Islj 2009 3-4 - TMC Asser Instituut

while exemptions have been added to the advertising regulation of
tobacco products and gambling. Article 21 of the Advertising Act regulates
the advertising of gambling, gambling premises, and gambling
organisers, 38 all of which are, according to its first paragraph, prohibited.
However, the same provision goes on to add an exception for the
commercials placed at: the premises of the gambling organizers; on
board aircrafts and ships, as well as at airports and ports providing
international transportation services; gambling locations in hotels;
websites of gambling organizers; and, places of live sports events to
which bets on the basis of totos can be made. In the case of lotteries,
the exception applies for the lottery sales points and for advertising by
means of broadcasting directly before or after the lottery program or
during the commercial breaks of that program.
Trademarks of gambling may be exhibited outside of the abovementioned
sites, inasmuch as gambling, gambling locations, or winning
chances, are not depicted or referred to expressly on the trademark.
39 It is prohibited in advertisements to present gambling as
something that is beneficial and in the public interest, or to imply that
gambling enhances social status. Gambling advertisements must not
call for participating in gambling or visiting gambling locations. 40
The new Advertising Act constitutes an improvement in regulation
considering that the repelled act provided only that “advertising of
gambling and casinos is prohibited except in locations where gambling
is held” and that “advertising of gambling shall be understandable
and unambiguous and shall not contain a direct appeal to participate
in gambling.” 41
10. Regulation of Remote Gambling: Online Sports Betting
According to the classification provided by Schriever and Aronovich 42
it appears that Estonia employs a partly “protectionist prohibitive system”
in relation to remote gambling. 43 This conclusion follows from
Articles 16, 22, 52 and 56 of the Act, which taken together provide that
an organizer of gambling needs to be in possession of both an activity
and operating license; that the server containing software used for
organizing online gambling must be located in Estonia and its proprietor
must ensure supervision officials unhindered access to the server;
that persons providing public data network transmission service or
public data transmission network access service are obliged to prevent
access through communications devices to online gambling without
delay, upon learning of the illegality of the aforementioned gambling;
and that persons intermediating payment are, upon learning of the
illegality of the aforementioned gambling, prohibited from transferring
payments to organizers of online gambling that do not conform
to the requirements of the Act.
10.1. Industry
In the beginning of 2008 there were close to 700.00 Internet users in
Estonia between the ages of 15-76, which means some 66% of the
population in that age group. 44 The first attempt to deliver online
sports betting services to the Estonian market was done by a company,
Megapanus, that tried to establish a foothold in the Estonian gaming
industry in 2001 but failed. The problem with Megapanus was
that it offered only two or three games once or twice a week, which is
not enough to develop and sustain gamblers’ interest. The Estonian
Olympic Committee (EOK) purchased Megapanus and from it created
AS Spordiennustus. In close cooperation with Ålands
Penningautomatförening that owns 20% of the AS Spordiennustus,
European Game & Entertainment Technology Ltd Ab, a Finnish supplier
of Internet gaming solutions, has successfully delivered an
Internet sports betting solution to the subsidiary of the EOK.
The company started its activities in the beginning of April 2004
with the two week test period investing EEK 10 million for the launch
of the system. Its target group are young or middle-aged men in
Estonia interested in sports and with average or above-average
income. People aged 21 and over that have a personal code and a bank
account in Estonia can register at AS Spordiennustus site www.fortuuna.ee
and place bets on any sport event. Although in the initial period
there were talks about plans to expand to the markets of two other
Baltic states, the portal still remains in only the Estonian and Russian
languages. In the first 19 days of its activity, AS Spordiennustus has
paid out EEK 300,000 in prize money, and registered 1203 players.
Today, there are 2300 registered users in Estonia out of which 70% are
active, i.e., play at least once a week. EOK transfers all the profits
directly to the development of sports in Estonia, and therefore, the
portal can be seen as a supplementary means of support for EOK, and
in turn, for Estonian sports. The share capital of AS Spordiennustus
is just over EEK 2 million. The subsidiary has cooperation agreements
with 10 media channels in Estonia, Basketball and Volleyball
Associations, and with Phillips.
10.2. Licensing fiasco
The old Gambling Act did not allow for the organization of totos or
any other gambling category on the internet, and it did not contain
any provisions related to remote gambling. However, in April 2004
this lack of legal basis did not prevent the Financial Ministry from
issueing a license to operate internet-based totos to AS Spordiennusuts.
Later on, when the organizer of triobet.com asked for the license, it
was refused due to the lack of legal basis. 45 Recently, however, the AS
Spordiennustus had its license for fortuuna.ee renewed until May 8,
2018, on the basis of Article 27 of the Act, which gives the power to
local governments to consent to the opening of a gambling venue. 46
The only company in Estonia that provides online sports betting
services and that has a license to operate is AS Spordiennustus. The
remaining operators, such as owners of Unibet, Bwin, Bet24, Triobet
(with shares owned by Baltic football leagues) and others, are offshore
companies and they are not in possession of such licenses. They do
not pay any taxes in Estonia either. On the one hand, these companies
are doing nothing more than exploiting the benefits of the EU
internal market. On a closer look they are exploiting far more than
that. They make the prohibition to operate without a license obsolete
for the companies registered abroad, but this is enabled by the technology
in the sector the regulation of which is considered to be without
the satisfactory solution anywhere in Europe. However, the most
disturbing part concerning the arrangements in the online sports bet-
38 Concepts which are interpreted in accordance
with the Gambling Act. See Article
21(2) of the Advertising Act.
39 Article 21(4) of the Advertising Act.
40Article 21(3) of the Advertising Act.
Nevertheless, the commercials of illegal
sports betting sites such as unibet.com,
triobet.com and bwin.com are shown on
the Estonian TV all the time, inviting
people to participate! This is clearly in
violation of the Article 21 of the
Advertising Act. See paragraphs below on
regulation of remote gambling.
41 Article 19 of the repelled Advertising Act
of 1997, as amended.
42 E. Schriever and A.M. Aronovich ‘Cross-
Border Gambling on the Internet:
Challenging National and International
Law’ Publications of Swiss Institute of
Comparative Law, Genf: Schulthess
Juristische Medien AG, 2004,
pp. 105-141.
43 This system is employed also by countries
such as Denmark, Norway, Austria,
Finland, and some others. Its defining
characteristic is that the organisation of
gambling is allowed only on the basis of
the license issued by the competent body
of that state and the online gambling
services provided from foreign countries
by organisers which are not in possession
of such license are considered illegal.
44 See www.riso.ee/et/infoyhiskond/
statistika/kronoloogiliselt_nov2007_
e-seire.
45 Source: www.ohtuleht.ee/
index.aspx?id=212406. Consider also the
provisions of Article 372 of the Penal
Code: (1) Economic activities in a field
subject to a special prohibition, or activities
without an activity licence, other
licence, registration or through an unapproved
enterprise in a field where such
activity licence, other licence, registration
or approval of enterprises is required, are
punishable by a fine of up to 300 fine
units or detention. (2) Same act, if: 1) it
is committed by a person who has previously
been punished by such act; 2) danger
to the life or health of numerous people
is caused thereby, or 3) it is committed
within a field of activity related to
health services, handling of infectious
materials, aviation, railway traffic or provision
of credit, insurance or financial
services, is punishable by a pecuniary
punishment or up to 3 years’ imprisonment.
(3) An act provided for in subsection
(1) of this section, if committed by a
legal person, is punishable by a fine of up
to 500 000 kroons. (4) An act specified in
subsection (2) of this section, if committed
by a legal person, is punishable by a
pecuniary punishment. (5) A court may,
pursuant to the provisions of § 83 of this
Code, apply confiscation of a substance
or object which was the direct object of
the commission of an offence provided
for in this section.
46 The document available at
tallinn.andmevara.ee/oa/
page.Tavakasutaja?c=1.1.1.1&id=113617.
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