Despite having no Internet legislation, the Turkish government is poised to take legal action against foreign Internet gambling operations.
I-gaming has become very popular in Turkey among its population of nearly 70 million people. Roughly US$2 million per month is spent on Internet gambling via credit card transactions, and that number is increasing.
Eurobet, a property of Austria-based Betandwin, is the foreign market leader in Turkey. Its advertising can be seen nearly weekly on the soccer fields and the TV screens.
To facilitate the ongoing privatization program for the National Lottery, Milli Piyango, the Turkish government prepared a new draft law amending certain provisions of the Privatization Law No. 4046. The draft law envisages the separation of the lottery activities and the regulation and monitoring services of the National Lottery.
QLot Consulting of Sweden and Ernst & Young Turkey are advising the Turkish Privatization Agency in the privatization of Milli Piyango, and the two groups insist that the new legislation would be introduced. A successful tendering process would otherwise not be possible. The privatization of Milli Piyango is planned for 2005, although the process has already been delayed for years.
Now committees consisting of representatives from ministries of justice, internal affairs, finance, culture and tourism as well as the Banking Regulation and Supervision Agency (BDDK), Credit Cards Center, universities, Internet service providers and other groups are working on the matter to prevent uncontrolled Internet gambling.
In addition to the aforementioned projects, authorities have begun taking action against illegal Internet gaming and are taking precautions to tax the illegal income from gambling. With this in mind, the government decided to add special clauses to the draft of the code that will renew the structure of Milli Piyango Association.
"According to the structure proposed, Milli Piyango Association is authorized to regulate and control the games and lottery drawings in the virtual world," Mehmetcan Tarhan of the Tarhan Law Firm explained. "Related companies and persons will be forced to obey the regulations (of the association) aimed at prevention of illegal games or games organized without permission. There will be a monetary fine or imprisonment for the persons acting against the regulations."
Milli Piyango Association will also start legal proceeding with the help of the commissions mentioned above. The association will also be empowered to block access to illegal gaming and betting sites over the Internet. Advertising for the illegal services will be a crime as well. The idea of controlling Internet gambling sites by tracing the credit cards used was also floated during one of the meetings of the special committees, but doing so isn't legally possible.
In the meantime, Turkey's General Directorate of Revenues has begun work on a new regulation draft for the taxation of virtual gambling and betting sites.
Now the government is taxing 10 percent for games of chance, but this percentage will at least be doubled for Internet games.
It is unclear how such a system would apply to international operators.