Manne wrote:
In January 2017, Poland’s new gambling laws come into effect, but a draft amendment may mean that online poker will be restricted to a state monopoly provider.
The text of the amendment in Polish is available here.
The amendment extends the range of online games which will be permitted, and allows for live tournaments to be played outside bricks and mortar casinos, but it also establishes a new state monopoly which will operate certain gambling activities.
The amendment has been notified to the EU Commission which must agree that it is in compliance with EU treaties before Poland will be authorized to implement the new law.
Gaming lawyers: Online poker restricted to state monopoly
Early enthusiasm that the new laws would for the first time allow online poker is now tempered by the opinion of online gaming lawyers that offshore operators like PokerStars, 888 and partypoker will not be allowed to apply for licenses to enter the market.
In an article for law firm DLA Piper published in late July, Anna Wietrzynska states that “online poker is to be subject to the aforesaid State monopoly.”
An analysis by Dominika Mizielinska from K&L Gates LLP makes the same interpretation:
“The Draft Amendment addresses the demands of poker players by allowing organization of tournaments outside casinos and without a casino license, based on a prior notification to the Customs Office and tournament rules approved by the Minister of Finance. Also, playing poker online will become legal if organized by a state-owned company.”
There may be ambiguity in the text of the law
There are two elements in the text referring to internet poker which may create doubt as to the ultimate intention of the government.
Google translate is not great at handling Polish, so for the benefit of those with better Polish skills than OPR, the legal text on page 14, paragraph 3, reads:
“Zmiana przepisów w odniesieniu do gry poker polega na umożliwieniu organizacji gry poza kasynami gry, zarówno przez podmioty posiadające koncesję na prowadzenie kasyna gry, jak i inne. Możliwa stanie się także gra w pokera za pośrednictwem sieci Internet.”
An approximate translation is:
“Changing the rules for playing poker is to enable the organization of the game outside casino games, both by entities licensed to conduct casino games and others. Poker games can also be offered via the internet.”
The implication of the text is that licensees may offer online poker. The second critical mention is at the end of the same section:
“Gra w pokera za pośrednictwem sieci Internet, podobnie jak inne gry kasynowe, będzie mogła być urządzana przez podmiot wykonujący monopol państwa.”
Which translates roughly as:
“The game of poker via the Internet, like other casino games, can be operated by the entity performing the state monopoly.”
The text doesn’t say “must be” operated by the state monopoly, only “będzie mogła”—“It can be” operated by the state monopoly.
State monopoly will use third party providers
The state monopoly will have the responsibility for running gaming machines in gaming machine venues. The law explicitly states that this task can be outsourced to third party providers, but does not state whether or not online poker could be similarly outsourced.
If so, there could be an opportunity for one of the major providers to bid for the contract. This would not be too dissimilar to the situation in Delaware where 888 provides the poker software for all three licensees.
The Polish solution would presumably have no similar licensees and either brand the game using the state monopoly’s name or allow the contractor to use its own branding.
The EU Commission may object to the state monopoly concept
Within the text of the amendment, the government goes to some length to provide legal EU precedents for its new proposals on ISP blocking and financial transaction blocking.
It quotes several EU Court of Justice (CJEU) cases which allow restrictive gambling laws when they can be proved to be in the public interest.
However, the text is not so robust when it comes to justifying the establishment of a state monopoly. The existence of a state gambling monopoly in Sweden is one of the points of dispute that has seen the EU Commission launch legal proceedings against Sweden.
Poland will need to present a thorough case for its state monopoly for it to receive EU approval.
The process of submitting the amendments to the EU Commission gives other EU member states the opportunity to object to any provisions that they believe contravene EU treaties.
EU member, Malta, is almost inevitably going to object to the state monopoly concept. In the past it has objected to any restrictions that individual nations have introduced that water down the authority of the Malta Gaming Authority (MGA).
Malta contends that a gaming license issued by the MGA should be valid for operators to offer online gambling in all EU member states. They have largely lost the argument politically, but several CJEU cases which are under way may give them a legal victory.
Losing the Polish market would be a blow to poker operators
Poland has a population of over 38 million, roughly half a million people fewer than California. GDP per capita is less than $13,500, less than a quarter of the income in California, but as an EU member state, Poland can be expected to converge its income with other EU members over time.
In both the short and long term, Poland is an attractive market. Most of the major operators have not withdrawn from the Polish market, but when the new laws go into force in January next year, it is extremely likely that they will decide to exit the market.
When Amaya reported its poor Q3 numbers last year, and restated its full year revenue expectations, it pointed to weakness in Greece (population 11 m
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The text of the amendment in Polish is available here.
The amendment extends the range of online games which will be permitted, and allows for live tournaments to be played outside bricks and mortar casinos, but it also establishes a new state monopoly which will operate certain gambling activities.
The amendment has been notified to the EU Commission which must agree that it is in compliance with EU treaties before Poland will be authorized to implement the new law.
Gaming lawyers: Online poker restricted to state monopoly
Early enthusiasm that the new laws would for the first time allow online poker is now tempered by the opinion of online gaming lawyers that offshore operators like PokerStars, 888 and partypoker will not be allowed to apply for licenses to enter the market.
In an article for law firm DLA Piper published in late July, Anna Wietrzynska states that “online poker is to be subject to the aforesaid State monopoly.”
An analysis by Dominika Mizielinska from K&L Gates LLP makes the same interpretation:
“The Draft Amendment addresses the demands of poker players by allowing organization of tournaments outside casinos and without a casino license, based on a prior notification to the Customs Office and tournament rules approved by the Minister of Finance. Also, playing poker online will become legal if organized by a state-owned company.”
There may be ambiguity in the text of the law
There are two elements in the text referring to internet poker which may create doubt as to the ultimate intention of the government.
Google translate is not great at handling Polish, so for the benefit of those with better Polish skills than OPR, the legal text on page 14, paragraph 3, reads:
“Zmiana przepisów w odniesieniu do gry poker polega na umożliwieniu organizacji gry poza kasynami gry, zarówno przez podmioty posiadające koncesję na prowadzenie kasyna gry, jak i inne. Możliwa stanie się także gra w pokera za pośrednictwem sieci Internet.”
An approximate translation is:
“Changing the rules for playing poker is to enable the organization of the game outside casino games, both by entities licensed to conduct casino games and others. Poker games can also be offered via the internet.”
The implication of the text is that licensees may offer online poker. The second critical mention is at the end of the same section:
“Gra w pokera za pośrednictwem sieci Internet, podobnie jak inne gry kasynowe, będzie mogła być urządzana przez podmiot wykonujący monopol państwa.”
Which translates roughly as:
“The game of poker via the Internet, like other casino games, can be operated by the entity performing the state monopoly.”
The text doesn’t say “must be” operated by the state monopoly, only “będzie mogła”—“It can be” operated by the state monopoly.
State monopoly will use third party providers
The state monopoly will have the responsibility for running gaming machines in gaming machine venues. The law explicitly states that this task can be outsourced to third party providers, but does not state whether or not online poker could be similarly outsourced.
If so, there could be an opportunity for one of the major providers to bid for the contract. This would not be too dissimilar to the situation in Delaware where 888 provides the poker software for all three licensees.
The Polish solution would presumably have no similar licensees and either brand the game using the state monopoly’s name or allow the contractor to use its own branding.
The EU Commission may object to the state monopoly concept
Within the text of the amendment, the government goes to some length to provide legal EU precedents for its new proposals on ISP blocking and financial transaction blocking.
It quotes several EU Court of Justice (CJEU) cases which allow restrictive gambling laws when they can be proved to be in the public interest.
However, the text is not so robust when it comes to justifying the establishment of a state monopoly. The existence of a state gambling monopoly in Sweden is one of the points of dispute that has seen the EU Commission launch legal proceedings against Sweden.
Poland will need to present a thorough case for its state monopoly for it to receive EU approval.
The process of submitting the amendments to the EU Commission gives other EU member states the opportunity to object to any provisions that they believe contravene EU treaties.
EU member, Malta, is almost inevitably going to object to the state monopoly concept. In the past it has objected to any restrictions that individual nations have introduced that water down the authority of the Malta Gaming Authority (MGA).
Malta contends that a gaming license issued by the MGA should be valid for operators to offer online gambling in all EU member states. They have largely lost the argument politically, but several CJEU cases which are under way may give them a legal victory.
Losing the Polish market would be a blow to poker operators
Poland has a population of over 38 million, roughly half a million people fewer than California. GDP per capita is less than $13,500, less than a quarter of the income in California, but as an EU member state, Poland can be expected to converge its income with other EU members over time.
In both the short and long term, Poland is an attractive market. Most of the major operators have not withdrawn from the Polish market, but when the new laws go into force in January next year, it is extremely likely that they will decide to exit the market.
When Amaya reported its poor Q3 numbers last year, and restated its full year revenue expectations, it pointed to weakness in Greece (population 11 m