Islj 2009 3-4 - TMC Asser Instituut

meted. On June 23, 2006, the market value of the undertaking was
EEK 6.61 billion, on July 10, 2007, it rose to EEK 15.2 billion, and on
September 2, 2008, it sharply dropped to EEK 4.9 billion. The managing
director of the EHKL might eventually get closer to the truth
than the drafters of the explanatory memorandum. At the same, the
Estonian casino market will become more difficult to penetrate for
new entrants.
Casino firms have started to prepare for the changes ever since the
proposal. Some restructuring and merger activity has taken place
already even before the adoption of the Act while it was still in the
form of legislative proposal. 52
12. Conclusions
The new Gambling Act aims to provide an attractive and trustworthy
business environment for the organization of remote online gambling
from Estonia. However, the possibility of banning access to the services
by internet service providers and restrictions on transferring funds
to locally unlicensed remote gambling operators, as well as the
requirement for remote gambling operators to have a server physically
located in Estonia, put in question the attractiveness of Estonia as
a small market for foreign online gambling operators. Whether such
restrictions are in accordance with EU internal market law, Article 49
in particular, is another question and the one that poses a legal problem
that is by no means confined to Estonia.
Sports Betting in Latvia: Law and
Policy
by Sarmis Spilbergs and Reinis Pavars*
❖
1. Introduction
As in most jurisdictions worldwide, sports’ betting in Latvia is regarded
as a gambling activity. Under Latvian law betting is defined as
depositing a stake on the possibility or impossibility of any event and
the amount of the gain depends on the accuracy of the player’s forecast,
deposited stake, as well as on the index for calculation of the
gain, which is fixed by the rules of game. 1 Sports’ betting is where a
person wagers on the results of a sports event and the amount of the
possible winning is determined by the stake-winnings ratio set by the
betting service provider. In the case of a totalizator, the prize is determined
according to the total amount of pre-paid stakes. 2
Since the time Latvia regained its independence from the Soviet
Union in 1991, the gambling industry has witnessed a significant
growth. Sports betting and bookmaking, which constitutes a certain
part of the industry, has also developed significantly. In the early
nineties, due to the lack of gambling regulations, the growth of the
gambling industry was spontaneous and uncoordinated. However,
even without specific regulation, sports betting did not become very
popular. In 1994, when the first gambling regulation was introduced, 3
sports betting as a service almost ceased to exist due to its low popularity
and the newly adopted regulation, which made the service more
complicated to provide. However, in the late nineties, along with economic
growth, the emergence of casinos, and the increasing popularity
of slot machines, sports betting also became more popular. The
growth in the industry brought light to different types of wagering
and bookmaking, but sports betting became the most popular of
them. Consequently betting reception centers were opened throughout
the largest cities of Latvia.
Currently the rivalry from foreign online betting organizers, usually
operating in more favorable regulatory environments, has lead to a
situation where there is only a single enterprise licensed in Latvia to
provide the traditional and interactive sports betting services. The
Latvian licensing regime imposes the same capital, establishment and
* Law Offices of Klavins & Slaidins
LAWIN, Riga, Latvia.
1 Gambling and Lotteries Law of Republic
of Latvia, adopted on 17 November
2005. article 1,5;
2 Ibid., article 1.18;
3 Law on Lotteries and Gambling of
Republic of Latvia, adopted on 16 June
1994;
4 Supra note 1;, art.81;
5 Ibid., art 82;
6 Annual Public Report 2008 of the
Lotteries and Gambling Supervisory
Inspection, approved by the decree No 7
of June 29, 2009, page 20, available at
www.iaui.gov.lv/Gada_Parskati/default.h
tm last accessed on 20 July 2009;
other requirements on the sports betting organizers that a “brick and
mortar” casino operator is faced with. Companies wishing to provide
only sports betting services might see this as quite harsh compared to
regimes in some other jurisdictions. The Internet and the evolution of
other technologies has allowed many operators to establish and get
licensed elsewhere, but still enter the Latvian market via electronic
communication means. Recent trends indicate that foreign operators
are capable of adapting to local markets not only by offering to bet on
sports events, but also on a range of different Latvian social, cultural
and political events.
2. Regulation of and supervision of sports betting in Latvia
The “ Law on Lotteries and Gambling” was adopted by Saeima (the
Latvian Parliament) on June 16, 1994, and during the next decade it
was amended nine times before being replaced on November 17,
2005, with the current Gambling and Lotteries Law (hereinafter the
Gambling Law). The regulation of betting has evolved slowly over
time, including in relation to the licensing requirements, the supervision
mechanism, the regulated forms of gambling (traditional, interactive),
and the rules on protection of gamblers’ rights and public
interests.
The supervision authority over gambling organizers is the Lotteries
and Gambling Supervisory Inspection (hereinafter the Inspection),
however, the State Revenue Service and the State Police also exercise
control, for example with respect to taxation, underage gambling,
etc. 4 The Inspection is the competent authority in key matters of
compliance with the law and regulations, licensing, control and
supervision, development of legal acts and surveillance of the market. 5
The Inspection also ensures the protection of gamblers’ rights and
aims to reduce the eventual social risks related to gambling. From the
latest annual reports of the Inspection, one of Latvia’s policies in the
field continues to be the limitation of the organization of gambling in
the interests of the general public. 6 The Inspection constantly gathers
and analyses market data and based on its conclusions as to whether
the state policy is being implemented successfully it decides whether
additional legislative initiatives are necessary.
2.1. Licensing - General
For a company to be able to render sports betting services, general and
special licences must be obtained in accordance with the Gambling
law. Licences may only be received by capital companies (a Limited
Liability Company or a Joint Stock Company) established in Latvia
with no less than 51% local shareholding (EU investors are regarded
118 2009/3-4
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