The Hellenic Gaming Commission (Επιτροπή Εποπτείας και Ελέγχου Τυχερών Παιγνίων (EEEP)) has issued warning orders to a number of unlicensed major online gaming companies ordering them to stop providing services in Greece by December 6 or face consequences including prison, fines and blacklisting. The new State regulations were adopted in August 2011 but as yet there is still no mechanism for obtaining a gaming license.
After the cut off date it will be illegal for banks to process transactions for blacklisted sites and their IP addresses will be banned.
Temporary licences were awarded to 24 operators conditional on the payment of two years of taxes based on their history of operations in Greece. Some, like PaddyPower and SportingBet, paid up, but other major operators including bwin.party refused.
The law called for a public tendering process to be put in place where operators could bid for licences, but to date the Greek regulator has failed to achieve this and there is currently no way to become a new licensed operator in the Greek market. As the process is the responsibility of the Greek Finance Ministry which has been overwhelmed with the present financial crisis there is little likelihood of solving the problem in the near future.
The operators who refused argue that the Greek legislation is clearly in violation of EU laws and treaties and have contested the provisions by making complaints to the European Commission through the Remote Gaming Association (RGA) and the European Gaming and Betting Association (EGBA).
The latest EU Commission Action Plan exposes many of the national gaming regulatory regimes as being in breach of EU law but backs away from heavy handed enforcement action.
The Greek law is considered to be particularly egregious because it exempts the national champion “OPAP”: (Greek Organisation of Football Prognostics S.A) from the new gaming taxes. OPAP has recently been given an effective monopoly of the gaming business in Cyprus as the result of strong political links between the Greek and Cypriot politicians.
OPAP was founded as a State owned company, and the Greek Government still controls through its 34% shareholding. The Government has been ordered to sell its stake by the IMF, EU, ECB Troika as a condition of its next financial bailout but has been dragging its feet on the issue.
Playtech, owner of the iPoker Network, is one of the bidders attempting to buy the Government’s stake. The extent to which it will be affected if iPoker skins defy the Greek warning and continue to accept Greek players is an open question. Regulators in other countries, most significantly the USA, are now taking into account previous regulatory compliance behaviour in their suitability assessments for new license applications.
The arrest of bwin.party’s co-CEO Norbert Teufelberger in Brussels yesterday as the result of the company’s defiance of the Belgian regulator caused an immediate 4% fall in the company’s share price costing shareholders £40m. Playtech is worth about 25% more than bwin.party and its shareholders will be equally sensitive to the company taking regulatory risks that can hit them in their pocket.
The lack of an effective enforcement mechanism at the EU level and the sensitivity of the major companies to regulatory risk suggest that December 6th will see a wide level of compliance with the EEEP’s order to cease services. The original consultation on which the new regulations were based argued that they were necessary to prevent players going to illicit sites where they would be at risk. With effect from December 6 those illicit sites can look forward to a surge of new Greek customers.