August 12, 2009 (CAP Newswire) — Joining the long list of countries legalizing and regulating online gambling is Eastern European nation Estonia, whose new laws regarding Internet gaming go into effect January 2010.

It’s a sign that the Eastern European arena, for decades held under strict Communist control, is now fully embracing capitalism. One of the quickly growing economies in that region, Estonia’s decision to allow online gambling with certain licensing restrictions puts it in line with trends that are now emerging all throughout the European continent, Eastern and Western.  

However, along with the freedom comes certain headaches. The nation will be implementing a fairly thorough licensing process for online gambling operators both domestic and foreign. Companies wishing to enter (or remain in) the Estonian market will need a "Gambling Activity Licence" first, and second, they must apply separately for remote gambling operation permits.

As in the United States and some Western European nations, this complex regulatory licensing has some industry observers wondering if regulation is really such a great development. Licensing means taxation, and it means regularly paid fees, and it usually means strict oversight. Oversight is a good way to keep things legal, but it can also entail a lot of extra administrative headaches for businesses who are better at marketing than at keeping governmental regulators happy. It also tends to mean that, in times of recession, governments impose greater and greater fees on companies for some easy extra money. 

“It is a fact that a number of foreign on-line casino sites have been and are accessible in Estonia, although their operators have no local licence — since it is not possible to obtain it at the moment,” writes Marge Tubalkain-Trell in the Baltic Business News. “This does not necessarily mean that those operators are not licenced at all as many of them have already gone through a licencing procedure and hold licences from other EU member states. The activity of these on-line operators fall under the free movement of services and their home state regulation may even be more strict in some cases than it will be in Estonia.

“However, from the 1st of January 2010 thousands of on-line gambling operations accessible in Estonia will become illegal if the operator does not comply with the Estonian Gambling Act and access to those sites can and will be limited. On the other hand, it may not be economically rational for many operators to legalize their activity by establishing a new enterprise in Estonia and going through the whole licencing process (again). In order to solve this problem the drafters included provisions on subcontracting of gambling activities.”

For more details, click here to check out the in-depth article at the Baltic Business News.

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