MEMBERS OF EUROPEAN UNION POLICY ON ONLINE GAMING

gambling in Cyprus is not explicitly illegal, the only other thing to call it is legal. GERMANY: Prohibited. Under a law that came into effect on January 1 2008, all forms of online gambling are illegal in Germany. The sweeping ban prohibits all traditional online casino games as well as sports betting, online bingo and online lotteries. Under this legislation the government may order German Internet service providers to block customers' access to gambling sites, and to prevent German banks from doing business with gambling companies. CZECH REPUBLIC: Regulated. After many years of lobbying by special interest groups, it was recently announced that the Czech Republic will finally be licensing online gambling within its borders. The fight to legalize online gambling in the Czech Republic has been a long one, largely spearheaded by land-based betting group Fortuna. But if someone wants to bet through Fortuna on the Internet, they must register in a bricks and mortar office and show their ID," said Bahnk. "Only then will they be allowed to play." Thus far, only five gambling companies based in the Czech Republic have been granted licenses to operate on the Internet under the new legislation. It is not yet clear whether international companies will be allowed to apply for licenses, nor whether the Czech Republic intends to take action against unlicensed websites. DENMARK: Legal but monopolized. While internet betting in Denmark is legal, it is all controlled by Dansk Spil, and no other companies are allowed to offer sports bets on the internet. The government even tries to keep foreign companies from catering to Danes. FINLAND: Legal but monopolized. Online gaming is allowed but the Finnish 2002 Act on Gaming states that only one license can be operational at a time. This means that the staterun online gaming operation is the only legal game in town. Svenska Spel Ab and ATG provide games over the Internet.

AUSTRIA: Regulated. Being a part of its economic and legal sector, gambling in Austria is legal and strictly regulated by the government and the European Commission. Online gambling licenses may only be issued to land-based operators already operating in Belgium under an A, B or F1 license (the so-called offline requirement). They are therefore referred to by the legislator as supplementary licenses. Additionally, online gambling servers are required to be located in Belgium. BULGARIA: Regulated. It was only in 2007 that the Bulgarian government began to address the issue of online gambling. Up until then Bulgarian gamblers who wanted to gamble online signed up with offshore online gambling sites. But seeing millions upon millions in online gambling revenues leaving the country, the Bulgarian government decided to take action. In 2008, the Bulgarian government decided to legalize, regulate and tax the popular internet pastime. However, its hefty 10 percent tax on online gambling profits left the country's online gambling operators and the European Union (EU) steaming. Undaunted, however, the Bulgarian government has continued to run its online gambling industry its own way.

CYPRUS: Not regulated. Technically, there are no laws that specifically target online gambling. Generally, it falls under the Betting Law, which was last amended in 2007 to force it into compliance with EU free trade agreements. The current situation has resulted in a sort of online gambling free-for-all. Ionas Nicolaou, chairman of the House Legal Affairs Committee, discusses the situation: Ninety-five per cent of electronic gambling services in our country operate legally because they are provided over the internet and there is no authority (here) where one can apply for a permit. In other words, since online

FRANCE: Regulated. The French Parliament passed a law in April 2010 allowing regulated online gaming. The French government realized that by legalizing and regulating online gambling in France, it could better control underage and problem gambling, as well as unlicensed and disreputable online gambling sites, while increasing tax revenues. The purpose of this law was to thwart gambling addiction and money laundering, and to shelter existing French operators market share, including the government-owned monopolies. Autorit de rgulation des jeux en ligne (ARJEL) was created to regulate the online gaming industry and opened its doors to foreign operators with the stipulation that operators adhere to a strict set of guidelines. On June 1, 2010 ARJEL began offering licenses for online poker, online sports betting, and online horse betting. Additionally, gaming licenses were made available in time for operators to take advantage of World Cup betting, in the summer of 2010. GREECE: Regulated (as of August 2011). The new online gambling policy allows all licensed and registered online gambling operators in the European Union to try and promote their online casinos and other online gambling sites in Greece. After a six month period, these companies will need to move both their servers and their infrastructure into Greece if they wish to continue offering their wares to the Greek people. HUNGARY: Legal with respect to sportsbetting and lottery, but monopolized; all other forms, prohibited. Under the Gambling Act of 1991, a state-sanctioned monopoly on all sports gambling in Hungary gives a company called Szerencsejtk exclusive rights in the sports betting industry until the year 2020. While online sports bets and lottery games have been legal in Hungary since 1998, all other forms of online gambling are not. Hungary bans any banks in the country from processing transactions made with foreign online gambling sites. However, Hungarian players are still able to gamble online because the country has no jurisdiction where foreign online gambling sites are hosted. But most recently, in order to be more in line with the European Union regulations, Hungary is

considering opening up its gambling market to licensed free competition and ending the monopoly. IRELAND: Regulated. Ireland began hosting online casinos and lotteries in 2003. The first online bookmaking sites were launched in 2004. Ireland's bookmakers operate Internet-based services under the terms of their bookmaking licenses. The National Lottery may be played via digital TV, phone, and Internet. Gambling winnings in Ireland are tax-free but a 2% tax is collected on sports bets. ITALY: Regulated. As of January 1, 2007, it is now legal for Italian citizens to gamble online. The new law also clears the way for public sports betting and bingo parlors. It de-regulates all 'ability based and fixed betting activities', where poker clearly falls under. The Italian plan apparently mirrors that of the plan in the U.K. with respect to how the entities that do business in Italy are regulated. Note: If a company does business with Italian customers, the government will stand to make a 3% tax on any gaming based revenues acquired by the company. Operators based in any EU and EFTA country and even in an offshore jurisdiction, may apply for an Italian gaming license provided they comply with certain fit & proper requirements and re-locate their gaming servers to Italy. LATVIA: Regulated. The Latvian licensing regime imposes the same capital, establishment and other requirements on the sports betting organizers that a "brick and mortar" casino operator is faced with. Companies wishing to provide only sports betting services might see this as quite harsh compared to regimes in some other jurisdictions. The Internet and the evolution of other technologies have allowed many operators to establish and get licensed elsewhere, but still enter the Latvian market via electronic communication means. LITHUANIA: Not regulated. Online gambling in Lithuania is legal because there are no laws that deal with it, so it is not illegal. The Lithuanian government does not give out licenses to operate casinos on the internet (though local

lottery and sportsbooks run websites that offer online gambling in Lithuania). Even though the situation is very relaxed regarding internet gambling in Luthania, online casinos have not become popular. There are other options for internet betting available to Lithuanians these are the large, international online sports betting sites that run from other countries LUXEMBOURG: Monopolized with respect to lottery; not regulated as to other forms of gambling. There are no online casinos in Luxembourg. While the countrys gambling laws do not address the topic of online gambling, the only license the government has granted is to the national lottery, whose websites offer instant-win games. Instead, players looking for internet in Luxembourg just use foreign online casinos. MALTA: Regulated. Malta was the first EU member state to introduce Remote Gambling regulations. The single legislative body managing all gambling activities in Malta is the Lotteries and Gaming Authority (LGA). It is responsible for regulating casino gaming, commercial bingo and communication games, remote gaming, sports betting, the National and other lotteries, non-profit games. The authority aims at being neutral in terms of technology and game of any type of gambling by means of distant communication providing decent Online Gambling Jurisdiction in Malta. It means that any remote game which can be completely monitored under Malta LGA is considered for licensing. The most dynamic internet gambling sector in Malta is regulated by the Remote Gaming Regulations 2004. THE NETHERLANDS: Prohibited; monopolized; but policy is expected to shift. The Netherlands does not allow its citizens to gamble online through foreign gambling operators. At present, the governmentowned Holland Casino is the only company providing internet gambling services to Dutch players. However, the prohibition against foreign companies was recently eased by the new coalition government which sees the economic value and potential revenue flowing from a regulated market. This represents a massive

change in the country's policy as it had resisted falling in line with the approach adopted by other European nations for many years. POLAND: Regulated. As provided by the Amended Gambling Act, companies solely formed as limited liability (Polish Sp. z o.o.) or joint stock companies (Polish S.A.) and incorporated in Poland are allowed to offer online betting subject to obtaining a six-year license granted by the Polish Minister of Finance. PORTUGAL: Prohibited. The Portuguese government has instituted a ban on all foreign internet betting and other gambling sites. They have even ordered Portuguese ISPs to block traffic from major foreign gambling sites so local players cannot visit them. But in the end the ban is difficult to enforce, and players still manage to bet on sports at foreign online bookmakers. ROMANIA: Not regulated. Online gambling in Romania is not a topic of conversation in the government. While there are many laws and rules regarding land-based gambling, there are currently no mentions of online gambling at all. The Romanian government does not give out licenses to internet casinos, but it also does nothing to prevent Romanians from playing at foreign online casinos either. SLOVAKIA: Regulated. Online gambling operators allowed. Interestingly, although online gambling is legal in Slovakia, the government has chosen not to issue online casino licenses which means there are no Slovakian online casinos, and may not be in the foreseeable future. However, the Slovakian Government permits foreign online gambling firms to operate in the country, albeit subject to heavy taxation. SPAIN: Regulated. (New Gambling Law effective 29 May 2011) The Law established certain licensing categories and entitlement procedures. Operators providing services to the Spanish territory will be required to obtain the relevant license or authorization, granted by the National Gambling Commission. Electronic gambling equipment must be approved by the National Gambling Commission. In principle, the

Law does not oblige operators to have servers based in Spain. The Law only requires gambling operators to have a Gambling Central Unit (i.e. a game server) ("Unidad Central de Juegos") which can be monitored from Spain by the National Gambling Commission, regardless of its location. However, the National Gambling Commission may require secondary units (i.e. copies of the game server/s) to be located in Spain for the purpose of verification and control. SWEDEN: Legal but monopolized; but will liberalize sports-betting market. Online gaming is permitted in Sweden under the control of the Swedish state and its agencies. Svenska Spel and ATG (AB Trav och Galopp, the Swedish Racing Totalisator Board) currently hold a monopoly over the online gaming market. They are authorized to offer lotteries, casino games, bingo, poker, and sports and horse wagering via the Internet and mobile devices. Foreign operators are prohibited from offering their services in the country. However, Sweden is currently in the process of creating new online laws. It is keeping the online gaming monopoly, but will allow foreign operators in the sportsbetting market. Svenska Spel will keep its online monopoly for online horse-race wagering and all other types of gaming. The sports betting concession is set for implementation in 2011. UNITED KINGDOM: Regulated. UK regulates online gambling, but has no inclination nor plans to totally ban its practice. In fact, the UK government not only permits online gambling, it even supports foreign casino operations coming to the United Kingdom to run their operations out of Britain. This UK policy is clearly designed to keep gambling in the open, which enables public institutions to manage problem issues of money laundering and fraud.