLUSION
In France and Belgium, the ban on virtual lotteries and casinos will probably one day be a reality.
The existing criminal law should provide a means of easily prosecuting by Belgian or French prosecutors the persons responsible for virtual lotteries, whether established abroad or otherwise, assuming of course that they can be identified.
This will also most certainly be the case in Belgium with regard to all banned games of chance and in France with regard to betting on unauthorised horse races when they are operated on the Internet.
In contrast, the ban of other virtual games of chance on French soil will no doubt be a controversial issue due to the need to assimilate "virtual casinos" with the legal notion of "gaming houses".
Such an "evolutive" interpretation is, however, not impossible.
The other persons or entities involved in the network, whether they are established abroad or otherwise, must be extremely vigilant.
In effect, Belgian and French prosecutors will no doubt one day be tempted to take action against them in frustration that they are unable to institute effective proceedings against the actual operators of the offending servers.
Thibault VERBIEST
Attorney at the Bar of Brussels