Lithuania Hardens Regulation RequirementsPublished January 16, 2016 by Lee R
There is still some work to be done to attract foreign entry and appease the EU.
Lithuania is hardening its stance towards online gamblers, which means a new regulation model.
Offshore Companies Targeted
Recent gambling reforms implemented by the government have yielded broad powers to the country's ministry of finance to target offshore companies that offer illegal unregulated gambling to the citizens of Lithuania citizens.
The Lithuanian gambling regulator GCA has taken "severe action" against unlicensed websites. The new regulations include a mandate as of January 1st compelling all financial institutions from banks to payment providers to refuse transactions stemming from illegal online gambling.
The new sweeping powers include the issuance of legally binding orders to network service providers that will block all users from accessing offshore gambling sites, under legal threat of significant fines.
GCA has gone so far as to compile a blacklist of websites non grata, which will continue to expand to all "gambling operators who organize remote gambling illegally and target the Republic of Lithuania.”
Mending the Fence
This regulation comes at the impetus of being chastised by the European Commission along
with five other states for failing to regulate online gambling. The new regime is modeled after the Belgian model carrying a prerequisite of all operators to be incorporated as a company in Lithuania and show an issued share capital of at least $1.1 million ($1.18 million), along with a prerequisite of remote gaming licensees to be partners with an existing land-based casino in the country in order to get an online license.
The measures may still be considered a bit too restrictive for EU policy, due to the EU's preference for free movement of services across inter-EU borders. In the first week of the new requirements, the GCA reported receiving one license. Whether this is due to the relative strictness or the smaller size of the economy is up for debate, since Lithuania is not a prominent EU economy, whether online gambling is regulated or not.
Lithuania may have to promote its domestic economic appeal for foreign entry in order to stimulate the economy and enjoy the economic benefits that an effective system of online gambling regulation can offer.