Lithuania: Lithuania Starts Blocking Unlicenced Operators

After several countries, such as Latvia, Bulgaria and Romania, started blocking unlicenced websites, Lithuania followed in their footsteps. The Gaming Control Authority (GCA) of Lithuania, which is a branch of the Ministry of Finance, announced that, as per the amendments brought to the Gaming Law in the beginning of January 2016, strict controls followed by legal actions against unlicenced operators would be set in motion.

In November 2013 the European Commission requested official information from Lithuania, Belgium, Cyprus, Czech Republic, Poland and Romania, regarding national legislation restricting gambling services. The Commission was concerned that the said restrictions are not compatible with Article 56 TFEU regarding free movement of services. Ever since the European Commission requested more accurate information regarding online gambling restrictions from Lithuania and the above-mentioned member states of the European Union, the country has been thoroughly working on its regulations and is now set on blocking those websites that operate without a licence.

Previous to the new gambling regulation which came into force as of 1st January 2016, Lithuania has had a growth of illegal gambling websites, a fact which is not surprising considering the online gambling sector was not regulated until then. The Law on Games was passed in 2001, followed by the Law on Lotteries in 2003. However, nothing was mentioned in the said legislations about online gambling, making it albeit unofficially prohibited.

Now, at last, Lithuania has a comprehensive online gambling regulation which requires operators to have an authorisation from the Gambling Control Authority in order to offer their services to Lithuanian players. Operators in the EU and EEA can apply for a remote licence as long as they can open a land-based venue in the country or commit themselves to opening one within two years of the date on which they were awarded the licence. The decision whereby international operators are required to establish a land-based presence in the country has received much criticism by the European Commission when taken by other EU member states.

Lithuania's online gambling regulation, which is very similar to Belgium's, imposes other strict measures as well, such as prohibiting operators to offer gifts and other incentives to players and precluding the advertising of competitions, lottery or tribal bets outside their land-based establishment or the website on which they operate.

Lithuania has led an extensive awareness campaign in order to inform everyone of the new procedures and caution gaming operators that if they still wanted to offer their services in Lithuania they needed to be licenced. The GCA has obtained a court's decision whereby they can urge internet providers to block the operators which have been found without a licence. A blacklist of unlicenced operators, including William Hill, Betway and Unibet, has been compiled and will be updated at regular intervals. This list was also sent to banks and other payment processing institutions so that, similar to the method adopted in the USA, they can block payments associated with those illegal domains. Currently, the list has 85 websites and more are going to be added in the near future, the GCA's director Virginijus Dauksis stated.

Ever since Lithuania has started the hunt for unlicenced operators, several companies have changed their domains in order to continue their online activities in the country. Although the GCA does not name the websites who have resorted to this method, it does state that several well-known operators have violated the law in such a manner. Instead of applying for a licence like the new legislation requires, these operators have just tried to bypass the blocking of their websites. The director of the GCA, Virginijus Dauksys, has deemed such repeated attempts as illegal and unethical behaviour and has stated that the institution will take action against such companies. Furthermore, he has said that changing the domain name in order to operate illegally can be considered smuggling. 

Up to this point, only four operators have acquired licences in Lithuania: Olympic Casino Group, Orakulas, Top Sport and Loaimų strateginė grupė" (Tony Bet).

This article contains general information only and is not intended to address the circumstances of any particular individual or entity. ACT, by means of this article is not rendering any accounting, business, financial, investment, legal, tax, or other professional advice or service. This article is not a substitute for such professional advice, nor should it be used as a basis for any decision or action that may affect your finances or your business. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Before making any decisions or before taking any action that may affect your finances or your business, you should consult a qualified professional adviser. ACT shall not be responsible for any loss whatsoever sustained by any person who relies on this article.

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