Lotteries reject European Commission's narrow view of regulation

On Wednesday, European Commission officials warned Member States Denmark, Hungary and Finland that they may face legal action if they do not open their borders to sports books based in other EU countries.

Reuters also reports that EU Industry Commissioner Guenter Verheugen has written to German regional state authorities on Friday, cautioning them that the EU might launch an infringement case against the Länder if they proceed with plans to ban online gambling.

But Winfried Wortmann of the European state lottery association said he was confident that the final decision about the right of Member States to regulate gambling in their own jurisdictions lay with the European Court of Justice, not the administration. He said he expected the European Commission would reconsider its approach of looking at gambling from a pure internal market perspective and enter into a "full picture dialogue" with Member States and their lotteries which includes the numerous social implications of gambling recognised by the ECJ and beyond.

Online gambling sector reels over UK tax rate

Online gambling firms reeled as UK government officials announced new tax rates that are much higher than had been previously been expected, The Times reports. Companies will face a 15 percent duty on gaming yield, defined as the amount bet minus winnings paid.

"This decision means that the UK has effectively turned its back on the [remote gambling] industry," the Remote Gambling Association said in a statement.

Democrats stall on UIGEA repeal

Democrats say they may introduce a bill to overturn the online gambling legislation passed by Congress last fall. In an interview with Reuters this week, the chairman of the House Financial Services Committee, Barney Frank, said he is considering introducing legislation that would repeal elements of the Unlawful Internet Gambling Enforcement Act. Frank told Reuters he would offer more details in the next week or so, but a spokesman for the Massachussets congressman said he had not drafted a bill and had no timetable for action.

Atlantic Lottery moves to curb retailer fraud

An internal review suggests that retailer fraud could be a bigger problem than Canada's Atlantic Lottery Corporation realised. Over the last six years, lottery retailers in the Atlantic provinces have claimed 10 times as many prizes as statistical probabilities indicated they should have. The lottery has announced a series of new measures ranging from customer-facing screens on lottery terminals to background checks on vendors, and is educating players about how to avoid being ripped off when retailers check their winning tickets.

Three in a row for state monopolies

The EFTA Court has rejected a claim by the EEA Surveillance Authority that Norway was acting solely for financial gain when it banned private slot machine operators in 2003 and handed exclusive rights to the national lottery Norsk Tipping. Limiting the reduction in revenues for humanitarian and socially beneficial causes from machine gaming was not the real justification for the restrictive policy, the Court found. On the contrary, these goals were secondary to the need to fight gambling addiction and reduce crime and malpractice.

The Court's decision is final and cannot be appealed.

Winfried Wortmann, president of the European Lotteries association, welcomed the decision, saying it brought even more clarity to two equally favorable ECJ rulings earlier this month by expressly stating that fighting gambling addiction can be best done by state-owned monopoly operators.

EU says Sweden must make its own gambling decisions

The European Court of Justice has thrown out the claim of a private internet gambling operator that had hoped to be granted instant access to the Swedish market. Instead Malta-based Unibet will have to wait for the Swedish courts to rule on its licensing case.

Unibet maintains that because it is licensed in one member state, loosely regulated Malta, it should be able to do business in any other under EU rules on the free movement of goods and services.

State lotteries in Europe welcomed the ruling as an endorsement of member states' rights to restrict the offer of sports betting and other gambling services, as established in existing ECJ case law.

UK drops advertising ban

Officials in the UK unveiled new rules that permit online gambling companies, sports books and casinos to advertise on television and radio, the Guardian reports. The regulations contain restrictions designed to ensure that adverts remain socially responsible.

Advertisements may not suggest or imply that "gambling can be a solution to financial problems." They also cannot "portray, condone or encourage" behavior likely to lead to "financial, emotional or social harm." Advertisers also must take care not to link "gambling to seduction, sexual success or enhanced attractiveness."

Strict ground rules also cover the times at which spots may run. Adverts may not run during programs likely to be watched by children or "designed to appeal to children."

The changes go into effect in September 2007. The Committee on Advertising Practice has published guidance for the industry on the new rules, including information on the screening process and tips on advert design.

Virtual currencies raise money laundering fears

China has taken steps to regulate virtual currencies, The Register reports. As many as two-thirds of China’s internet users use QQ coins, a virtual currency which can now be traded or accepted as currency by third party companies. That has China’s central bank worried about the possible economic impact and other potential implications.

According to Business Week, online currencies are routinely used by money launderers, child pornographers and terrorist financiers. And the San Francisco Chronicle warns that American gamblers are already using virtual currencies to work around UIGEA’s prohibition on Internet gambling transactions.

UK schools crack down on online gambling

At least two elite public schools in the United Kingdom have decided to start offering courses on the dangers of irresponsible gambling. The Daily Telegraph reports that Harrow and Kings College have both brought in experts to lecture on the risks involved with Internet gambling after uncovering problems on their campuses.

"There are all sorts of problems with pupils on the internet and gambling is just one of them," notes Harrow headmaster Barnaby Lenon These sites are very, very addictive. At boarding schools it is slightly easier to manage because we can monitor its use. It is harder when pupils are using the internet at home and parents are not really aware of what their children are doing."

"With new technology, children have even more access to ways of gambling," notes Professor Mark Griffiths of the International Gaming Research Unit at Nottingham Trent University "It is clear that adolescent gambling on the internet and other remote media is likely to become an issue of increasing concern over the next few years."