March 10, 2011

PartyGaming and Full Tilt given the boot in Belgium

PartyGaming and Full Tilt Poker are amongst a number of companies being asked to leave the fledging online market in Belgium or face criminal and administrative sanctions.

The Belgian Gaming Commission yesterday sent out letters to regulators in Alderney and Gibraltar asking them to tell any licensees operating illegally in Belgium to shut those operations down immediately.

In the letter to Alderney, seen by GamblingCompliance, PartyGaming Plc and Full Tilt Poker are picked out as “two operators with significant market share in Belgium” that are working without local authorisations.

Belgium’s updated Gambling Act came into force on 1 January this year, bringing the online market under a licensing system and controversially closing it off to any operator without a land-based permit.

As well as charging a number of online companies licensed in Alderney and Gibraltar with operating illegally in Belgium, the regulator notes that they are allowing players to break the 21 age limit on their sites.

“This means that, in addition to the primary offences identified above, your licensees are also engaged in money laundering because money is being moved through the financial system that is connected to the commission of these underlying crimes,” Etienne Marique, chairman of the Belgian Gaming Commission, states in the letters.

Marique goes on to say that he and his team expect co-operation from the Alderney Gambling Control Commission and Gibraltar’s Gambling Commissioner by preventing the licensees from targeting Belgian players.

Otherwise, he adds, “in addition to pursuing the operators themselves, we will consider pursuing individuals of the [Alderney and Gibraltar regulators] personally for their liability in not preventing these crimes taking place.”

The Belgian regulator has given Alderney and Gibraltar until April 1 to respond, the same day that PartyGaming’s merger with Austria’s Bwin takes full effect.

Peter Naessens, legal counsel to the Belgian Gaming Commission, told GamblingCompliance that the letters were the first step towards ring-fencing the Belgian market against unlicensed operators.

Naessens explained that if the companies refuse to close their sites to Belgian customers, the regulator would pass their details on for criminal prosecution or pursue them with administrative sanctions themselves.

It is unlikely that any operator hit with such cases would then be granted an online licence, according to Naessens.

“These players have a dishonest competitive advantage in the Belgian market. We have to take action against them otherwise players will not move across to our legal operators,” Naessens said.

He used PokerStars, which is in partnership with Belgian firm Circus Groupe, as an example of a licence holder who could see their market share eroded by unauthorised rivals not tied to the same regulations.

Internet poker giant PokerStars launched its Belgium-facing website at the beginning of March and is targeting April or May for the start of its marketing campaign.
In an email to affiliates, PokerStars explained that due to legal restrictions the Belgian site will not offer first deposit bonuses for players and that Belgian residents will only be allowed to play other Belgian customers for cash games.

The new Belgian gambling legislation arms the regulator with internet filtering, advertising restrictions and financial transaction blocking to deal with unlicensed operators, Naessens says it is not ready to use them yet.

Agreements have been reached with internet service providers and financial institutions, he says, but the regulator will not be able to deploy the measures until the second half of the year.

The online market is also not yet fully operational, as it waits for approval from the European Commission on certain licensing regulations later this month.

Belgium has a further pile of royal decrees which need to be enacted to fully kit out the new gambling market, but without a formal government to pass them progress is slow.

Emergency cabinet meetings at the end of last year, though, ensured enough measures were in place for the new Gambling Act to come into effect on January 1.

Full Tilt Poker and PartyGaming were unavailable for comment yesterday.

London-listed PartyGaming said in its full year results last week: “While Belgium has enacted a law for the regulation of online gambling there, the requirement to first have a land-based license is seen by many as being in breach of EU law although no action has yet been taken by the European Commission.”

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