Current Legal Climate for Online Gambling in Canada and Germany

Online Gambling Law in Canada

 

Online gambling is usually known as a legal grey area. However, does that imply Canadians playing a few internet poker hands in their sitting rooms are supposed to one day expect a SWAT (Special Weapons and Tactics) team to smash through the front door to seize their laptop?

Well, the short and simple answer to that question is a no. The longer answer is less clear, as might be expected.

Whether the problem is offshore gambling sites, Uber, or file sharing, all of the laws in force in the country are still taking time catching up to the complications of a connected world.

In Canada, gambling is falling under the provincial jurisdiction. That is black and white. The internet’s greyness stems, which does not pay attention to the provincial limits. Countless offshore gaming sites are located in locales like Cyprus, the Isle of Man, and Gibraltar, where the rules of gambling are undecided, and the government embraces tax revenue.

As for these Canadian offshore operators’ legal status, a gaming law expert, and a lawyer called Dickinson Wright said that the matter is best understood by examining the offshore site’s legality of accepting bets from Canada, plus what the law is saying regarding bets made by the Canadians.

For gamblers, he does not see anything in the Criminal Code of Canada that makes betting through an offshore site unlawful. Lipton said that players are not committing any criminal offense by being in a situation where they are involved with offshore operators who are playing slots, playing poker, or whatever the case could be.

 

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Provincial Jurisdiction

The complex part of the issue is the offshore operators’ legality of taking wagers from Canada. Before the internet, the legal technicalities of gambling used to be more straightforward. Every province determined its gambling rules, whether lotteries, bingos, or casinos. Horse racing is an exception, which Canadian Pari-mutuel Agency (CPMA) regulates. CPMA special operating agency of the Agriculture as well as Agri-Food Canada. Over time, all the provinces, excluding Saskatchewan have moved towards online gambling.

In 2004, B.C. started offering sports betting and online lottery tickets. In 2009, it added poker and a year later bingo and online casino games.

Quebec and Manitoba have a similar online gambling menu options, as does the province of Ontario as of Jan. Alberta is expected to join these provinces later this year.

The Atlantic Lottery Corporation (ALC) oversees the sale of bingo and online lottery tickets for the Maritime provinces. However, so far, the organization doesn’t offer casino games like slots online, blackjack, or poker. Aside from several inter-provincial agreements, bettors from outside are restricted to play on provincial websites.

Because gambling is a provincial matter, any legal doubt boils down to whether the Penal Code prevents offshore operators from conducting business with Canadians.

In 2001, the Supreme Court of British Columbia offered some clarity in a case that involved Starnet Communications International (SCI). SCI had a gambling license from Waladli, and also had an office in the coastal seaport city Vancouver. The court affirmed that a Canadian-based gambling website could not legally accept any bets from Canadians.

The Offshore Websites a Click Away

The section of the law that has not yet been in court worries offshore websites that do not have a physical presence there. Only a click away for the gamblers, is what they are doing unlawful? Lipton answered yes. He said that he doesn’t believe the law is grey.

People might want to call it anything they want, but Lipton believes that he could point to a specific provision in the Penal Code and he could tell offshore operators, under the conditions, that if they do certain things they would be prosecuted under that specific Criminal Code section.

Until the day offshore gambling will have its day in court, doubts will remain over its legal status. However, Lipton said that other cases, foe matters like copyright protection, confirm that operators from outside that maintain a strong connection to Canada could be found to be breaking the law of Canada.

If an offshore website, for instance, does business on a famous Canadian site, advertise there, enters into contracts and deliberately takes bets from Canadians, that would bring that operator under the jurisdiction of Canada.

More to the point, because gambling is the sole provinces purview, offshore websites could be violating Canadian laws on a daily basis. Whether Canada decided to enforce the laws is another issue.

 

Source: CBC News

Kahnawake Gaming Commission

Up to the present time, the RCMP has not brought any case forward against any offshore gambling operator. It is likely that might happen, but doing that would take time as well as resources not to consider navigating the international extradition complexities.

A possibly more aspect that is fraught, whether, from a law enforcement, political, or legal perspective – to prosecute a case against a certain offshore website is the Kahnawake First Nation jurisdictional claims in Quebec province.

Only down the road from the city, Montreal, it isn’t physically offshore, yet the gaming regulatory body Kahnawake Gaming Commission is among the largest online gambling hosts in the world.

For the RCMP to decide on pursuing a foreign operator could first need a serious political as well as legal engagement with the predominant Aboriginal Canada south peoples of the Arctic (First Nations) territorial jurisdiction. At best, that could mean a court case that is drawn out. At worst, Oka-style standoff memories serve as a warning.

Recently, Canadian law enforcement appears preoccupied with biker gangs, drugs, as well as terrorism. In that context, it is not surprising to see why the Royal Canadian Mounted Police, which did not respond to the requests for comment regarding Kahnawake gaming, might have put a low priority on online gambling.

Now that more of the 13 provinces are committed to the online gaming, people remain to see whether gambling is going to become of high priority. Given the money that is currently flowing to the offshore websites, though reasons seem to be scaling for any legal grey sections to become clearer.

 

 

The changes and rulings of Germany’s gambling law in 2016

 

2016 was a year full of legal action when it comes to gambling in Germany, with many changes coming soon.

1. Ongoing problems with the German sportsbook licensing process

Licenses for opening up a sportsbook in Germany began in 2012 and call 420 providers the opportunity to obtain a sports betting license. This law was ill-fated and full of problems from the start. In 2016 the matter is got even worse.

In February, Court of Justice of the European Union (CJEU) ruled that German law enforcement must not prosecute any European intermediary that offers a sports betting services. This was on the grounds that penalizing operators in Germany does not comply with EU law.

What this means is that the EU courts ruled stating that an unlawful state-run monopoly on sports gambling has been upheld. Even though there was a licensing process available since no licenses have been issued there was no private Enterprise. Since the state-run sport betting providers were allowed to continue their business, this constitutes a monopoly in the CJEU’s eyes.

This has resulted in a conundrum for German law enforcement authorities. It has become difficult for them to enforce German licensure two private sports betting services that have licenses in the other EU States, even though they are in breach of German law by not having a German license.

The licensing process has been attacked not just by the EU courts. Many decisions from German courts have decided in favor of private providers. the Wiesbaden Administrative Court considered a licensing procedure as non-transparent and illegal, citing the limit of 20 licenses is it possible justification. The Court ruled that this was a breach of free-market principles.

This ruling forced several German law enforcement authorities to Grant seven-year license two operators who had completed the minimum requirements for licensing, even though the proceedings had not been finalized, and even though the number of applicants may exceed the original limit of 20.

At the start of 2017, the Higher Administrative Court of North Rhine Westphalia also came to the same conclusion that despite a lack of licensure, intermediary Services offering sports betting located in the area must be permitted to continue offering their services to providers authorized in another EU member state. This decision will be upheld so long as those operators cannot obtain a license within Germany under German rules.

Once again, this court decision has the view that existing policy continues a culture of non-transparency and discrimination, propping up the de facto state monopoly along the way.

Because the license requirements could not be enforced legally, some Federal states decided to implement what were called “toleration proceedings.” if you received this “toleration” they were not officially received their licenses, but their businesses would be “tolerated” in the state that issued the toleration.

In the Federal State of Hesse, the offer of toleration was intended to cover online operations as well. This procedure, however, was suspended based on a ruling from the Wiesbaden Administration Court, deciding that private operators are not required to take part in the proceedings if they had already completed their license requirements.

The final binding decision from the Higher Regional Administrative Court of Hesse confirm this and included that the Federal State of Hesse must not request of the participation in their Toleration proceedings from providers who have licenses in one of the other EU States, even if they had not undergone the German licensing process, since both the initial license proceedings and the toleration proceedings are in contradiction with EU law.

 

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2. Strict requirements for gambling prohibition orders

The Higher Administrative Court of Baden-Wuerttemberg decided against an order which prohibited offering online scratch card and casino games. The Court ruled that such prohibition orders needed to have very specific reasoning justifying it. The authority is required to describe in detail which gambling services on specific home pages must be banned. In addition, the court was skeptical regarding the overall legality of prohibiting online gambling in the first place due to its incongruence with EU law. They emphasized that authorities must act equally and uniformly against gambling models and not arbitrarily against a small number of individual sites.

3. Land-based casinos

In 2017, there were extreme changes regarding private land-based casinos. These issues were known from the start in 2012 and are about to become enforced after the five-year transition period.

Starting in July 2017, the minimum distance allowed between these locations must be met, and these locations cannot provide more than a specified number of slot machine games at once. In addition, only one such business can operate per building. As a result, hundreds of these locations needed to be shut down.

Unsurprisingly, a multitude of lawsuits emerged from the federal states opposing the demands to close these businesses. In response, the Federal Administrative Court confirmed that the stipulations we’re legal and binding. The Constitutional Court also validated that these changes were constitutional.

4. The Interstate Treaty on Gambling

In March of 2017, a newly written German Interstate Treaty on Gambling (ISTG) was approved by the prime ministers of the sixteen German Federal States. This new ISTG will real gambling lot in the entire country if it is approved by the state parliaments. Upon approval, it will become enforceable on January 1st, 2018.

The 2018 edition of the ISTG will uphold and confirm the legal requirements of the 2012 edition. Additionally, the new ISTG will set off a new licensing process for sportsbook operators. This brand-new licensing process is required to be open to an unlimited number of applicants, and there is no upper cap on the number of licenses that can be issued. These licenses are expected to be confirmed and issued in January 2019 at the absolute latest.

Those who were successful in the prior licensing process from 2012 will be automatically issued interim licenses for the business year of 2018. Mini private providers appreciate the more open and permissive sports-betting procedure, but the debate regarding the legality of German gambling still likely to rage on.

The European Commission has already criticized the 2018 ISTG, emphasizing the fact that the expanding online casino and poker Market will still be completely unregulated. This will have a negative impact on players and minors caught up shady business practices. In addition, the European Commission he’s concerned about issuing entering licenses and giving a head start to some providers. This one your head-start may result in a potentially unfair opportunity to position themselves in the market and achieve greater penetration and those who had to wait.

 

Also read about tech issues related to gambling in Germany.