GAMBLING LEGISLATION PROSPECTS IN LITHUANIA

ECOVIS Miškinis, Kvainauskas ir partneriai advokatų kontora
Pylimo g. 6, Vilnius
Tel. 8 5 2124084; fax: 8 5 2122741

Over the last few months, the project for the new Gaming Law of the Republic of Lithuania has been considered. Gaming, according the Gaming Law, means the playing of a game or mutual betting in accordance with established regulations, where the participants, seeking to win money, voluntarily risk losing their stakes and where winnings or losses are determined by chance, the outcome of an event or a sports competition. The actual Law is highly criticized because of not keeping up with the latest technologies and possibilities in the gambling sector and the global situation in this sector as a whole.

Over the last few years some of the top online gambling organizer companies of the EU have been trying to step into the Lithuanian market, but the legal environment is still not modern enough for them. For example, the actual Law considers remote communication systems as a system which is used for placing stakes and paying out winnings through remote communication computer network terminals located in different places of the Republic of Lithuania and linked by way of telecommunications with the central host computer, which ensures a centralized recording of the stakes laid down and winnings paid out. Thus, Totalisator and betting winnings, according the Law, shall be paid out only in cash immediately upon the presentation of the winning card. There is no possibility to transfer the winnings to the winner’s bank account, which makes the online betting companies impossible to apply for a license in Lithuania.

In gaming establishments (casinos), gaming machine halls and bingo halls, according the Law, winnings shall be paid out only in cash immediately where the winnings do not exceed 100,000 litas (28,900 euros), or they shall be paid out not later than within 24 hours where the winnings exceed 100,000. At the player’s request, the winnings shall be paid out in cash or by a bank check or by transfer to the winner’s bank account. After all, there is no online casino definition in the actual Gaming Law. The project of the new Gaming Law determines precisely the online (remote) gambling mechanism concerning the online casinos, online betting, etc.

For example, the new Estonian Gambling Act recognizes the licenses of European Union gaming operators. According to this Gambling Act, online (remote) casinos will be accessible from Jan. 1, 2010. The legislation aims to provide an attractive and trustworthy business environment for organizing remote gambling over the Internet from Estonia. The only online casinos not getting into the Estonian market are those that operate from outside of the EU.

All foreign gaming operators will have to pay a higher fee than Estonian operators to apply for a license to operate there. Another interesting option is that the Estonia Gambling Act does, however, allow the operators with the license to act on behalf of the company not having a license. It will be a rather big task for a gambling regulating institution to look after sub-contractors applying for licenses to operate on behalf of the online casinos from outside of the European Union.