Latin America and Europe

written by I. Nelson Rose

© Copyright 2009, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I. Nelson Rose,

Prepared for G2E’s “Global Development Opportunities – An In-Depth Workshop”

I have been asked to focus during this workshop on Latin America and Europe. But I wanted to start by looking at the trends that are impacting legal gaming in every part of the world. Legal gambling is spreading in both developed as well as developing countries; everywhere, in fact, except the Muslim nations and parts of Africa, with some obvious exceptions.

If the future depended solely on advances in technology, the future of gambling could be summed up in two words: “video poker.” The video poker machine is the closest thing we have to the perfect gambling device. It is fast, fun, easy to learn, has the potential for large jackpots, allows even novice players to gamble without being intimidated, and has at least the illusion that skillful participation will change the results. Even non-poker slot machines now look like video poker, with probably 70% of machines having video screens showing three rows of five symbols, often with Capital “Ks” and “Qs.”

But we are not about to see legal video poker machines in every corner grocery store, just as in the U.S. we are not going to see sports betting on television. The technology already exists, but other important factors will shape what forms of gambling are allowed under the law.

The future of gambling depends not entirely upon technical machinery. The proliferation of legal gambling is shaped by such factors as historical legal baggage, feelings of morality and tradition, demographics, social and psychological factors, and pure irrationality.

Gambling spreads in a haphazard manner that is only partially predictable. In the broadest view, the future of legal gambling can be extrapolated by looking at patterns established in the past. At the very least, we can look at what has gone before to see why some campaigns for legalization succeed, while others fail.

Reasons for the Spread of Legal Gambling

1) Legal gambling proliferates when the arguments pro and con shift from whether it is moral, to whether it will cause more good than harm. In much of North America and Europe, the morality argument is almost dead. It is no longer considered acceptable to oppose gambling on the ground that it is immoral. This reflects a general trend in these areas of the rise of situational ethics. But gambling opponents also lost their main moral spokesmen. Once churches started running bingo games, they lost the right to say that betting on a horse race is a sin. Government no longer enforces morals. Ninety years ago all gambling was illegal and it was a crime to sell someone a drink. Today, government is selling lottery tickets and taking bets on football games, and there is talk of legalizing, or at least decriminalizing, drugs. With no one to say what is right or wrong, everything has become a cost/benefit analysis. And gambling makes money, even accounting for social costs, particularly if it is run as a monopoly. It is certainly less painful to start another game than to raise taxes.

Europe is having more trouble in this area than the rest of the world. It is quite bizarre to walk through Amsterdam’s Red Light District, with prostitutes posing in lighted windows and marijuana openly advertised, and realize this is a country that still outlaws Internet poker. The recent decision by the European Court of Justice (“ECJ”) in the Santa Casa case upheld the right of this Portuguese charity to have a monopoly on sports betting and lotteries, in part because Santa Casa said that it was actually trying to limit gambling, and devoting all of the profits to good causes.

The morality argument may be dead in Europe, but only dying in South America, due to the continued heavy influence and opposition to gambling, by the Catholic Church. But as the Church to lose its power here, as in most of the rest of the world, we can expect legal gambling, which is already widespread, to continue to proliferate.

2) Government has said it is okay. With all the talk about forbidden fruit, it is important to remember that most people will not break the law, even if they will not get caught; drivers stop at red lights at 3 a.m. in the open desert. There are also millions of adults who believe government knows best and will protect them; it is not a coincidence that George Orwell called his 1984 dystopia dictator “Big Brother.” Government-run lotteries in Europe and South America are much more significant parts of their local economies. And government licenses, or–at least is believed by locals to have licensed–gaming operators.

3) The outrageous becomes acceptable if taken in small doses. This is the tremendous power of incremental change. The first state lottery of the 20th century in America, the New Hampshire Sweepstakes in 1964, cost $3, required players to fill out a form and was held two times a year; it was a financial failure. New York followed; but it, too, did not live up to its expectations. But other operators, particularly New Jersey, discovered the secret of marketing gambling — making lottery tickets cheap and drawings frequent. In a series of short steps, twice-a-year to weekly to daily drawings, to rub-off tickets, we have arrived at Video Lottery Terminals, where the lottery player can put money into a machine and be paid on the spot. Thirty years ago it would have been unthinkable that states would be operating such slot machines.

4) The domino effect. New Hampshire was first with a state lottery this century, but 80% of its players came from New York, Massachusetts and Connecticut. The second lottery was New York, and the third, its neighbor, New Jersey. When every state has lotteries, the first to introduce off-track betting or casinos has an advantage. In the next few years, the non-lottery states will fall like dominoes; in fact, Texas was the last prize worth pursuing — the remaining non-lottery states have small populations. Similarly, riverboat casinos have spread like ripples in a pool, throughout the middle of the U.S. There is not a country left in Europe that does not have legal gaming. Even though many casinos were opened to grab the disposable income of their neighboring states, by being built close to borders, almost all have discovered that local patrons are required, if they want to succeed.

5) The easy money is not so easy; governments find themselves committed to expansion in order to continue to receive the gambling revenues they projected. Lottery tickets in particular tend to be poor consumer items — people buy them for a while and stop. States are forced constantly to come up with more promotions and new games. States like Iowa, which thought they could sit back and make millions on $5 maximum casinos on riverboats, find that the state has to constantly support the enterprises, particularly during winter, and come to the rescue of failing operations. After half its casino riverboats sailed south, the Iowa Legislature raised the betting limits to match that in nearby Illinois.

6) Gambling begets gambling. Players always want games that are faster and easier, with at least the illusion of player participation. The faster and bigger versions of the state lottery have almost wiped out the instant ticket games. Slow casino table games like roulette are being replaced by slot/table hybrids, like Caribbean Stud. Many casinos are becoming nothing more than video slot machine warehouses. Eventually, we will see video poker machines and lottery terminals in every city, even if not on every street corner.

7) Competition for the gambling dollar is fierce. Casinos in Nevada have had to introduce Megabucks and million dollar Keno games to compete against California’s lottery. The racing industry has been particularly hard hit by the introduction of lotteries and tribal casinos. The surviving tracks are asking state legislatures to let them have slot machines. And some legislatures, like Iowa’s, have complied. With slots, the tracks are spectacularly successful; without slots, they often close, putting hundreds of people out of work. But racing needs more. In May 1997 the Association of Racing Commissioners International approved a resolution urging Congress not to outlaw, but to pass legislation regulating, gambling on the Internet, “to ensure… racing industry receives the appropriate portion of such handle.” Congress complied in December 2000.

8) Operators push to the limits. If the law allows “pull-tabs,” operators will construct devices with a slot and video screen and call the machines “video pull-tabs.” The Internet is the next gaming frontier. Technology is wreaking havoc with the law. The speed and ease of communication over the Internet have made state and even national boundaries little more than lines on a map. The wagering may be illegal, but it also may be impossible to stop. Meanwhile, casino gambling will continue to come in the back door through acceptable alternatives, such as riverboats, or as political compromises. Latin America is the best example of entrepreneurs finding, or creating, opportunities, for expansion. Class II machines have proliferated, often aided by favorable court decisions.

Class II machines, also called bingos and lottery number machines, are the fastest growing forms of gambling. Technically, there is no such thing, since there is no Class I or Class III. The name derives from the U.S. Indian Gaming Regulatory Act, which allows tribes to operate electronic aids to bingo without a tribal-state compact, but not true slot machines. This has led to great inventiveness from bingo machine manufacturers, and numerous legal decisions on what is a Class II, as opposed to a Class III, machine. Although some of the video gaming devices operating in Latin American might not qualify as Class II in the U.S., it is convenient to use that name, to separate these from true casino slot machines.

Latin America

Latin America has had a long history of recurring bouts of economic and economic instability. This makes long-term, and sometimes even short-term, predictions difficult. In the past, investors have been hit by occasional government expropriation, and, more often, runaway inflation. I have currency left over from my first trip to Argentina, to address the International Bar Association on gambling and the law, in 1988: 350 australes, then worth more than US$20.00. The austral was replace in 1991, at a conversion rate of one peso for 10,000 Australes. Which means that during my most recent trip to Buenos Aires, last month, with the Argentine peso worth about 26 cents U.S., my australes, if they could be converted, would now be worth less than a penny.

Legal gambling generates enormous amounts of untraceable cash and requires strict regulation to prevent cheating. These are problematic in a region with a history of widespread corruption. Even today, many local residents believe that the police are venal. And some believe that the system is rigged from top to bottom. Some reformers oppose expanding legalized gambling, even when they acknowledge that it would create jobs and raise much needed revenue, because they fear the newly created wealth would go only to well-connected insiders.

The expansion of democracy throughout Latin America has eased some of this concern. Dictators can, of course, be pro- or anti- gaming. But they do tend to be corrupt, and to have ties with undesireables. The casinos that flourished in Cuba during the 1950s, under Fulgencio Batista, were notorious for their tie with organized crime, particularly Meyer Lansky. Fidel Castro closed them all down.

But the days of the strongmen, Spanish caudillos and Portuguese caudilhos, are fading. Even the Castro brothers will soon be gone. The imposition of Communism wrecked Cuba’s economy, which depended upon tourism as much as agriculture. I predict that within 10 years, Cuba will once again have legal casinos.

The Argentine Republic – is a federation of 23 provinces and an autonomous city, Buenos Aires. This makes for interesting jurisdictional questions. For example, Buenos Aires has 24 separate authorities regulating, and sometimes operating, games of chance. Yet, there is a casino on a boat in the Puerto Madero barrio, which is undoubtedly in the city, which does not come under the city’s control. This is because it floats on the Río de la Plata, and the river was declared to be under the jurisdiction of the federal government. The license for the floating casino caused a political stink, when the President of Argentina simply declared that he had the power to issue it, and renew it, to a close friend and supporter. There are large and small casinos throughout the country, the most in South America, more than 80. I visited two of moderate size with both gaming tables and machines in the small tourist town near Iguazú Falls.

Because each jurisdiction sets its own rules, regulation varies widely. Argentina faces the possibility of massive growth. Gaming machines are being introduced as bingos. And the governor of Buenos Aires has announced that he thinks selling additional casino licenses, without putting in additional controls or licensing, is a good way to raise money.

Federative Republic of Brazil – Brazil is the big prize, waiting for legal gaming. Not only the largest country in South America, Brazil is the fifth most populous country in the world. Yet, it has no casinos, and not much in the form of other gambling. As recently as two years ago, there were 1,500 bingo halls with as many as 130,000 gaming machines. Most of these were licensed by the federal government, but many were state-licensed, or even unlicensed, yet allowed to remain open by court decree. Scandals, including bribed judges and politicians, led to a new federal law and the termination of all but a small handful, which are still litigating the issue. State lotteries suffered the same fate; the Federal Court ruled that the 1998 Brazilian Constitution forbad states and even local courts from deciding whether gambling was legal. Although the gray-market slot machines were closed down, also lost were hundred of thousands of jobs. Politically, this is a major problem. And it looks like it is about to be fixed. Bill 270/2003 is successfully working its way through the Federal Legislature, passing through committees with large margins. It is not a sure thing, even though it has wide support, including from President Luiz Inacio “Lula” da Silva. But, if adopted, it will allow the reopening of one bingo hall for every 100,000 residents, which would allow almost 2,000 halls.

Republic of Chile – Chile is the present boom area of South American gaming, with a casino law that is less than five years old. Licenses are issued by the Superintendent of Gaming Casinos and are good for 15 years, and renewable. The licensing system is designed to be objective, looking not only in the background of the applicants and sources of money, but what the project promises to accomplish in creating jobs and promoting tourism. The statutory law limits the number of casinos to 24 and is designed to ensure that every region of the country will have at least one. In fact, in many cases, it is only one, giving the operators a legal monopoly. Also, Chile is normally friendly to foreign investors: It has a law that expressly states that foreign investors cannot be discriminated against. It will be interesting to see what happens when this law collides with the licensing law, which might favor local applicants.

Republic of Colombia – Colombia appears to be second, only to Argentina, in the number of casinos within its borders. James Kilsby, in, estimated in February 2008, that there were more than 3,000 casinos, bingo halls and slot machine parlors in Colombia. However, as puts it, “this is difficult to authenticate due to political issues in the country.” Colombia modernized its government with a new Constitution in 1991, creating changes and continuing uncertainty over exactly who has power for what. For the gaming industry, the most important development was the apparent increase in control over almost all forms of gambling given to department governors, municipal mayors and other local administrators. On the other hand, on May 30, 2008, Colombia President Alvaro Uribe signed Decree 1905 into law, giving the federal government’s ETESA (Empresa Territorial Para la Salud) the power to consolidate the country’s legal gambling. ETESA is moving ahead, slowly, with the stated goals of instilling confidence in the integrity of gambling, eliminating illegal slot machines, and forcing consolidation. Major operators like Codere and CIRSA, and smaller ones like Thunderbird, as well as suppliers like Cyberview Technology and Synergex, and even Gtech, have either announced their intentions or already joined this growing market. Colombia looks particularly attractive, the more its neighbor, Venezula, suffers political and economic chaos under the unstable Hugo Chavez.

Republic of Costa Rica – Costa Rica is the home for much of the licensed Internet sports betting operations aimed at the U.S. market. Its land-based industry is limited to casinos, about 40 at present, which include slot machines and table games, including poker. The gaming industry in Costa Rica is relatively mature, yet still legally in flux, due to constantly changing legal requirements and interpretations. The present legal structure for gaming was set down in 1987, limiting casinos to hotels with at least three stars, with licenses granted by the Tourist Institute of Costa Rica. This law was designed to eliminating gaming rooms and slot machine arcades. Unlike most other countries, gambling is not a state or provincial matter, because the Supreme Court eviscerated the provincial governments: The seven provinces still have governors, appointed by the President, but there are no provincial assemblies. So, the control of gaming defaulted to municipalities. The city of San Jose used this power in 2000 to issue regulations covering video gaming machines. Meanwhile, the federal government continues to issue decrees, covering such things as opening and closing times. The unicameral national legislature is studying a proposal to bring more stability to the legal structure.

Republic of Ecuador – On paper, Ecuador has the traditional model of casinos, with both slot machines and table games, limited to expensive tourists hotels. In reality, years of running court battles have allowed gaming devices to be opened in arcades in many parts of the country. The 35 authorized casinos have been licensed by the Ministry of Tourism. The system, at the moment, is not too complex. However, Ecuador has decided to adopt many of the regulations of its neighbor, Peru. This will increase controls, but also costs to operators.

United Mexican States – Mexico allows sports betting, wagers on dog and horse races, cockfights, lotteries, and bingo. But the big boom in legal gaming is electronic machines, commonly called Class II, due, in part, to confusion over what is and is not legal. In 2004, I was hired by the Federal Government of Mexico to be an expert witness in the first dispute heard under NAFTA (North American Free Trade Agreement) involving slot machines. An American company, Thunderbird, complained that Mexico had closed down its gaming parlor while letting identical parlors remain open nearby. The legal dispute revolved around whether the machines were games of skill – the NAFTA tribunal agreed with my analysis that they were not. But this did not necessarily mean that the locally owned competing gaming devices were also illegal. They might have been, and the police might have been bribed. But some operators were obtaining court orders allowing them to stay open, while the issue of what machines were allowed was being considered by all segments of government. Court decisions and decisions by federal ministries, as well as a 2004 federal Law of Gaming and Raffles, has now led to some temporary stability, and the opening of Class II casinos. On September 3, 2008, in Mexico City, I addressed the inaugural conference of a new organization set up by the gaming operators. The operators understand their legal status; rather than call themselves “licensees,” they chose the more correct designation “permittees”: “Asociación de Permisionarios de Juegos y Sorteos,” which could be translated as Association of Permittees of Gaming and Raffles. A more complete regulatory system will undoubted develop in the coming years.

Republic of Paraguay – Under Law No. 1016, Paraguay allows all forms of gambling, so long as they are operated in accordance with regulations from the National Commission on Games of Chance. Expressly permitted are casinos, with table games and video games; all types of lotteries; raffles; bingo, using 90 numbers, not the U.S. 75; quinella; promotional sweepstakes; electronic games of chance; sports betting; horse racing; and, telebingo. Most of the licenses are awarded through competitive bidding. The Act expressly gives municipal governments the exclusive authority to determine the number and types of gaming allowed for electronic gaming arcades. Casinos, on the other hand, are limited to only Asuncion and six departments, and only departments with more than 250,000 people may have more than one casino.

Republic of Peru – Peru expressly allows slot machines – there are more than 60,000 in the country – and casino table games, lotteries and betting on horse races. Issues have arisen because the law also expressly allows bingo. It also does not expressly prohibit sports betting and Internet gambling, so operators have taken this to mean they can operate without licenses. The regulation of gaming is complex and difficult to navigate. For example, some slot machines, found in arcades, come under one set of rules, while other slots, found in high-class hotels and restaurants, come under another. As another example, the government requires casino slot machines to be tied online to the Ministry of Foreign Trade and Tourism and Sunat, the tax authority. Gaming is supposedly for tourists. Casinos must obtain four separate licenses, and local governments have a great say in what can and cannot be done. Growth will probably be most noticeable with sports betting, which is still small, at the moment, although casinos and slots will continue to proliferate, since there is no law limiting their numbers.

Oriental Republic of Uruguay – Like much of the world, Uruguay allows casinos, with table games and slot machines, and recreational halls, arcades with gaming devices. It also allows bets on horse and greyhound racing, including free standing betting parlors. There are presently 11 casinos and 26 recreational halls. Legally, this gaming can only be operated by the Directorate General of Casinos; the Municipality of Montevideo; and one private company, Baluma S.A., which operates what is technically the only privately owned casino in the country, in the Hotel Conrad Punta del Este Resort and Casino. However, the governments allow private companies as partners of both casinos and recreational halls, through joint operating systems. So, Codere recently announced that it was awarded a contract from the Montevideo Town Council which will lead to a $60 million Sofitel Montevideo Casino Carrasco and Spa.

Bolivarian Republic of Venezuela – President Hugo Chávez is a controversial figure. Rather than try to describe him, I’ll simply quote his latest proclamations: 1) The country must prepare for war with Colombia; and 2) His supporters should exercise and eat healthy because “there are lots of fat people” in Venezuela; “I’m not saying fat women, because they never get fat,” he added. “Women sometimes fill out.” A socialist, he can’t quite figure out what to do about legal gambling. In 2007, the Chávez government imposed a three-year moratorium on imports of slot machines and greatly raised taxes on gaming operators. On September 9, 2008, his Ministry of People’s Power for Tourism issued Resolution DM/No.086, ordering the National Commission for Casinos, Bingo Halls and Slot Machines to stop issuing permits and licenses. Yet, on April 27, 2009, the Ministry repealed Resolution DM/No.086, without comment. Chávez isn’t much of a dictator; he couldn’t even rig the election in 2007, where 51 percent voted against giving him more power. But this year, he did win the right to unlimited terms. Since he is only 55 years old, it will probably be many years before the legal gaming industry, particularly foreign investors and operators, come back to Venezuela in force.


Unlike Latin America, the land-based gaming industry in Europe is mature, with well-established operators and legal structures. Changes, both big and small, are always being proposed. But casinos, bingo halls, racetracks and betting parlors, are slow to change, and unlikely to see widespread, dramatic developments.

The most massive project, which probably won’t ever be completely built, is the Gran Scala, approved by the regional government of Aragon in Spain in 2007. It would have 32 casinos, five theme parks, a bullring, 70 hotels, “including one modeled after the Pentagon that will be at an espionage theme park called ‘Spyland,’” according to AP reports, at an estimated cost of $25 billion.

The major problem for outsiders is not only that the competition is usually well established, but so are the governments’ social programs, which means high tax rates. Harrah’s’ attempts to team up with the successful Slovenian operator, HIT, to build a large American style casino near Venice, Italy, was defeated by the government’s inflexibility. Harrah’s has now announced it is going to try again with Slovakia.

The greatest surprise to an outside observer has been the legislative mess in the United Kingdom. Students of American law have always been a bit jealous of the way laws are made in England, where the recommendations of study commissions are actually adopted, rather than merely sitting in books on a shelf. Yet politics, and the rhetoric of gambling opponents, first delayed, then twisted, and finally defeated, many of the 175 reforms advocated by the Gambling Review Report. That Report, commonly called the Budd Report, after its chairman, Alan Budd, was published in July 2001. Yet it is still unclear, particularly in light of the current economic crisis, exactly where and when there will be new casinos.

There are a few places left in Europe without full-scale casinos. But, except for Ireland, these are in Eastern Europe, where foreign investors feel less comfortable with the relatively new capitalist and legal systems. The entry of these countries into the European Union adds some comfort. But all branches of the E.U. legal bodies have made it clear that gambling is a unique activity that is not subject to harmonization.

The repeated refusal of the E.U. to harmonize gambling is based on the recognition that even within a system designed to create a Common Market, morality and public order are, and always have been, primarily a local concern. The explicit rejection of harmonization means that Member States have great discretion on how they want to handle this morally suspect and inherently dangerous activity. It is fair to say that governments have greater rights to decide how they want to regulate gambling than they have in almost any other area of human activity, certainly more than any other economic area.

Which brings us to the big issue for Europe, Internet gaming. The European states have a long history of governmental monopolies being the only legal source of gambling within their borders. This is being continuously challenged today by companies in other member states of the E.U.: manufacturers of slot machines, operators of casinos and sports books; and, in particular, operators of Internet gaming websites.

The E.U. has made it clear that a Member State may legalize and even advertise legal gambling as a monopoly – to attract players away from unauthorized operators – to channel existing demand and raise funds for beneficial social causes. In Santa Casa, the ECJ expressly rejected the idea that a company licensed by one Member State would automatically have the right to take bets from the residents of another Member State.

The ECJ has given detailed guidance in some areas, though it announced, in the Laara case, that it is up to the high court of each individual Member State to decide whether the state’s law meets the stated objectives. For example, where the national law of Finland grants to a single Finish public body exclusive rights to operate slot machines in the national territory, it creates “an impediment to freedom to provide services.” But, “that impediment may be justified on grounds relating to the protection of consumers and the maintenance of order in society.” Except in cases of blatant discrimination, it is up to the local government to decide. Similarly, in the Zenatti case, where a U.K sports book wanted to take bets from Italy, the ECJ held, “It is for the national court [of Italy] to verify” whether Italy’s highly limited sports betting is justified. The most extreme example is Gambelli, where a licensed U.K. sports book challenged Italy’s monopoly on Internet sports betting. Even though the ECJ made it clear in its comments that if felt Italy could not justify its exclusion of other Member State’s operators on the ground that it was discouraging gambling, when Italy itself was rapidly expanding and promoting legal gambling, the Court still said it is up to the highest court of Italy to decide the question.

I have been meeting with many parties on both sides of the issue to advise them on what can, and cannot be done, about government gambling monopolies in Europe.

For example, the ECJ has thus made it clear how a Member State of the E.U. can impose restrictions on gambling operators from other Member States. The local government should clearly and expressly state the objectives its gaming legislation is intended to achieve. It is possible that the ECJ will accept justifications for restrictions raised by the government after the statutes and regulations have been enacted, as it did in the Santa Casa case. But this is dangerous. It is a better practice to list objectives and link each individual restriction with a particular objective.

It is also essential that the objectives and linkage with government restrictions be honestly made. The ECJ seemed to be angry with the claims by the Italian government in Plancanica that the objective was to restrict legal gambling, when it announced that it was going to award 1,000 licenses for sports betting, and automatically renew 329 licenses for horse books, while adding 671 more, with none going to anyone outside of Italy.

The starting point should be the reason why states regulate, and often completely prohibit, gambling. The strongest arguments are based on local morality, followed by the need for public safety. The weakest objectives are maximizing financial gain for the local operators or recipients.

Government oversight comes in many different forms. But regulation comes down to two fundamental principles:

1) The regulators must know everything they can about everyone who has any ownership interest or possible control over the operation; and

2) Systems have to be in place to track every euro: all money that is invested in the operation, taken out in profits or other ways, gambled, won and lost.

By looking at the controls on gambling that exist in states and countries around the world, it is possible to draw up a list of restrictions that should be upheld as supporting clearly stated objectives. Those objectives include:

Eliminating activities that violate the Member State’s moral and religious culture and history.

Preventing the infiltration of organized crime.

Limiting cheating, fraud and skimming.

Protecting individuals against unfair practices.

Protecting individuals from themselves, particularly the vulnerables: children and compulsive gamblers.

Controlling the expansion of gambling.

Competing with existing, unregulated operators.

Ensuring that profits from gambling operations are used for benevolent purposes.

All gambling requires strict controls. But, because Internet gambling is often quick, and always involves transactions without face-to-face contact, additional protections may be required. The ECJ in Santa Casa made it clear that it is the Member State where the patrons are, and not where the foreign operator is, that decides what controls it wants in place to protect its residents.

The following are restrictions that have been implemented in various jurisdictions that are designed to support one or more of the objectives listed above:

License every individual having any ownership interest or power to control the operation. This includes anyone involved in any financial arrangement, such as a lender or the lessor of a building where gambling is conducted.

Disqualification for anyone convicted of any felony, or any misdemeanor involving illegal gambling or moral turpitude.

Restrictions or prohibitions on the granting of credit to bettors.

Criminal penalties for financial institutions that knowingly aid illegal gambling operators. (Norway).

Close Internet cafes used for gambling. (Greece).

Require protections for problem gamblers, including self-exclusion, players’ ability to set daily limits, links to help lines. It is even possible to require operators to monitor play and to bar players who appear to be compulsive gamblers. (Luxembourg).

Require protections for children, including means to verify the age and location of players. Players can be required to show national identity cards. (Luxembourg).

License all major suppliers.

The Member States in the E.U. are realizing they have to choose which of only two paths they may take when it comes to legal gaming. They can keep their monopolies, but only by restricting the gaming operation in almost every respect, particularly advertising. Or they can choose to open their markets to operators licensed by other Member States.

In either case, both government and private operators have to be careful that they are proceeding correctly, or they will find themselves on the losing end of challenges in the European Commission and courts.


Professor I. Nelson Rose is a Distinguished Senior Professor at Whittier Law School, an internationally known scholar, author and public speaker, and is recognized as one of the world’s leading experts on gaming law.

Prof. Rose is best known for his internationally syndicated column and 1986 landmark book, “Gambling and the Law®.” He is the co-author of Internet Gaming Law (1st and 2nd editions), Blackjack and the Law, and the first casebook on the subject, Gaming Law: Cases and Materials (LexisNexis). Prof. Rose is co-editor-in-chief of the Gaming Law Review.

Harvard Law School educated, Prof. Rose is a consultant to governments and industry. He has testified as an expert witness in administrative, civil and criminal cases throughout the United States, in Australia and New Zealand, including the first NAFTA tribunal on gaming issues. Prof. Rose has acted as a consultant to major law firms, international corporations, licensed casinos, Indian tribes, and local, state and national governments, including the provinces of Ontario and Québec, the states of Arizona, California, Delaware, Florida, Illinois, Michigan, New Jersey, Texas, and the federal governments of Canada, Mexico and the United States.

With the rising interest in gambling throughout the world, Prof. Rose has addressed such diverse groups as the National Conference of State Legislatures, Congress of State Lotteries of Europe and the National Academy of Sciences. He has taught classes on gaming law to the F.B.I., at the University of Ljubljana in Slovenia, Sun Yat-sen University in China, the Universidad de Cantabria in Spain, Université de Toulouse in France, University of Macau, and as a Visiting Scholar for the University of Nevada-Reno’s Institute for the Study of Gambling and Commercial Gaming. Prof. Rose has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, Canada, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

Prof. Rose can be reached through his website:

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