IMGL REGULATOR OF THE YEAR AWARDS · Drake University Law School Des Moines, Iowa +1 515 271 2071...

IMGL REGULATOR OF THE YEAR AWARDSDISTINGUISHED REGULATORS HONOURED

AUTUMN ISSUE 2017

SHAPING THE FUTURE OF EUROPEAN GAMING LAW

INCLUDES UPDATES ON: LEGAL REFORM IN ROMANIA

AND 2018 OUTLOOK FOR GERMANY

HEIDELBERG · BERLIN · FRANKFURT

www.melchers-law.comPlease send an e-mail to [email protected] to receive our newsletter.

Jessica Maier, LL.M. Dr. Matthias Spitz Dr. Joerg Hofmann

GAMING LAW

GOOD TO KNOW WHAT’S COMING NEXT. WE MAKE THINGS CRYSTAL CLEAR.

GO7_Melchers_Anz.A4 EGL_engl.indd 3 07.08.17 13:40

European Gaming Lawyer | Autumn Issue | 2017 | 3

CONTACTSInternational Masters of Gaming Law -www.gaminglawmasters.com

EDITOR Nick Nocton: [email protected]

Designer: Kyle YoungProduction & Studio Manager: Craig Young, [email protected] of iGaming Business: Alex Pratt, [email protected] of Operations: Shona ODonnell, [email protected]

SALES Ian Larcombe, [email protected]

Rory Niblock-Stuart, [email protected] Lemur, [email protected]

SUBSCRIPTIONS Account Manager: Sandeep Haer, [email protected]

Print: Printed in the UK by Pensord Press, www.pensord.co.uk Published by: iGaming Business Ltd, Bedford House, 69-79 Fulham High St, London SW6 3JW, UK. T: +44 (0)20 7265 4112 F: +44 (0)20 7954 3511 www.igamingbusiness.com. European Gaming Lawyer is published bi-annually © International Masters of Gaming Law 2016. All rights reserved. ISSN 2398-1903. No part of this publication may be reproduced or transmitted in any form or by any means, or stored in any retrieval system of any nature without prior written permission, except for permitted fair dealing under

the Copyright Designs and Patents Act 1988. Application for permission for use of copyright material including permission to reproduce extracts in other published works shall be made to the publishers. Full acknowledgement of author, publisher and source must be given.

�e paper used within this publication has been sourced from a Chain-of-Custody certi�ed manufacturer, operating within international environmental standards such as ISO14001 and EMAS. �is is to ensure sustainable sourcing of the raw materials, sustainable production and to minimise our carbon footprint.

4 MGL cers

5 Message from The President

8 Legal reform paves the way for market growth in Romania

14 International Masters of Gaming Law Regulators of the Year 2017

18 Gazing in to the crystal ball: 201 regulatory outlook for Germany

[ ]Contents 14 cover feature

IMGL REGULATOR OF THE YEAR AWARDS

4 | European Gaming Lawyer | Autumn Issue | 2017 4 | European Gaming Lawyer |

[ ] O er

i hael ate alo

President Kegler, Brown, Hill & Ritter Co., L.P.A. Columbus, Ohio, USA

T: +1 614 462 [email protected]

ougla loren e Sr

Vice President, Affi liate MembersAvigilonLas Vegas, Nevada, USA

T: +1 702 683 6016douglas.� [email protected]

amie Nettleton

First Vice PresidentAddisons Lawyers, Sydney, Australia

T: +61 2 8915 1030 [email protected]

u tin ran en

Assistant SecretaryKal� Katz & Franssen Amsterdam, Netherlands

T: +31 20 676 07 80franssen@kal� atzfranssen.nl

uirino an ini

SecretaryTonucci & Partners, Rome, Italy


Sue Na

Executive DirectorInternational Masters of Gaming Law, Louisiana, USA


IMGL Officers

Michael E. ZatezaloPresident

Kegler, Brown, Hill & Ritter Co.,L.P.A.

Columbus, Ohio +1 614 462 5400

[email protected]

Jamie NettletonFirst Vice PresidentAddisons LawyersSydney, Australia+61 2 8915 1030

[email protected]

D. Michael McBride III Second Vice PresidentCrowe & Dunlevy, P.C.

Tulsa, Oklahoma+1 918 592 9824

[email protected]

Quirino ManciniSecretary

Tonucci & PartnersRome, Italy

39 06 322 [email protected]

Justin FranssenAssistant SecretaryKalff Katz Franssen

Amsterdam, Netherlands31 20 67 60 780

[email protected]

Marc H. EllingerTreasurer

Blitz, Bardgett & Deutsch, L.C.Jefferson City, Missouri

+1 573 634 [email protected]

Marie JonesAssistant TreasurerFox Rothschild LLP

Philadelphia, Pennsylvania1-609-572-2259

[email protected]

Douglas L. Florence, Sr.Vice President, Affiliate Members

AvigilonLas Vegas, Nevada

[email protected]

Keith C. MillerVice President, Educator

Drake University Law School Des Moines, Iowa+1 515 271 2071

[email protected]

Joerg HofmannImmediate Past President

MELCHERS law firmHeidelberg, Germany

[email protected]

Morten RondeDirector of Education and Association Development

International Masters of Gaming Law

[email protected]

45 208 87210

Sue McNabbExecutive Director

International Masters of Gaming Law

[email protected]

1-702-375-5812

Jamie NettletonFirst Vice President

Michael E. ZatezaloPresident

www.gaminglawmasters.com �

D. Michael McBride IIISecond Vice President

Quirino ManciniSecretary

Justin FranssenAssistant Secretary

Marc H. EllingerTreasurer

Marie JonesAssistant Treasurer

Douglas Florence Sr.Vice President, Affiliate Members

Joerg HofmannImmediate Past President

Sue McNabbExecutive Director

Morten RondeDirector of Education andAssociation Development

INTERNATIONAL MASTERS OF GAMING LAW

Keith C. MillerVice President, Educator

AGLSpring2016_Layout 2 3/21/16 2:09 PM Page 2

arie one

Assistant TreasurerFox Rothschild LLP, Philadelphia, Pennsylvania, USA


oerg ofmann

Immediate Past PresidentMelchers Law FirmHeidelberg, Germany


ar llinger

TreasurerBlitz, Bardgett & Deutsch, L.C.Je� erson City, Missouri, USA


i hael ri e

Second Vice PresidentCrowe & Dunlevy, P.C. Tulsa, Oklahoma, USA


eith iller

Vice President, EducatorDrake University Law School Des Moines, Iowa, USA


orten Ron e

Director of Education and Association DevelopmentInternational Masters of Gaming Law, Denmark

T: +45 208 [email protected]


otwithstanding the unusual summer weather in the United States, the IMGL Spring Conference in Turnberry Isle, Miami, Florida held on May 10-12, was another outstanding IMGL conference.

I would like to thank the co-chairs of the conference, Marc Dunbar and Dan Wallach for their e�orts in not only putting together a �rst class program but also in selecting an outstanding venue – the Turnberry Isle Resort. A�er the conference, Marc Dunbar also arranged a side trip to the Gulfstream Racetrack for a day at the races. I would also like to thank our keynote speakers Jim Allen, Chairman, President and CEO of Seminole Hard Rock Entertainment, Inc. and James Maida, President of CEO Gaming Laboratories International, LLC for their engaging and thought provoking remarks.

In early June, IMGL provided Masterclass panels at the summer meeting of the National Council of Legislators from Gaming States (“NCLGS”) held in Denver, Colorado. IMGL will once again be working with the Spectrum Gaming Group to develop panels for the NCLGS Winter Conference which will be held in Miami January 5-7, 2018.

One of the highlights of each year is the IMGL reception at G2E in Las Vegas and the presentation of “2017 IMGL Regulator of the Year Awards” for both North America and Indian County. �is year’s Regulator of the Year – North America award is Ronnie Jones, Chairman of the Louisiana Gaming Control Board. Congratulations, Ronnie.

�is year’s Regulator of the Year – Indian County award will actually have two (2) recipients: David Vialpando, Chairman of the Santa Ysabel Tribal Gaming Commission in California and Terry Hale, Chief Gaming Regulator of the Seminole Nation Gaming Authority in Oklahoma. �e awards are based not only upon a recipient’s work as a regulator but also on his/her contribution to the gaming industry and a demonstration of service to the community. Congratulations David and Terry.

�e IMGL Masterclasses continue to be popular and IMGL speakers are sought a�er in connection with gaming conferences throughout the world. �e list shown is of Masterclasses scheduled for the rest of the year.

�e IMGL Fall Conference is being held in Copenhagen, Denmark, on September 10-12 at the Copenhagen Marriott Hotel. �e conference will include, but not be limited to, presentations on (1) the latest Anti-Money Directive and how it is impacting the gambling sector throughout Europe; (2) the impact of the United States Supreme Court’s upcoming hearing on New Jersey’s challenge of the restrictions placed upon sports betting imposed by the Professional and Amateur Sports Protection Act; (3) an update on the latest trends and developments in Europe; and (4) a CEO panel which will discuss the future of the gaming industry in light of the expansion of land based casinos, growth of Internet gaming, the rise of eSports, growth of lotteries and skill games.

Another highlight of the Copenhagen conference will be the presentation of the 2017 IMGL Regulator of the Year-Europe. �is year’s Regulator of the Year – Europe will be Birgitte Sand, CEO of the Danish Gambling Authority. Birgitte has been in her current position since 2008 and is a member of the board of trustees of the International Association of Gaming Regulators. Birgitte has also been instrumental in the planning of the IMGL Copenhagen conference. Congratulations, Birgitte.

I look forward to seeing you in Denmark. Details regarding the Copenhagen conference and registration can be accessed on the IMGL website at imgl.org.

Mike Zatezalo, [email protected]

President Mike Zatezalo

[ ]President’s Message

N

Date Event

September 6-7KPMG – eGaming Summit Isle of Man

September 13-15 Betting on Sports – London

October 26-28Malta iGaming Seminar (MIGS) Conference – Malta

October 31 – November 1

Excellence in iGaming (EIG) – Berlin

November 21-22Eastern European Gaming Summit- Sofia, ulgaria

November 22-25Summit in iGaming Malta (SIGMA) – Malta

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Gambling is a growing industry in Romania. According to a Euromonitor survey, Romania’s gambling revenues ranked 47th in the world and 4th in Eastern Europe

out of 100 countries, with estimated total revenues of EUR 153 million for 2016. According to the same source, the gaming sector in Romania will reach about EUR 200 million in 2020; Romania’s compounded annual growth rate of 7% (CAGR), outpaces the global market which will grow by 6.2% (CAGR).

� e growth of Romania’s online gambling industry can be traced back to the 2015 reform of Romania’s current legislation for online gambling.

Prior to 2015, Romania had been under constant criticism from the European Commission and industry stakeholders because of cumbersome requirements applicable to EU and EEA gambling operators interested in operating gambling activities in Romania. Romania’s failure to create an authority responsible for online gambling licensing was also a problem. By adopting the current legislation, Romania’s National O� ce for Gambling (the “O� ce”), was able to address these criticisms and remedy the irregularities that had prevented gambling operators from establishing online gambling businesses in Romania.

� e change resulting from the 2015 gambling legislation was radical. � e new legislation introduced functional licensing and authorisation requirements for online gambling, as well as related activities such as the sale, lease, production, distribution, marketing and maintenance of gambling activities. Here is what you should know about Romania’s gambling legislation:

Online gam ling ro u t e neUnder Romanian law, gambling, referred to as “games of chance”, require the following four elements: (a) participation based on a fee; (b) potential material winnings o� ered by the organizer; (c) award of the winnings based on chance or risk; (d) O� ce approval of the rules governing the award of winnings. All

games of chance meeting these criteria which are made available via a communication system (e.g. internet, mobile or landline) are considered “online gambling”.

Romanian law expressly regulates “common” gambling products and provides straightforward legal requirements. � ese expressly regulated products include: online betting (� xed odds betting, pari mutuel betting and exchange betting); online casino games (including online poker and online slot-machines); remote bingo games; online tombola (ra� es); keno games, and remote lottery games.

However, the law is still insu� ciently adapted for new types of gambling - such as e-sports and daily fantasy sports games - which do not fall clearly into one particular category of online gambling. For example, the law inadequately de� nes the “risk” element – making it di� cult to determine whether certain skill games also constitute gambling activity. Romanian law does not distinguish between various types of risk or whether the participant’s skill was a factor in obtaining the winnings. Consequently, given the broad de� nition of gambling under Romanian law, a skills game which includes an element of risk (irrespective of the type of risk or contribution of the participants in the � nal result) may qualify as gambling and be subject to the regulatory requirements provided by the law. However, it is debatable whether skill games played through online platforms would qualify as online gambling when the risk element is insigni� cant compared to the participant’s skill in obtaining the winnings.

Licensing and authorisation requirements Although the law generally establishes a state monopoly over the organization and operation of gambling activities, any private operator has the right to carry out online gambling in Romania, subject to prior authorization and licensing by the O� ce.

� e O� ce is active in monitoring gambling operators’ compliance and regularly sanctions gambling operators - who are included on o� cial blacklists - for their failure to observe licensing and

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authorisation requirements, including payment of relevant taxes (lists and decisions are accessible at http://onjn.gov.ro/).

Operators interested in operating online gambling in Romania must hold a Class 1 licence and one or several authorisations (their number and type vary depending on the type of gambling involved). In addition, operators interested in performing activities related to online gambling must apply for a Class 2 licence (e.g. operators who hold management and integration platforms speci�c for remote games of chance, operators of data/storage centres etc.). Class 1 licences are valid for ten years and authorisations are valid for one year; both are subject to annual fees.

�e O�ce handles all licence and authorisation applications (which includes all relevant documentation required by law to prove the applicant’s background, good standing and capacity to perform the relevant gambling activities (e.g. corporate documents, share capital threshold, directors’ criminal records, requirements regarding technical equipment speci�c for online gambling etc.). �e O�ce will not grant licences to operators with outstanding payment obligations to the state budget or who have had a previous licence cancelled (within the �ve years prior to the date of application) or revoked (within the last year prior to the date of application).

EU, EEA and Swiss Confederation based operators are eligible to apply for licences and authorisations (without the need to have a permanent establishment incorporated in Romania). In addition, the law provides a simpli�ed licensing process for operators who are already licensed in an EU, EEA or Swiss Confederation state. In such cases, the O�ce may acknowledge that certain licensing requirements are met based on evidence and relevant documentation provided by the applicant (or the corresponding regulatory gambling authority in the respective state) proving

that it meets equivalent requirements in that state and that it holds a valid licence for the relevant gambling activity. Operators of online gambling established and authorised in a di�erent state, must appoint an authorised representative (with �scal or corporate headquarters in Romania) in order to represent the gambling operator before Romanian authorities and for the purpose of carrying out gambling activities in Romania.

Licensing and authorisation requirements di�er depending on the class of licence and type of authorisation involved and are subject to separate applications and procedures. However, the process is straightforward and applications for both licences and authorisations may be submitted at the same time, along with the relevant documentation applicable for each procedure. While the O�ce is entitled in certain circumstances, to request additional documentation regarding an application, in practice, the award process takes between two to four weeks to complete.

Fees and taxesLicence and authorisation fees�e costs for undertaking online gambling in Romania can be signi�cant. Mandatory licence and authorisation fees are due annually, prior to commencement of gambling activities. For Class 1 licences, the annual licensing fees range from EUR 6,000 to EUR 120,000. For Class 2 licences, the annual licensing fees are EUR 6,000, for each type of ancillary activity. �e annual authorisation tax for remote games of chance is 16% of the gross gambling revenue (but not less than EUR 100,000). In addition, other special taxes apply, such as, the EUR 2,500 tax for analysis of an application for a licence for online gambling activities which must be submitted along with the application documents, and the EUR 8,500 annual tax issuing the licence.

Corporate income tax Although Romanian tax law does not explicitly require non-resident online operators to register in Romania for corporate income tax purposes, online operators that have a permanent establishment (“PE”) in Romania are required to register in Romania for corporate income tax purposes.

A PE is de�ned as a �xed place of business through which the activity of a non-resident is wholly or partly carried out, such as - a place of management, a branch, or an o�ce. A PE may also be deemed to exist if a non-resident conducts business in Romania through a dependent agent.Given the fact that online gaming activities involve the selling of services and transmission of data over the internet, online gambling providers may also be seen as electronic commerce (“e-commerce”) businesses – thus triggering additional criteria for determining the existence of a PE. Depending on the location of the server/computer equipment and any support functions performed in Romania, it is possible that a PE may be found and corporate income tax owed. However, the current perspective on de�ning the PEs of e-commerce businesses based on the location of their server is changing due to OECD reports and actions addressing Base Erosion and Pro�t Shi�ing (“BEPS”). Once Romania implements BEPS, the previous positions taken by the tax authorities will no longer be relevant. As a result, when determining if they have a PE in Romania, foreign operators should focus on the functions to be performed in Romania including the ones arising from regulatory requirements (e.g., payment processor, mirror and security servers, legal representatives, etc.).

Tax compliance obligationsIrrespective of the corporate income tax assessment, non-resident operators must


register for tax purposes in Romania in order to declare and pay their annual license and authorisation fees.

Separately, operators are obliged to, individually, notify all players about how much they won from their gambling activities. Following this noti�cation, each player must submit a statement to the tax authorities re�ecting their winnings and the tax authority will determine the tax owed by the player.

Developments under way for the online gambling sectorWhile it is true that online gambling in Romania has seen signi�cant progress due to the 2015 legislation, this sector still requires further development and regulation.

Advertising of online gambling activities Presently, gambling operators can promote gambling on their own internet pages, without such activity being considered an “advertisement” under the law and hence subject to certain legal prohibitions.

However, a new dra� law in Romania would introduce the following signi�cant restrictions on the advertising of all gambling activities:1. advertising of gambling activities will be

permitted only within the premises where gambling activities are organised and in gambling-specialised publications; and

2. audio-visual commercial communications regarding gambling activities will be prohibited.

Despite the dra� law’s goal to protect vulnerable consumers and limit gambling addiction, it lacks clarity and substance and may prove to be insu�ciently adapted to the realities of the gambling sector. Obviously its failure to explicitly address the use of online platforms to advertise gambling will result in confusion. Considering that the only means of advertising allowed under the dra� law are those on the premises of gambling establishments and in

gambling-speci�c publications, a plain reading of these provisions suggests that it outright prohibits online advertising of gambling activities. Also, the dra� law may be understood as expanding the term “advertising” to include promotion on gambling operator’s own websites.

Whether the dra� law allows advertising on online publications specialised in gambling is also unclear. Moreover, the dra� law does not clarify whether the restriction applies only to audio-visual programmes licensed in Romania or also to programmes which are retransmitted in Romania but whose content is subject to the laws of a di�erent jurisdiction, which may give rise to potential discrimination issues when the two types of programmes have similar content.

Anti-Money Laundering (“AML”) rules and potential impact on the gambling legislation Romania’s dra� law implementing the fourth EU Anti-Money Laundering Directive is still in the pipeline. �e current AML dra� law contains stricter rules than those of the AML directive and has potential to negatively impact gambling operators.

�e dra� AML law requires all gambling operators to comply with the AML obligations, which include: • obligations to report suspicious

transactions, despite insu�ciently clear criteria as to what type of information should be reported;

• customer due diligence obligations covering extended circumstances, such as occasional transactions of EUR 15,000, transfer of funds exceeding EUR 1,000, and collection of winnings and casino related transactions exceeding certain thresholds;

• client data recording obligations (applicable for both new and existing clients) which require collection of accurate identi�cation information;

• obligations to keep information, both in hard copy and electronic format, in

a format which is admissible in judicial proceedings, for a period of �ve years.

ConclusionIt is undisputed that through its recent reforms, Romania has established the necessary framework for a prospective online gambling industry, providing adequate tools for those interested in venturing into this sector. In light of the anticipated growth of the gambling sector in Romania, we expect further reform – as well as increased investment – in this sector over the next few years.

Ana-Maria Nistor is a senior associate in the CMS Commercial and Regulatory team in Romania. Ana-Maria coordinates our Gaming and Consumer Products sector group in Romania and is an active member of our pan-European TMT and Consumer Products industry-working groups.T +40 21 407 3872E [email protected]

Andrei Tercu is a senior tax specialist in the CMS Bucharest o ce with over eight years of professional experience advising a wide range of multinational and domestic businesses on both domestic and international tax, accounting, and financial reporting matters.T +40 21 407 3854E [email protected]

aura a t is an associate in the CMS Bucharest competition and regulatory team, with broad advisory experience in general commercial, regulatory and competition law, including the gaming industry. T +40 21 407 3825E [email protected]

I N T E R N A T I O N A L M A S T E R S O F G A M I N G L A W

www.IMGL.org


ach autumn, International Masters of Gaming Law (IMGL) recognizes outstanding regulators based on stringent standards, including preeminence in the regulatory � eld

and their noteworthy contributions to the overall body of regulatory work.

� e regulators are selected from various jurisdictions internationally based on a rigorous nomination and review process. � e categories are Europe, North America, South and Central America, Australasia, Indian Country, and Evolving Jurisdictions. A regulator is not necessarily chosen from each category in each year. � ey are selected only if they receive the required nomination and meet the demands of the review procedure.

� e speci� c criteria for the selection process include that the overall body of work as a regulator be exceptional and that the regulator make contributions to the gaming industry as a whole while demonstrating noteworthy achievements in the regulation of the industry. � e nominee must also provide a stable regulatory environment in the

jurisdiction, be identi� ed as a person of high integrity, and demonstrate service to the community.

� rough this annual selection process, IMGL continues its mission of “advancing gaming law through education” by selecting regulators who re� ect a similar mission in their management style while serving as role models in the regulatory environment. � is year’s recipients of the award for IMGL Regulator of the Year certainly re� ect these characteristics in their professional approach to the task of regulating a challenging and diverse gaming market. IMGL is proud to announce the Regulator of the Year, North America: Ronnie Jones, Chairman of the Louisiana Gaming Control Board; Birgitte Sand, Director of the Danish Gambling Authority, Regulator of the Year, Europe; and David Vialpando, Chairman of the Iipay Nation of the Santa Ysabel Gaming Commission and Terry Hale, past Interim Chief Gaming Regulator of the Seminole Nation of Oklahoma as co-recipients for Regulator of the Year, Indian Country.

IMGL has presented the awards since 2002. For a complete list of all past recipients, please visit our website at imgl.org.

E

International Masters of Gaming Law Regulator of the Year 2017

By Sue McNabb

Sue McNabb

Regulator of the Year 2017 – North America

Ronnie Jones

Regulator of the Year 2017 – Indian Country

David Vialpando


Terry Hale

Regulator of the Year 2017 – Europe

Birgitte Sand


Chairman of the Louisiana Gaming Control Board Ronnie Jones is the � rst recipient of the prestigious Regulator of the year award from Louisiana. Chairman Jones took up the reins of Chairman following the unexpected death of Dale Hall in 2013. He states of his regulatory style, “I engage the industry in a very personal way by visiting properties and meeting regularly with property general managers. I am of the opinion that I cannot properly regulate an industry sitting behind my desk. Establishing an on-going dialogue and relationship with licensees serves both the state’s interests and those of the industry. I � rmly believe that if I create a fair, transparent and objective regulatory environment where licensees know what is expected the industry can prosper and the state is well protected.”

Prior to being appointed as Chairman of the Louisiana board, Ronnie Jones began work at Louisiana State Police where he served thirty-three years. He says of those years, “As legislative liaison for State Police I found myself navigating a di� cult path between those who wanted gaming and those who were opposed to gaming. � us I found myself at more than one committee meeting acknowledging that our agency had no position on whether or not gambling should be legalized but asserting that if it were ultimately approved, the industry would need appropriate oversight similar to what was in place in other jurisdictions…. Wary legislators were insistent on State Police taking the regulatory lead.”

Following those early years of gambling legalization, he remarks, “It was somewhat ironic that Governor Bobby Jindal appointed me in 2013 to my position as chairman inasmuch as I was an early and frequent critic of gaming in the nascent years.”

Overcoming the � nancial challenges of an underfunded agency while at State Police, he has transformed that experience into a good common sense regulatory environment, where operators can be successful. Reiterating his regulatory philosophy, he

says, “I realize that an oppressive regulatory environment can kill an industry. Gaming remains one of the most heavily regulated business sectors in the country and for good reason. But the threats and vulnerabilities inherent in gaming have changed over time. Few would argue that the mature, main stream gaming industry of today is far di� erent than it was a quarter century ago.”

He has displayed a rarely seen willingness to revisit and, in some cases, reduce long ago imposed burdens placed on some casino properties where those burdens have adversely impacted their ability to provide the levels of employment and capital investment that prompted the adoption of gaming legislation in Louisiana in the early 1990s.

Also, at Ronnie’s urging, a Concurrent Resolution was adopted by the Louisiana Senate and House during the regular session of the legislature in 2016 to create a Riverboat Economic Development and Gaming Task Force which Ronnie chairs. � e task force is charged with obtaining public input relative to changes in current law, rules and regulations which, among other things, would (1) generate and promote continued economic development by riverboat gaming licensees; (2) provide for greater safety for visitors and employees of riverboat casinos, (3) encourage increased capital reinvestment by riverboat gaming licensees, (4) improve and enhance the regulation of riverboat gaming licensees, and (5) make Louisiana riverboat casinos more competitive. � is is a signi� cant undertaking about which Ronnie Jones is passionate. He refers to this experience as his “greatest achievement as a regulator….”

J. Kelly Duncan of Jones Walker states, “A� er a long and distinguished career with the Louisiana State Police and other positions in State government, Ronnie seamlessly transitioned to the position of Chairman of the Louisiana Gaming Control Board where he has proven to be very well-prepared, knowledgeable and

fair in his treatment of Louisiana gaming licensees. His interest in working with the casino industry for the bene� t of both the industry and the State is readily seen in his concurrent leadership of the Riverboat Economic Development and Gaming Task Force which has been charged with making recommendations to the State legislature regarding ways to make Louisiana riverboat casinos more competitive.”

Ronnie Jones has also successfully gathered some of the most powerful industry professionals to come testify in front of his committee in an e� ort to make Louisiana a better gaming state. Although gaming in Louisiana started o� rocky, under Ronnie’s guidance, Louisiana is now considered a strong, stable, business friendly gaming market. Allen Godfrey, Executive Director of the Mississippi Gaming Commission states, “I have had the pleasure of knowing and working with Ronnie for the last four or � ve years and there is no one more passionate about his job than Ronnie. He is truly deserving of this award, and I have the utmost respect for his knowledge and integrity as a gaming regulator and a person.”

Finally, it is noteworthy that Chairman Jones has participated as a speaker at G2E and the Southern Gaming Summit, among other conferences, where his comments have always been well-received. He summarizes his view of the future of gaming in Louisiana commenting, “I think Louisiana, having endured those detestable early years, is a better place. It’s a better place for its citizens and it’s a better place for gaming to do business.” He brings the perfect balance of good business sense and irreproachable ethics to the industry in Louisiana.

Based on his many years of public service as a member of the State Police and the many task forces he has been appointed to and personal accomplishments as an adjunct professor, Chairman Ronnie Jones is indeed a worthy recipient of this award.

Regulator of the Year 2017 – North America

Ronnie JonesChairman, Louisiana Gaming Control Board


Terry Hale has worked for the Seminole Nation Gaming Agency since November 2007. Terry started in the Surveillance department as a Surveillance Operator where he worked for more than three (3) years and he learned the National Indian Gaming Commission’s (NIGC) Minimum Internal Control Standards (MICS), the Tribal Internal Control Standards (TICS), and the Gaming Operations, System of Internal Control Standards (SICS).

In 2011, Mr. Hale took his knowledge of learning all the regulations while in Surveillance and used them to further his experience in Compliance. While in Compliance, he learned every aspect of gaming machine so� ware testing, gaming machine par sheets, understanding the di� erence between Class II and Class III gaming machines. He was a big part of the opening of the Seminole Nation Casino expansion in October 2012.

Terry Hale was appointed the Deputy Chief Gaming Regulator in December 2015, and when the Chief Gaming Regulator was excused from his position in April 2016, Terry was named the

Interim Chief Regulator during a time period that the Nation faced more than 27 alleged violations, potential � nes and closure. It was a dark time. � e 28 member Seminole Nation General Council terminated the Commissioners and the Gaming Enterprises leadership and worked hard to address lingering problems. Mr. Hale worked tirelessly to address the areas of concern, rebut areas where the National Indian Gaming Commission had it wrong and bring the Nation’s three casinos into full compliance. � e casinos stayed open and the Nation paid no � nes. � e NIGC li� ed the NOV in December 2016. Terry Hale helped disprove many purported violations with exemplary e� orts under very di� cult circumstances.

Of this time in his career, Terry Hale states, “A� er I was the Interim Chief Regulator for only a month, the Seminole Nation was issued a Notice of Violation from the National Indian Gaming Commission. I believe the Settlement Agreement with the NIGC and accomplishing that our Gaming Facilities

stayed open with the help from the Gaming Agency and Gaming Enterprise sta� are the greatest achievement I have done.”

In the spring of 2017 the Oklahoma Tribal Gaming Regulators Association awarded Mr. Hale a special commendation recognizing his experience and expertise. Terry continues to strive to learn and share his knowledge with all his peers to help the Seminole Nation Gaming Agency to always honor the past, protect the future and lead the nation to a better tomorrow.

When asked what advice he wishes to share with gaming attorneys, industry executives, educators and other regulators, Terry Hale comments, “ To always remember to keep your head up when times are rough. If you do not have the answer to a question, reach out to your peers; they may have the answer ready for you.” He further shares a � nal word to his gaming organization, “Always remember we all work for the same goal, to better our Tribe and the Tribal People. I am a proud member of the Seminole Nation of Oklahoma.”

� is year Indian Country was presented with two outstanding candidates that were equally deserving of selection based upon the Regulator of the Year criteria, particularly in regard to their contributions in enhancing the professionalism of tribal gaming regulatory authorities. As such, David Vialpando, Chairman of the Santa Ysabel Gaming Commission in California, and Terry Hale, past Interim Chief Gaming Regulator of the Seminole Nation of Oklahoma, are recognized as Co-Regulators of the Year, Indian Country for 2017. Both Mr. Vialpando and Mr. Hale exemplify

the very best of tribal gaming regulation today, and each has been active in promoting best practices for tribal regulators as part of their participation and leadership in state and national tribal gaming regulators’ associations.

Kevin Quigley of Foley & Quigley PLC states, “� e IMGL is proud to recognize the central role that these tribal gaming regulators have in regulating the $31 billion Indian gaming industry to ensure fair play and honest gaming operations for all patrons.”


Terry HaleRegulator of the Seminole Nation of Oklahoma

Seminole Nation Gaming Agency Deputy Chief Gaming Regulator/Compliance Manager.

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David Vialpando, Chairman of the Iipay Nation of Santa Ysabel Gaming Commission and Director of Gaming Programs for OnCourse Learning, is committed to the highest standards of professionalism and integrity in the gaming regulatory � eld. In turn, he has been a strong advocate for respecting the professionalism and integrity of other tribal gaming agencies throughout Indian country and their role as the primary regulators of Indian gaming under IGRA. Chairman Vialpando states, “Gaming regulators are the sentries guarding the integrity of gaming on behalf of the casino patron and protecting casino assets on behalf of tribal communities.”

David is well respected within the tribal gaming regulators and industry group and has lead the way in cra� ing and promoting tribal regulations for new and innovative gaming products for tribal casinos. In particular, David has led the way in adopting “gold standard” regulations for licensing and classifying Class II gaming systems. He is a frequent author and seminar panelist on regulatory issues at many Indian gaming related conferences held throughout the country.

When asked what he feels is his most meaningful achievement as a regulator, David states, “My greatest achievement has been the friendships and network of dedicated, passionate professional colleagues I have amassed over the years, which represent the people I can count on for counsel and advice in providing the best service I can possibly provide to the Iipay Nation of Santa Ysabel and the community of tribal gaming regulators. � e most honorable, sel� ess individuals in

this country’s workforce can be found in the tribal gaming industry.”

Chairman Vialpando has past law enforcement experience on behalf of the State of California and also extensive experience in Indian gaming regulation as both a state agent and as a tribal gaming regulator. � is combination gives him a unique perspective on Indian gaming regulation issues and practices. He states, “Coming from law enforcement, including two decades working in drug law enforcement, entering the gaming industry as a regulator and law enforcement o� cer was an opportunity to work in a legal industry with which I was unfamiliar, but which in terms of crimes impacting the industry (gangs, cheats, thieves, and criminals who prey on our citizens), I felt I could make a di� erence and have a positive impact on the safety of the gaming community.”

He also is a proli� c writer having many publications and presentations to his credit and is a member of an adjunct faculty teaching Criminal Justice courses where his vast experience in law enforcement and as a special agent for the California Department of Justice has served him well.

Notwithstanding his vast experience in law enforcement and gaming, Chairman Vialpando candidly acknowledges the challenges in being a regulator. He states, “Two issues represent the greatest challenge I’ve experienced as a tribal gaming regulator: overcoming the lack of con� dence and faith by state and federal government agency gaming regulators and attorneys in the ability of tribal gaming regulators to ensure the accountability and legal conduct of gaming on sovereign

lands, and forecasting the challenges for regulators in managing evolving trends in gaming, such as social gaming, skill-based gaming, daily fantasy sports, and I-gaming.” By also serving as Director of Gaming Programs for OnCourse Learning, Dave Vialpando is helping OCL bring cutting-edge E-learning gaming courses to the industry. He believes that leveraging technology, such as digital surveillance analytics, digital employee onboarding, and e-learning and compliance education, represents the future of gaming regulation.

When discussing the regulation of the industry with Chairman Vialpando, one quickly realizes that he is not only a great leader in his � eld but also most articulate in expressing his view regarding gaming regulation. He shares the following advice, “Gaming operators and gaming regulators are the o� ense and defense on the same team working hard to ensure a winning season. � e gaming regulatory agency able to establish the connection with casino management stressing the importance of accountability, integrity, and compliance realizes greater success in accomplishing the goals of the enterprise.”

Finally, Chairman Vialpando shares the following advice with IMGL publication readers, “In its most desirable form, the gaming industry is an amalgam of diverse disciplines, sta� ed with tremendously talented professionals, coming together to serve their consumer base and share the rewards of their labor through philanthropic endeavors which bene� t underserved communities and individuals in our society. In short, gaming is an industry to which we can all be proud to dedicate our professional lives.”

David VialpandoChairman Santa Ysabel Gaming Commission

Director of Gaming Programs, OnCourse Learning



In 2008, Birgitte Sand was appointed to her current position as Director of the Danish Gambling Authority a� er being a long-standing member of the Executive Board of the National Tax Administration in Copenhagen. She began her career in the Danish Court of Taxation but has since then covered a wide range of di� erent tasks and management positions in the Ministry of Taxation. Her experiences span from legal advice on corporate tax structures and taxation of private companies and property to the central IT department, and furthermore include projects regarding leadership, innovation, strategy, change of organizational structures and the development of a nationwide user-friendly IT solution for salary payments. She has been a long-standing member of the board coordinating the nationwide tax compliance projects.

More recently, Birgitte Sand has been responsible for the successful implementation of a liberalisation of the Danish Gambling Market. � e results show that the markets are now stable, highly compliant and well-functioning. Jamie Nettleton of Addisons Sydney and Vice President of IMGL states, “Birgitte deserves recognition for her untiring e� orts to promote Denmark as a best practice precedent for other jurisdictions, whether in Europe or globally, considering a licensing regime for gambling.”

� e Danish Gambling Authority is responsible for issuing licenses and furthermore supervising and controlling a wide range of gaming providers that stretch from land-based

casinos to lotteries, gaming machines, charity lotteries, betting, online casino, public poker tournaments and horse racing. Of this position, she states, “I enjoy tremendously getting outside the regulatory comfort zone and being challenged by the industry presenting new products and new ways of operating that do not necessarily � t into any existing framework. A good working relationship calls for trust, cooperation and willingness to � nd solutions. I have the highest regard for jurisdictions that seek to create a framework where gambling can prosper in a legal manner and players at the same time experience a fair and transparent market.”

Over the last year, Birgitte has been challenged with a government dictated relocation of the Gambling Authority and has successfully overseen the relocation and recruitment of new sta� for the authority. Of the variety of challenges and opportunities she has faced in her gaming career, she says, “Initially, it felt like entering a dark cave; turn on the torch and realize you stand in a gold mine - of opportunities!”

Birgitte Sand holds a master’s degree in Law from the University of Copenhagen, and she has also completed an INSEAD Executive Programme. She has been very active as a speaker in international industry conferences and by doing so she is helping to bridge the gap between industry (commercial) professionals and government regulators. She candidly remarks, “We, as regulators, have to admit to the fact that we do not always have the resources and skills to understand gaming in the same way the industry does. Once

we are clear about industry needs, we can create a cooperative environment with the industry in order to create a platform where compromises and realistic solutions can be agreed, and gambling legislation understood and respected.”

Since 2011 Birgitte Sand has been a member of the International Association of Gaming Regulators (IAGR) Board of Trustees and served as President from October 2014 to October 2015. She is still serving as a trustee and furthermore as chair of the subcommittee for statistics. She states, “I have had the privilege to learn from fellow regulators around the world how important it is to create platforms for cooperation and development between industry, sport organizations, legislators and regulators if ever we wish to � ght illegal gambling and crime in gambling. It makes a lot of sense to me if my DGA colleagues and I can contribute to building a strong defence against the bad elements in the gaming industry by sharing our experiences and taking part in an honest and open exchange of successes - and failures.”

Birgitte has over the years supported IMGL by attending and speaking at many IMGL conferences and is co-chair of the IMGL 2017 autumn conference in Copenhagen. Justin Franssen of Kal� Katz and Franssen says, “� e Danish regulatory set up as well as the role of the Danish regulator inspires many in the gaming industry. Birgitte continues to be deeply engaged in various industry events across the globe. Not only does she make sure the Danish authority stays on top of regulatory developments she also is super friendly and approachable.”

Regulator of the Year 2017 – Europe

Birgitte SandDirector, Danish Gambling Authority

Past IAGR president 2014-2015

For more information on gaming’s utopia visit: icetotallygaming.com#passporttoparadice

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ICE A4 DPS revised1.indd All Pages 30/08/2017 09:42


ermany has become notorious for its dysfunctional regulation of igaming under the Interstate Treaty on Gambling, the overarching regulatory framework which broadly

bans online gambling with the exception of state lottery products and a restrictive licensing regime for sports betting. Regulatory enforcement of compliance with AML and data protection laws may be seen as the dark clouds ahead for the igaming industry in 2018. Recent announcements of Germany’s northernmost state Schleswig-Holstein to (again) push for a broader reform of gambling regulation, however, suggest that there is also a silver lining on the regulatory horizon.

� is article takes a look into the regulatory “crystal ball” to foresee the three key regulatory challenges the igaming industry will be facing next year…

AML – a “big stick” for regulators?� e deadline for implementing the EU’s 4th Anti-Money-Laundering Directive (the ‘4AMLD’) has already expired on 26 June 2017, and the federal Anti-Money-Laundering Act (the ‘AML Act’) came into force on that same day. 1 Whilst the AML Act excludes signi� cant parts of land-based gambling, including retail lotteries and slot machine gambling in arcade halls, sports betting and online gambling in general are subject to the scope of the law.

� e new key requirements also a� ect gambling operations, including the obligation to implement a risk management that is based on a comprehensive risk analysis of the business of vulnerabilities to money laundering and � nancing of terrorism, internal safeguards such as appointment of an AML o� cer, vetting and training of sta� as well as thorough requirements to KYC and restrictions to payments. 2 � e latter might cause compliance teams across the igaming industry quite a headache in that any anonymous means of payments, such as cash

vouchers, are banned and the amount of credit card transactions will be limited – unless the gambling operator can match the card owner with the owner of the customer account (sec. 16(4) AML Act.

Some igaming operators might be tempted to argue that they are only subject to the regulations of their country of residence, even if services are provided to customers in Germany and payment transactions originate from Germany.

In contrast, German regulators have a very clear-cut view on the issue. They consider German regulations – including AML – to apply if gambling services are provided to customers in Germany through a Germany-facing website. Some regulators, like the regulator of Lower Saxony in Northern Germany, have already stated that they consider the new AML law to be a “big stick and enforcing AML compliance is seen as a “chance to finally crack down on the unlawful online gambling sector”, as one of the regulators put it in a conversation with one of the authors.

Indeed the sanctions provided for in the AML Act may be serious. In severe, systematic cases, fines may reach up to EUR 1 million or involve the skimming of the twofold benefit obtained from an AML offence (sec. 56(2) AML Act). It is noteworthy that the jurisprudence of many appeal courts is known to be rather “regulator-friendly”, making it more likely that they would also rubber-stamp AML enforcement measures. 3

As a consequence, companies operating in

G

1 An overview of the 4AMLD is included in Spitz/Maier, The 4th Anti-Money-

Laundering Directive: European eff orts to halt the laundromat, American Gaming

Lawyer, 2017 Fall Issue.

2 For a more detailed overview of the AML Act, see Hofmann/Spitz/Maier,

Implementing the 4th AML Directive: New challenges ahead for the German

market, European Gaming Lawyer, 2017 Spring Issue.

3 As an example for more recent “anti-gambling” jurisprudence: Higher

Administrative Court of Lower Saxony, decision of 17 August 2016, fi le no. 11

ME 61/16. The Higher Administrative Court is the appeal court in administrative

jurisprudence.

Joerg Hofmann

Matthias Spitz

Jessica Maier


Germany are well-advised to mitigate risks from AML enforcement by seeking ways to adapt to the new regulations in a business-friendly way.

The GDPR – not just a bad omen!You certainly do not need a crystal ball to foresee that the implementation of the General Data Protection Regulation (the ‘GDPR’) 4 will become one of the big regulatory challenges the igaming industry will be facing in 2018 – yet, tighter rules on the processing of personal data for many in the igaming industry appear to be more of a bad omen than a legal reality. Since the GDPR is a regulation, its rules will be directly apply within the EU upon its entry into force on 25 May 2018.

�e GDPR aims at harmonising the data protection law within the EU not only by modernising the legal framework for data protection law, but also to unify the diverging practice of data protection agencies across the EU. 5 Consequently, the GDPR emphasises the requirement of consent (Art. 6 GDPR) of the individual a�ected by the processing of data. A consent that comprises the purpose of the transfer of personal data has to be obtained, unless, for example, the data transfer is necessary

to ful�l a contract with the individual concerned. It is stipulated that the request for consent has to be presented in a manner which is clearly distinguishable from other matters in an “intelligible and easily accessible form” (Art. 7(2) GDPR) – failing which the corresponding declaration shall not be binding and, hence, the consent cannot be deemed to be obtained. Albeit it remains to be seen how the Member States will transpose these requirements in detail, it appears highly questionable whether common practice with the registration process, where the consent to data processing is “hidden” somewhere in the T&Cs, will su�ce from May 2018 onwards. �is also applies to the data processing through third parties.

Transferring data to third countries – you shall not pass!Another key restriction applies to so-called “third countries”. Essentially, personal data may only be transferred from EU-based operations if the third country where the recipient is located ensures an adequate level of data protection (Art. 45 GDPR). Where the European Commission has not con�rmed the adequacy of data protection standards, personal data may

only be transferred to a third country if appropriate legal safeguards, such as binding corporate rules, standard data protection or contractual clauses, are in place.

�e amounts of administrative �nes for infringement of GDPR requirements can be massive as they may range up to EUR 20 million or 4% of the total worldwide annual turnover of the preceding �nancial year, whichever is higher (Art. 83 GDPR).

It is foreseeable that the German Data Protection Commissioners – who in the past have not shied away from using sharp words in their criticism of social media giants or the Safe Harbor Agreement with the US for shortcomings in data protection 6 – will not waste time in enforcing the new rules.

Considering the signi�cant risks that may arise from non-compliance, including �nancial risks from sanctions and jeopardising existing licences that tie in with data protection rules, it is recommended to review data protection policies and measures in due time before May 2018.

Gambling regulation under the Interstate Treaty: There’s no vision there at allRoughly a year ago, in October 2016, the Prime Ministers of the German states agreed on an amendment to the Interstate Treaty on Gambling (the ‘Interstate Treaty’). A pivotal part of the Interstate Treaty, the licensing process for sports betting, has been held to infringe EU law, including the freedom to provide services and the principle of transparency. 7 As a consequence, none of the 20 licences for sports betting have been issued to date. Rather than implementing

4 Regulation (EU) 2016/679 of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the

free movement of such data (General Data Protection Regulation), available at:

http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32016R0679&from=DE

5 Cf. the 9th recital of the GDPR: “The objectives and principles of Directive 95/46/EC remain sound, but it has not prevented fragmentation in

the implementation of data protection across the Union, legal uncertainly or a widespread public perception that there are significant risks

to the protection of natural persons, in particular with regard to online activity.”

6 E.g. the Data Protection Commissioner of Schleswig-Holstein: https://www.datenschutzzentrum.de/artikel/221-ULD-empfiehlt-nach-dem-

WhatsApp-Facebook-Deal-Wechseln.html#extended; https://www.datenschutzzentrum.de/artikel/952-Safe-Harbor-ist-keine-ausreichende-

Grundlage-fuer-Datenuebermittlung-in-die-USA-Schlussantrag-im-Verfahren-vor-dem-EuGH-spricht-deutliche-Sprache.html#extended

7 Including the Court of Justice of the EU in the judgment of 4 February 2016 in case C-336/14, Sebat Ince.


a more visionary reform of the Treaty – as suggested by the state of Hesse 8 – the majority pushed for a so-called “minimally invasive reform” which would broadly conserve the Interstate Treaty. �e corresponding Amendment Treaty 9 removes the limit to 20 sports betting licences and provides for the issuance of up to 35 “interim licences” to all the applicants that had passed stage 2 of the licensing process as of 1 January 2018 – provided that those applicants comply with key restrictions under the Interstate Treaty, including the ban on online casino and dropping important bet types in in-play betting. Further, the Amendment Treaty reserved the right of the German states to return to a state monopoly in gambling a�er its expiry in 2021. Consequently, enthusiasm within the industry about these regulatory prospects for 2018 has been very limited – to say the least.

Gaming in the North – Günther is comingGermany’s northernmost state Schleswig-Holstein (‘SH’) already played a rebel role in 2011, when it refused to sign the Interstate Treaty and enacted its own Gambling Act which closely resembled the Danish model. �is year, a surprising turn in state elections brought the political parties responsible for the original SH Gambling Act – Conservatives and

Liberals – back in power. As for the SH Government’s agenda in gambling policy, newly elected Prime Minister Daniel Günther seems to be determined to seek a new approach. �e agreement of the government coalition (which also involves the Green party) states:

“�e coalition will not approve of the Second Interstate Treaty Amending the Interstate Treaty in parliament. Schleswig-Holstein will terminate the Interstate Treaty on Gambling and, together with other states (e.g. Hesse, Rhineland-Palatinate and North Rhine Westphalia), it will seek a viable, EU law-compliant solution for the entire sector of sports betting including online casino gaming as well as poker gaming which will be oriented towards the regulations of the Gambling Act Schleswig-Holstein that has been in force until 2013.” 10

Schleswig-Holstein 2.0Since the Amendment Treaty must be rati�ed by all 16 state parliaments in Germany by 31 December 2017, SH not ratifying the Amendment Treaty will cause the “minimally invasive reform” to fail. It is expected that this will lead to a continuation of the status quo in 2018, i.e. an unregulated German market in sports betting and online casino – a situation which, however, most of the igaming operators have been able to handle well over the past decade.

SH’s initiative is also likely to give fresh impetus to a broader political discussion throughout 2018 about reasonable regulation of gambling, including the licensing of online casino and sports betting.

To conclude, even if, gazing into the crystal ball, some dark enforcement clouds overshadowing the area of compliance may be visible, there is also a silver lining on the licensing horizon which might provide new opportunities to the igaming industry in Germany.

Dr Joerg Hofmann is a Senior Partner and the Head of the Gaming Law practice at MELCHERS and Immediate Past President of the IMGL. He can be reached by email: [email protected]

Dr Matthias Spitz is a Senior Partner at MELCHERS and Member of the IMGL. He can be reached by email: [email protected]

Jessica Maier, LL.M. is a gaming attorney with MELCHERS law firm. She can be reached by email: [email protected]

8 The Guidelines for Modern Regulation of Gambling of the Hessian Minister of the Interior of 8 October 2015 are available at: https://www.

hessen.de/pressearchiv/pressemitteilung/hessen-macht-konkrete-vorschlaege-fuer-eine-moderne-gluecksspielregulierun-0

9 The “Second Interstate Treaty amending the Interstate Treaty on Gambling” of 28 October 2016.

10 The SH coalition agreement is available in the German language at: http://www.fdp-lv-sh.de/sites/default/files/uploads/2017/06/16/

koalitionsvertrag2017print.pdf

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