Islj 2009 3-4 - TMC Asser Instituut

influence on the society. 7 Amendments where made in order to effectively
cope with the changed situation in the gambling sector and to
make use of novel possibilities to supervise gambling organizers.
Entry into force of the act is split into three stages. Most of the provisions
are already in force as of January 1, 2009. The next set of provisions,
which will become effective on January 1, 2010, is the most
important in the context of online sports betting. The organizers of
remote gambling are given more time to study the impact of the new
legal regime. For offshore companies offering online sports betting
services to their clients in Estonia the impact will be profound. These
provisions and their contribution to the regulation of remote gambling
will be addressed later in detail. 8 Finally, provisions regulating
electronic reporting and supervision of gambling systems, as well as
those that set forth the requirements for games of chance machines
will enter into force on January 1, 2011.
Apart from the new Gambling Act, which repealed the 1994
Lottery Act and 1995 Gambling Act, the relevant legislation includes
a new Advertising Act 9 and a Gambling Tax Act that is currently
undergoing review. 10
4. Definition, Categories and Sub-Categories of Gambling
4.1. Definition
The Act defines gambling as having all of the following characteristics:
a stake made by the player is the condition for participating in a
game; players may win prizes as a result of the game; the result of the
game is determined completely or partially by actions based on
chance; or depends on the occurrence of an event not known in
advance. 11 So there are three elements that need to be present; stake,
prize and chance. If one of the elements is not present then we are not
dealing with gambling. Additionally, Article 2(5) excludes games of
skill in which the only prize is the opportunity to play again in the
same game, as well as sports competitions, lotteries whose prize has a
value of up to EUR1000, and promotional lotteries with a prize fund
of up to EUR10.000. All are excluded from the definition of gambling
within the meaning of the Article 2(1) of the Act. All other lotteries
must be organized by state-owned monopoly. 12
The basic three-element definition has not changed substantially in
comparison to the old Gambling Act, thus, the Supreme Court decisions
on the definition of gambling are applicable in relation to the
new Act as well.
4.1.1. Stake
The Act defines a stake as “a sum of money paid for participation in
a game or a monetarily appraisable obligation taken in return for the
right to participate in gambling.” 13 Before the Act came into force, the
same concept was defined by the Supreme Court in the case 3-1-1-7-
06 (p-d 9.3-9.5). 14 Accordingly, a stake, within the meaning of Article
3 of the old Gambling Act, is the value of the object that the participant
bets, in return for the right to participate in the game, and that
he or she will lose on the basis of chance in case they do not get the
said prize. The sums paid to acquire the right to participate in a draw
do not amount to stake within the meaning of Article 3 of the old
Gambling Act, if as a consequence of the draw the value of the personal
assets placed as stakes to obtain the right to participate cannot
7 Article 1 of the Act.
8 See the paragraphs on online sports betting
infra.
9 State Gazette RT I 2002, 28, 158.
Available at
https://www.riigiteataja.ee/ert/act.jsp?id=
13061981.
10 State Gazette RT I 2008, 15, 108.
Available at
http://www.riigiteataja.ee/ert/act.jsp?id=1
040649.
11 Article 2(1) of the Act.
12 Eesti Loto is the state-owned public limited
company that organises lottery
games in Estonia. For more on the company
see www.eestiloto.ee.
13 Article 2(2) of the Act.
14 The decision is available at
http://www.riigikohus.ee/?id=11&tekst=
RK/3-1-1-7-06. It is worth mentioning
that the concept of stake in this particular
case was defined in relation to lotteries.
15 State Gazette RT I 2002 , 35, 216.
Available at
https://www.riigiteataja.ee/ert/act.jsp?id=
13111425.
16 Article 48 of the General Part of the
Civil Code Act.
17 Article 2(3) of the Act.
be reduced. Only if there is a risk of reducing the value of assets of a
player will there be a “stake.”
Furthermore, according to the General Part of the Civil Code Act
of 2002 15 , Article 66, property is “a set of monetarily appraisable rights
and obligations belonging to a person unless otherwise provided by
law.” Article 65 of this Code provides that the value of an object is its
usual value, meaning its average local selling price (market price).
Furthermore, “objects are things, rights, and other benefits which can
be the object of a right.” 16 Therefore, betting a sum of money in return
for which a participant receives the object or rights of the same value,
or the exception from obligations of the same value, will not constitute
the decrease in the value of asset and will not constitute a “stake.”
4.1.2. Chance
The concept of chance under the new Gambling Act does not rely on
a predominance test; instead, not only in the games in which the
result is entirely dependant on chance (such as slot machines), but
also in the games in which the result depends partly on chance (and
partly on skill), will there be a “chance” within the meaning of the
Act. In addition, the element of chance does not have to dominate
over the skill to determine its outcome. This approach is reflected in
the express language of the Article 3(4) that defines games of skill as
games whose outcome depends predominantly on the physical skilfulness
or skills and knowledge of the player. Thus, only a certain element
of chance needs to be present for there to be a “chance.”
However, sports competitions (which by nature of sport industry
always contain a certain degree of chance) are excluded from the categories
of gambling.
4.1.3. Prize
The Act defines the prize as the right of a player to acquire money or
other benefits having a monetarily appraisable value. 17 As should
already be clear from the definition of gambling, Article 2(5) excludes
certain types of prizes from the scope of the Act. In addition, Article
41 provides that the prize for a game of skill organized on a machine
for a game of skill shall be an object that is not money and whose
value is a maximum of EUR 50. The prize in an online game of skill
cannot exceed EUR 50.
Once it has been ascertained that all the elements are present and
that the case involves gambling within the meaning of Article 2 of the
Act, the next step is to identify the category and sub-category of gambling
in question.
4.2. Categories and sub-categories of gambling
The Act encompasses types of gambling that were previously insufficiently
regulated or not regulated all. As a novel element lotteries and
games based on “mental skills” are included in the Act as forms of
gambling. Remote gambling is now specially regulated, and so are
promotional lotteries.
According to Article 3 the categories of gambling are: 1) games of
chance - games whose result depends on chance and which take place
using a mechanical or electronic apparatus or through the agency of a
game organiser; 2) lotteries - games whose result is determined completely
by chance, where the prize fund forms up to 80 per cent of the
sales price of the lottery ticket print run and results are revealed a
maximum of three times a day or results or are revealed upon uncovering
a field on a lottery ticket; 3) totos - games whose result depends
on the prediction by the player of the occurrence, non-occurrence, or
the manner of occurrence of an event, where the event with regard to
which the player enters a stake is beyond the control of the organizer
of the gambling, receiving the prize depends on whether the prediction
comes true, the amount of the prize depends on the size of the
stake and on the winning coefficient determined before the stake was
placed (betting), or on the percentage of the stake pool determined by
the organiser of gambling, the number of persons making the correct
prediction, and the sizes of their stakes (totalisator), and; 4) games of
skill - games whose outcome depends predominantly on the physical
skilfulness or skills and knowledge of the player, and that are organized
by using a mechanical or electronic tool.
A RT I C L E S
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