Islj 2009 3-4 - TMC Asser Instituut

trary, it could be the licensing and regulatory environment that makes
sports betting organizers consider operating from abroad. The possibilities
of electronic communication means allows them to shop for
the most beneficial jurisdiction to establish and licence themselves (if
at all) and then serve the Latvian clients online. The number of such
companies seems to be only increasing over the years. The trend that
the whole gambling industry is moving more to the online environment
has also been recognized at the EU level.
The European Parliament recently adopted a non-legislative resolution
on the Integrity of Online Gambling. 45 The European
Parliament has recognized many of the issues that the Member States
face with online gambling and calls for closer cooperation not only
between Member States, but also EU institutions to deal with them
and form a “common position.” The uniqueness of the industry has
also been recognized, which makes the pure internal market approach
inappropriate in this area, recognizing the rights of each Member
State to regulate the area according to its traditions and culture,
including the right to legitimately restrict the freedom to provide the
45 “Integrity of online gambling”, reference
INI/2008/2215; available at
www.europarl.europa.eu/oeil/
FindByProcnum.do?lang=en&
procnum=INI/2008/2215 last accessed
20 July 2009;
46 Reference for a preliminary ruling from
the Hoge Raad der Nederlanden, lodged
on 18 June 2008 - Ladbrokes Betting &
Gaming Ltd and Ladbrokes International
Ltd v Stichting de Nationale
Sporttotalisator, (Case C-
258/08),(2008/C 223/41); and „BET-
FAIR STARTS LEGAL ACTION
AGAINST DUTCH GOVERNMENT”,
available at corporate.betfair.com/power-
scourt-pr-betfair-and-dutch-government-
6-5-09.pdf, last accessed on 17 July 2009
online gambling services. Hence, on the one hand the European
Parliament calls for cooperation to deal with the current concerns, but
on the other it is not trying to impose certain level of harmonization
among Member States. Harmonization, however, seems to be something
that the industry might be willing to see. There are at least two
requests for preliminary rulings to the European Court of Justice
seeking a response whether Member States shall recognize each other’s
licensing regime. 46 These decisions will once again show where the
balance of competence to regulate in the gambling sector is to be
found, or whether it is the absolute competence of each Member
State.
Returning to the case of Latvia, although the regulations might
seem to be quite strict, at least the sports betting sector and online
betting remains a relatively open market. There are no prohibitions
for online gambling, nor are the activities restricted to state monopolies.
The question whether the Latvian legal environment is attractive
for potential operators is a different debate. So far there has been no
domestic case law regarding the interpretation of the Gambling law in
relation to sports betting. There have only been rumors of match-fixing,
but no real court cases. The current greatest challenge for the
Inspection and the CRCP is to achieve effective enforcement of the
advertising restriction. Depending on how successful this battle will
be, the results will tell whether the restriction does not need to be
reassessed in general. The current market data shows that despite the
economic downturn, the betting sector is still holding up and demonstrating
a slight growth.
❖
Sports Betting in Lithuania
by Jaunius Gumbis and Liudas Karnickas*
Historical perspective
In 1990, when the independence of Lithuania was restored, the law
legalising gambling games in Lithuania was adopted. However,
already in 1994 total ban on all forms of gambling was introduced. It
was only in 2001, when the new Law on Gambling (the “Gambling
Law”) came into force and reset the legal framework for gambling,
including sports betting activities. The main reason to repeatedly
legalize gambling, including sports betting, was the need for additional
income in the state budget in the form of various fees and taxes
related to gambling activities. The first sports betting companies started
their activities as soon as the new Gambling Law was established.
As of 2009, four companies engaged in sports betting activities are
established in Lithuania.
Applicable legislation
No special legislation regulating sports betting has been adopted in
Lithuania. However, sports betting is organized within the general
framework of gambling and the particular framework of betting. The
Gambling Law is the main legal act regulating gambling in Lithuania,
setting forth the main requirements for gambling companies, restrictions
and prohibitions related to the organization of gambling and
supervision of gambling activities. Civil relationships, i.e. the basic
rights and obligations of an organizer of gambling and a gambler, are
also briefly regulated by the Civil Code of 2001. The Civil Code sets
forth that betting has to be organized under the established procedure
in order to have any legal effect for the parties involved. Pursuant to the
* Respectively, Doctor-in-Law and Partner,
Law firm Lideika, Petrauskas, Vali nas ir
partneriai LAWIN and Lawyer, Law firm
Lideika, Petrauskas, Vali nas ir partneriai
LAWIN, Vilnius, Lithuania.
Lawyer, Law firm Lideika, Petrauskas,
Vali nas ir partneriai LAWIN. E-mail:
liudas.karnickas@lawin.lt
Civil Code, the ticket, check, or other document specified in the rules
of the game, is regarded as the contract between the organizer of gambling
and a gambler. The Law on Lottery and Gambling Tax of 2001
applies to taxation matters related tosports betting. The Rules on
Licensing of Gambling, adopted by the Government of Lithuania
establish the procedure for granting licenses to organise gambling activities.
Totalisator and betting centres are established according to the
Procedure on Establishment of Totalisator and Betting Centres, adopted
by the State Gaming Control Commission (the “Commission”). It
should also be noted that the draft of the Gambling Law (the “Draft
Gambling Law”) has been under preparation since 2006 and is to be
adopted in the foreseeable future.
Concept of gambling and betting
The Gambling Law defines gambling as a game or mutual betting
that is organized under the established regulation, where the participants
seek to win money by voluntarily risking a stake, and where
wins or losses depend on chance or the outcome of any event or sports
match. Betting is regarded as one of five forms of gambling, and is
understood as mutual betting on the outcome of an event based on
guessing, where the amount of the win depends on the amount of the
bet made and the odds fixed in advance by the betting intermediary.
It should be noted that the Draft Gambling Law introduces the parties
of betting with the additional possibility of agreeing on the odds
on a case by case basis. The other four forms of gambling are machine
gaming, bingo, table games, and totalisator. The organisation of any
of the aforementioned gambling games requires a separate license. All
five licenses can be obtained by a single company. Lithuanian legislation
does not provide any other particular definitions or features of
sports betting.
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