A COMPREHENSIVE GUIDE TO BELGIUM’S GAMBLING REGULATORY FRAMEWORK

I General overview of the Belgian gambling regulatory landscape

In Belgium, a distinction should be made between games of chance on the one hand, and lotteries on the other. Skill-based games are not as such regulated under Belgian law.

Games of chance – The Belgian Games of Chance Act¹Act of 7 May 1999 on games of chance, betting, gaming establishments and player protection, as amended from time to time.  provides for a set of basic definitions in relation to games of chance (which includes betting). Games of chance are defined as ‘games whereby a stake of any kind made, results either in the loss of this stake by at least one of the participants or in winnings of any kind for at least one of the participants or organisers of the game and whereby chance forms an, even ancillary, element in the course of the game, the designation of the winner or the determination of the size of the winnings’¹Article 2, 1° Games of Chance Act..

To fall within the ambit of the Belgian Games of Chance Act, games must therefore comply with four constitutive elements, namely (i) a game element; (ii) a stake (i.e., a financial counterparty of whatever nature); (iii) a loss or winnings, or both, generated for at least one party; and (iv) the influence of chance to a certain extent (even if ancillary).

Betting is a form of games of chance. It is defined as follows: ‘a game of chance in which each participant places a stake and whereby profit or loss is generated that depends not on an act made by the participant, but on the realisation of an uncertain event that occurs without the participants’ intervention’²Article 2, 5° Games of Chance Act..

The Games of Chance Act clarifies that certain activities are not considered games of chance, namely competitive sports, certain card and parlour games with a very limited stake that can provide the participant with a material benefit of small value only, and games that provide no benefit to the participant other than the right to continue playing for free up to five times³Article 3 Games of Chance Act..

Lotteries – Lotteries are defined as operations offered to the public and intended to provide winnings as a result of chance⁴Article 301 of the Belgian Criminal Code. They are regulated by the Belgian Lottery Act⁵Lottery Act of 31 December 1851, as amended from time to time (the Lottery Act)..

To fall within the ambit of the Lottery Act, a game or offering must therefore comply with the following constitutive elements: (i) the offering must be made publicly; (ii) the offering is intended to provide a form of winnings (which may be any kind of economic benefit); and (iii) the operation must be dependent on chance solely (think of a prize draw, bingo, a draw by ‘the innocent hand’, etc.).

A free lottery or prize draw is also considered a lottery falling within the ambit of the Lottery Act (and the Belgian Criminal Code).

Skill games – Belgian law does not provide for a definition of skill-based games. Generally, one could state that a skill-based game is a game that entirely depends on skill without any (reasonable) influence of chance to determine the course or the outcome of the game. Indeed, the involvement of a certain degree of chance may lead to the qualification as a game of chance or a lottery (i.e., where the game depends solely on chance).

Games or operations that do not fully comply with the constitutive elements described above will generally be considered unregulated.

II Belgium’s gambling policy

Belgian gambling policy can be summarised on the basis of the distinctions made between the various forms of gambling and gaming as described above.

Policy on games of chance – The organisation and offering of games of chance is based on a licensing mechanism. Article 4, Section 1 of the Games of Chance Act stipulates that it is unlawful for any person to operate games of chance (including betting) or a gaming establishment, in any form, at any place and in any direct or indirect manner, without a licence granted by the Belgian Gaming Commission.

Any operator wishing to operate a gaming establishment or offer games of chance in Belgium (either remote or land-based) must therefore preliminarily apply for a licence from the Gaming Commission. The number of such licences is limited; therefore, the Belgian market for games of chance is a relatively closed one. This means that investment opportunities in the Belgian market are relatively restricted although several opportunities still exist (see also below).

Further, article 25 of the Games of Chance Act stipulates the various types of licences for land-based gambling that can be awarded in Belgium. The most important⁶Additional licences exist specifically for horse races, collaborators in gaming establishments, etc. gambling licences are the following:

• Class A licence: this licence permits the operation of a class I gaming establishment or casino. In casinos, typical casino games are allowed to be offered (such as slot machines, roulette tables, blackjack tables, etc.) as well as catering services and the organisation of socio-cultural activities. The maximum number of casinos allowed in Belgium is limited to nine⁷Article 29, 1 Games of Chance Act..
• Class B licence: this licence permits the operation of a class II gaming establishment or arcade (also called gaming halls). Arcades are ‘light’ casinos where casino-styled automatic games with limited stakes as well as limited winnings are offered. The maximum number of arcades allowed in Belgium is limited to 180⁸Article 34, 2 Games of Chance Act..

Class C licence: this licence permits the operation of a certain number of gaming machines in pubs. The number of C licences is not restricted.

• Class F1 licence: this licence permits operating the organisation of betting services. F1 licences concern the actual operators of betting services, that is, those entities who offer for the public events on which a player can bet. It does not concern betting shops and newspaper agencies that accept a wager and that need to hold a class F2 licence. The maximum number of organisers of betting activities in Belgium (hence requiring an F1 licence) is limited to 30 for the period from 31 July 2022 to 31 July 2031⁹Article 1, Royal Decree of 22 December 2010, as amended by Royal Decree of 21 August 2022..

All currently approved operational licence holders can be verified on the Gaming Commission’s website¹⁰ See https://www.gamingcommission.be/en/operators/licences..

Policy on lotteries – Article 1 of the Lottery Act prohibits all lotteries, including commercial lotteries. Two exceptions are made, namely for the state-owned Belgian National Lottery and lotteries organised exclusively for charitable works. The latter exception does to a certain extent allow companies to organise promotional lotteries, but this mechanism increases the cost of such operation.

Skill games – For skill games, no specific gambling regulatory framework exists. This also means that, from a gambling law perspective,¹¹Obviously, other regulatory requirements will apply such as consumer law, e-commerce law, privacy law, etc. private operators may freely offer such games (including games that do not fall under the definition of a game of chance or lottery) to the Belgian public.

III Land-based versus online gambling

Several important differences between offline and online gambling exist.

Games of chance – Belgian law on games of chance distinguishes between bricks-and-mortar gaming on the one hand, and remote (online) gaming on the other. The Games of Chance Act stipulates that an operator who has obtained a licence for an offline casino, arcade or betting establishment may ask the Gaming Commission to be granted one additional licence to operate such games of chance through ‘instruments of the information society’ (i.e., online). Such additional licence (license type ‘+’) can only relate to the operation of games of chance of the same nature as those that are offered in the physical world.

This means that Belgium has a very particular legal regime for online gambling: only operators who have been licensed to operate a bricks-and-mortar gaming establishment are eligible to obtain a licence to operate (games of chance of the same nature) online. Once such ‘+ license’ has been obtained, the operator can offer games online, which games will generally be subject to the same rules as set out for their offline counterpart, in addition of which additional rules are determined by royal decrees and several guidance notes and technical requirements as set out by the Gaming Commission.

It is important to note in this respect that operators who have been granted a licence to operate games of chance online are not prohibited from entering into a commercial arrangement with a third party to effectively operate these online games of chance (albeit under the online licence of the licence holder, which is not transferable). This creates important investment opportunities in the Belgian market.

Article 43/8, Section 2, 3° of the Games of Chance Act puts forward as a technical requirement that the online operator’s server on which the data and website are managed must be placed in a permanent establishment on Belgian territory, thus allowing the Gaming Commission to intervene where necessary (either for control purposes or for sanctioning purposes).

Lotteries – No distinction is made between offline or online lotteries. This means, basically, that the general prohibition to organise and offer lotteries applies both to offline and online contexts.

IV Offshore gambling

Belgium is known for its active enforcement against unlicensed (offshore) operators, especially concerning online gambling. The Gaming Commission has established a blacklist of unlicensed online gambling operators that allow Belgian residents to register and participate in the (unlicensed) gambling offering.¹² See the list at https://www.gamingcommission.be/nl/kansspelcommissie/illegale-kansspelen/lijst-illegale-goksites, which today contains around 500 blacklisted websites. Each of those operators is blacklisted following an official investigation, and in the event the contact details of the company concerned are known to the Gaming Commission, the Commission will send to the company an official notification of breach against Belgian gaming laws, potentially leading to the public prosecution of, or an administrative sanctioning procedure against, the company concerned.

The legal basis of these enforcement actions is the prohibition on offering unlicensed games of chance to the Belgian public (Article 4, Section 1 Games of Chance Act), a prohibition that is criminally sanctioned. The Games of Chance Act has extraterritorial application since it is accepted that when Belgian residents can access gambling websites from the Belgian territory and participate in (unlicensed, hence illegal) games of chance offered on such websites, such offer is in breach of Belgian gambling laws.

The Gaming Commission also has agreements with Belgian internet service providers and the financial sector to respectively block access to blacklisted websites and prohibit financial transactions from such websites.

V The regulator

Games of chance – The operation of games of chance is monitored by the Belgian Gaming Commission, which is an advisory, decision-making and monitoring body under the Minister of Justice. The Gaming Commission has its seat in Brussels, Belgium, and is composed of representatives of several ministries.

The Gaming Commission has far-reaching competences, such as the right to access gaming establishments at all times, to perform controls and interrogations, and to seize documents, materials and games. It can also impose administrative sanctions on licensed (and unlicensed) operators in the event of infringements against the licence conditions or other provisions of Belgian gambling laws. As stated above, Belgium is known for its active enforcement policy.

The Gaming Commission has a website containing useful content, documents and references in relation to the operation of games of chance in Belgium¹³See https://www.gamingcommission.be/en..

Lotteries – The National Lottery is subject to supervision by the government, specifically by the Minister competent for the National Lottery (currently Mr Vincent Van Peteghem).

VI Gaming suppliers

Specifically within the legal framework of games of chance, a separate licence exists for gaming (equipment) suppliers. As such, the class E licence allows ‘the sale, renting, leasing, supply, provision, import, export and production of games of chance, and services relating to maintenance, repair and equipment of games of chance’¹⁴Article 25, 5 Games of Chance Act..

Article 48 of the Games of Chance Act stipulates that the above-described services may only be effectuated after a class E licence has been awarded to the operator concerned. The licence relates both to the supply of physical (e.g., gaming tables and electronic gaming machines) and digital equipment (e.g., online games, platform). The website of the Gaming Commission lists the currently existing E licence holders¹⁵See https://data.gamingcommission.be/licenses/E/latest/table.html?lang=en..

Belgian licensed operators are required to source the gaming equipment used within their (online and offline) activities from E-licensed suppliers.

It is worth noting in this respect that the Games of Chance Act prohibits the same natural or legal person to combine, directly or indirectly, personally or through the intermediary of another person, one or several licences (class A, A+, B, B+, C, D, F1, F1+, F1P and F2) on the one hand (operational licences) and a class E supplier licence on the other¹⁶Article 27, Section 1 Games of Chance Act.. Belgian gaming laws thus generally prohibit, quite exceptionally, the cumulation of both an operational licence and a supplier licence. Nonetheless, certain exceptions to this general rule apply.

VII Sanctions for non-compliance

Games of chance – Several infringements against the Games of Chance Act, including its main principles such as the prohibition to offer unlicensed games of chance, are criminally sanctioned. Such sanctions include imprisonment of six months up to five years or a fine ranging from €24,000 (minimum) up to €1.6 million (maximum), or both¹⁷Article 63 Games of Chance Act.. In certain cases, these sanctions can be doubled.

The Games of Chance Act also allows a judge, in the event of such infringements, to seize all monies wagered and all instruments, tools and devices used for the games. The Act also allows the judge to order the definitive or temporary closure of a gaming establishment, and provides that the Public Prosecutor can cite the directors, administrators, managers, appointees and agents of the legal person concerned before court directly in order to hold them personally responsible.

Other than the criminal sanctions (which can only be imposed by a judge), the Games of Chance Act allows the Gaming Commission to impose administrative fines under certain conditions (generally, in the event the Public Prosecutor does not pursue the case)¹⁸Article 15/3, Section 1 Games of Chance Act.. The minimum amount and the maximum amount of the administrative fine that can be imposed by the Gaming Commission correspond respectively to the minimum amount and the maximum amount, increased by surcharges, of the criminal fine sanctioning the same fact. The Gaming Commission may also (for certain infringements, including infringements of licence conditions) impose other sanctions on the licence holder, including issuing a warning, suspending the operation of some games, revoking the licence or closing the gaming establishment.

Lotteries – The organisers of illegal lotteries can also be sanctioned with imprisonment of eight days up to three months and with a fine of up to €48,000. The judge may also seize all monies wagered and materials used for the illegal lottery¹⁹Article 302 Criminal Code..

VIII Taxation

Gaming operators are generally taxed on the basis of their gross gaming revenue (generally defined as the difference between all wagers made and all winnings paid out). The actual gaming tax rate depends on the Belgian region (i.e., Flemish, Walloon or Brussels regions) in which the operator is based and the class of gaming establishment concerned (e.g., casino, arcade, betting); due to a recent change in law, these regional taxes are no longer deductible as a professional cost to calculate income tax. Electronic gaming machines are also subject to the payment of gaming taxes, the amount of which again depends on the region and type of machine concerned. A separate gaming tax is applicable for games of chance offered online.

The National Lottery is subject to a separate tax regime (except for the betting services it offers). Lottery products are subject to a monopoly rent, and the National Lottery also pays subsidies and special contributions.

It is noteworthy that after introducing VAT on online games of chance (not on lotteries), the Belgian Constitutional Court ruled that this VAT measure was unlawful, as a result of which the rule was rescinded and VAT on online games of chance no longer applies.

IX Future developments

In the short term, several developments are likely to be expected in the gambling (regulatory) landscape.

The legality of the new gambling advertising rules (severely restricting all advertising for land-based and online gambling) is challenged before the courts by various operators. It will be interesting to see whether these cases will lead to a change in gambling advertising policy. The question there also arises whether the National Lottery will be subject to further restrictions in relation to its own advertising.

In addition to the advertising rules, a number of new legislative proposals are pending in Belgium that further constrain the gambling sector. It remains to be seen which proposals will further pass the Belgian Parliament.

Several gambling-related legal proceedings are pending at present (e.g., relating to the online cumulation of various games of chance; registration of players in betting shops). These will give rise to court decisions in the coming period that will further shape the Belgian gambling landscape.