Online games of chance to be regulated in Belgium

04 June 2007

Laurent Masson

Currently in Belgium, the operation of gambling on the internet or via mobile phones is prohibited but as the market for such operations has continued to grow despite this fact, a draft bill is in progress to regulate this market – ensuring consumers are protected and taxation responsibilities fulfilled.

A draft bill governing games of chance is currently pending in the Federal Parliament of Belgium. This bill may be adopted in the coming months, but the odds are heavily against it completing the legislative process prior to the federal elections in June 2007.

The provisions related to online games of chance are undoubtedly among the most important changes proposed by this draft bill.

Games of chances are currently governed by the Act of 7 May 1999 on games of chance, establishments of games of chance and the protection of players (the “Gaming Act”).

Under the Gaming Act, any game or bet, whereby the contributed stake (of any kind whatsoever) leads to the loss of this stake or to a gain of any kind by at least one of the players, betters or the organisers of the game or bet (where chance is an element, even if merely a secondary one), is considered a “game of chance”. The definition includes all casino games, but excludessport games/betting and games without any chance of enrichment or material benefit.

The Gaming Act contains a general prohibition on operating games of chance or establishments where these take place, regardless of the place and form, but allows the granting of a certain number of licences. However, as the only establishments which can receive a licence are casinos, gaming rooms and drinking establishments, the operation of games on the internet or by mobile phones currently infringes the Gaming Act. This offence can be punished by a term of imprisonment from six months to five years and/or monetary fines between €25,000 and €550,000.

Notwithstanding the legal prohibition, games of chance offered by internet and mobile services constitute a steadily growing market. This has led to concerns (among other things) of tax evasion and a lack of protection for players. As a result, the draft bill represents an acceptance that such operations are here to stay and as such it is better to try to exercise some form of control over them.

The proposal in the draft bill is to create a system whereby a European Union-based online content provider of games of chance could operate in Belgium, provided that it has previously been granted a reliability certification by the Belgian Gaming Commission.

The prior reliability certification would constitute a guarantee label for the players. Indeed, the granting of the certificate would be subject to the game provider depositing a guarantee with the Belgian Gaming Commission and fulfilling several qualitative criteria in terms of, among other things, security of payment operations, solvency, rules of the games, handling of complaints, etc.

The Belgian treasury would be another beneficiary of the new system, as the reliability certification would only be granted if the game provider fulfils its tax obligations and the Gaming Commission will be authorised to revoke the reliability certification if the conditions cease to be met.