Belgian Draft law approved by the House of Representatives

The Senate's discussion on the matter is scheduled for the beginning of the new parliamentary year in October, 2009.

The underlying principle of the Draft law is the prohibition of exploitation of games of chance. However, the aforementioned Draft law derogates from the above-mentioned prohibition by a licensing system. Due to the expansion of the scope of application of the Draft law, bets (whether fixed-odd or mutual), games of chance offered via the Internet and gaming media should be subject to a mandatory licensing regime. The Belgian Gaming Commission should be the sole competent administrative authority to grant licenses under the future legal framework.

As regards online gambling, all operators, who would like to organise and exploit games on the Internet, should also be exploiting such games offline in order to obtain the corresponding license under the prospective legal framework.

The European Commission has rendered, on June 29th, 2009, its detailed opinion on the Draft law whereby it requested an explanation from the Secretary of State Carl Devlies on two features ((i) licensing regime for online gambling operators and (ii) the need to take into account the conditions fulfilled in the home Member State) of the Draft law.

Consequently, serious doubts persist as to the compatibility of such a provision with the freedom to provide services guaranteed by Article 49 of the EC Treaty. In this regard, it seems that such a provision is justified neither on the grounds of treaty-based justifications nor on the basis of mandatory requirements. Suffice it here to point out that there are less stringent measures to provide for adequate protection of players.

Furthermore, the requirement that the licensee must first have an offline license and the server must be located in Belgium in order to obtain a license to operate games on the Internet in Belgium is maintained (Article 25 of the Draft law) by the current version of the Draft law, contrary to what one might have expected following the Commission's detailed opinion which strongly objected to this feature of the Draft law. It is worth recalling that Ulys Law Firm, prior to the Commission's detailed opinion, had expressed its concerns about the compatibility of this feature with EU law.

As regards the need to take into account the conditions fulfilled in the home Member State, when it comes to assessing the conditions that must be met to obtain a license to operate games on the Internet in Belgium, the Draft law's silence on this point remained unchanged notwithstanding the Commission's criticism. Once again, it is worth recalling that Ulys Law Firm, prior to the Commission's detailed opinion, questioned the validity of such an approach in the light of the so-called conditional recognition principle.

Consequently, it is highly likely that the Draft law will be amended by the Senate in order to take into account the European law.