Gaming Law 2019

Last Updated November 25, 2019

Serbia

Law and Practice

Authors



JPM Janković Popović Mitić advises Serbian and international clients from every major industrial and corporate sector, including energy, banking, transportation, manufacturing and communications, and in expanding industries such as renewable energy, IT and gaming. The firm's expertise and experience have been demonstrated in numerous landmark transactions. JPM teams are led by experienced professionals with extensive knowledge and practice of specific legal areas and industries.

Significant developments regarding games of chance in Serbia began in 2004 with the introduction of more detailed regulation governing the organisation of games of chance. Further development of the legislative framework occurred in 2011 when the new Law on the Games of Chance (“Official Gazette of the Republic of Serbia”, No.88/2011, 93/2012 – other law, 30/2018 and 95/2018) was enacted, which introduced, inter alia, online games of chance. The law has undergone several amendments and is currently in force.

In 2014, the conditions for the first issuance of official online betting approvals by the competent authority were met by the enactment of the bylaws regulating the licensing procedure, and by the establishment of the Informatics Laboratory within the Military Technical Institute.

Consequently, the abovementioned changes in legislation led to the development of the sector and an increase in the market of the number of organisers of games of chance.

There is no specific legislation for social gaming, eSports and skill games, and as long as such games do not fulfil the criteria to be considered as games of chance, they do not fall within the regulatory scope of the Law on the Games of Chance.

On 25 October 2019, the Proposal of the Law on amendments and supplements of the Law on Games of Chance was submitted to the Serbian Parliament. The subject of the amendments is 12 articles of said Law, with the purpose of harmonising the law with EU Directive 2015/849 of 20 May 2015, EU Directive 2018/843 of 30 May 2018 and Recommendations of Financial Action Task Force, related to the prevention of money laundering and terrorist financing, with the aim of preventing criminals or their associates from holding, or being the beneficial owner of, a significant or controlling interest, holding a management function in an organiser, or being an organiser of games of chance. The proposed changes will introduce additional obligations for organisers to disclose their beneficial owners and their associates, and to provide adequate proof that those persons have not been under criminal investigation or convicted.   

One recent sector development was the establishment of the Games of Chance Administration by the amendments of the Law in December 2018. The Games of Chance Administration was established as a separate governing body within the Ministry of Finance and started operating on 1 March 2019. It acquired the competence of the previously competent Tax Administration in the field of gambling, with the aim of improving efficiency of control over gambling business.

In October 2019, the Proposal of the Law on amendments and supplements of the Law on Games of Chance was submitted to the Serbian Parliament. The proposed changes will harmonise the law with EU Directive 2015/849 of 20 May 2015, EU Directive 2018/843 of 30 May 2018 and Recommendations of Financial Action Task Force, related to the prevention of money laundering and terrorist financing, and will introduce additional obligations for organisers to disclose their beneficial owners and their associates.

Serbian legislation recognises three main types of games of chance: classic, special and prize competitions in goods and services; the law further differentiates permitted games within each main type (see further under 2.2 Land-Based).

All classic and special types of games of chance can be organised online, whereas classic games of chance can be organised only by the National Lottery of Serbia. 

Online games of chance are defined as any classic or special games of chance that are organised via the internet, telephone, television, or other means of e-communication.

Poker is considered to be a special game of chance, while skill games and specific entertainment games do not generally fall within the regulatory scope of the Law on the Games of Chance. 

The following types of games of chance are permitted in the Republic of Serbia:

  • Classic Games of Chance are the exclusive right of the National Lottery of Serbia, and include:
    1. lottery, instant lottery, and other lottery-based games;
    2. sports betting (eg, wagering on the result of a soccer match and other sports competitions);
    3. lotto, keno and similar games;
    4. tombola, bingo and similar games based on tombola;
    5. fonto; and
    6. SMS lottery.
  • Special Games of Chance – there are three types that can be organised by a Serbian entity, subject to obtaining the appropriate licence:
    1. games of chance organised in casinos;
    2. games of chance on slot machines; and
    3. betting.

Permitted casino games of chance are:

    1. blackjack (21);
    2. American roulette;
    3. French roulette;
    4. baccarat (chemin de fer);
    5. craps;
    6. draw poker;
    7. Texas hold'em poker;
    8. ultimate Texas hold 'em;
    9. Caribbean karo poker;
    10. casino stud poker;
    11. Caribbean 7 stud poker;
    12. Omaha poker;
    13. three card poker;
    14. let it ride poker;
    15. Sic Bo;
    16. money wheel;
    17. Punto Banco; and
    18. Serbo-Russian roulette.
  • Prize competitions in goods and services are games organised for advertising purposes by Serbian entities, where participants acquire the right to participate in the game by purchasing a certain product or using a certain service.

The organisation of pyramidal games of chance (chains of luck, etc) and games of chance in goods and services in which the prize is paid in cash or in which a cash prize is an integral part of the prizes is forbidden.

Key legislation consists of the Law and its key bylaws, as follows:

  • the Law on the Games of Chance, which regulates the right to organise games of chance, types of games of chance, the procedure and conditions for obtaining licences and approvals, the rights and obligations of the organisers, the revenue generated by the organisation of games of chance, and the competence and supervision powers of the Games of Chance Administration;
  • the Rulebook on Types of Games of Chance (Catalogue of Games of Chance Types);
  • the Rulebook on the method of determining conditions for obtaining approval for organising games of chance through means of electronic communication;
  • the Rulebook on informatics characteristics of the equipment for organising games of chance through means of electronic communication, and the conditions and manner of its inspection;
  • the Decree on the conditions, manner and procedure for the issuance of a licence for the organising of special games of chance in casinos;
  • the Rulebook on the manner of determination of the fulfilment of conditions for obtaining approval for organising games on slot machines; 
  • the Rulebook on the determination of informatics conditions for organising special games of chance on slot machines; and
  • the Rulebook on the manner of determination of the fulfilment of conditions for obtaining approval for organising betting. 

According to the Law on Games of Chance, games of chance are those games in which participants, in exchange for a charge, are provided with the opportunity to win money, things, services or rights, whereby the winning or loss does not depend on the knowledge or skill of the participants in a game, but rather arises from a case or some uncertain event.

Only games of chance that are registered in the Catalogue of Games of Chance Types and for which Rules of game of chance are approved by the Games of Chance Administration can be organised.

The Law on Games of Chance sets forth the definition for each type of game of chance.

Classic games of chance (exclusively organised by the National Lottery of Serbia) are games involving a larger number of participants with the intention of being the only or partial winners of a pre-defined fund of winnings.

Special games of chance are games in which participants play against each other, or against the organiser, where winning depends on the height of the stake; they can be games of chance in a casino, games of chance on slot machines and betting:

  • games of chance in casinos are games that players play against the casino or against one another on gaming tables with small balls, small dice, cards or other similar props, and which are organised exclusively in the casino;
  • games of chance on slot machines are games played on electromechanical, electronic and similar devices, in which players pay a certain amount and thus acquire the ability to win, which depends on the case or some other uncertain event; and
  • betting are games of chance in which the participant bets on the outcome of sports (the results of a football match, horse and dog races, etc) and other events proposed by the organiser, whereby the circumstance determining the win or loss may not be known in advance to anyone and has to be of such nature that neither the organiser nor the players can have any influence on it, and where the amount won is determined at the time of paying the stake and cannot be modified later.

Prize competitions with goods and services are the games of chance organised for advertising and other purposes, in which the participant is given an opportunity to win a reward in goods or services, which must be specified in advance. By purchasing certain products or using certain services, the participant becomes entitled to participate in the game.

Games of chance through means of electronic communication (online games of chance) are classical or special games of chance organised by means of electronic communication, such as the internet, telephone, television, radio, SMS and any other form of electronic communication.

Online classic games of chance can be organised only by the National Lottery of Serbia, and online special games of chance can be organised by any Serbian entity, subject to obtaining prior approval from the Games of Chance Administration.

The law prescribes more than 70 acts considered as misdemeanours (actions contrary to provisions of the Law or omissions and non-compliance with the key obligations), for which the breaching entity shall be fined.

Key offences are the organising of games of chance without a prior licence/approval/consent, non-compliance with the prohibitions defined by the Law, non-performance of specific obligations during the organising of games of chance, failure to keep mandatory evidences and to provide for mandatory reporting to the Games of Chance Administration, non-payment of obligatory fees, non-compliance with the mandatory requirements and conditions during the validity of the licence/approval/consent, etc.

Furthermore, organising illegal games of chance is treated as a criminal offence pursuant to Article 352 of the Criminal Code of the Republic of Serbia. 

Non-compliance with the Law on Games of Chance (breach of certain legal provisions) represents a misdemeanour for which the breaching entity may be fined from RSD100,000 (EUR850) to RSD2 million (EUR17,000) for each breach. Any financial gain made by the offence will be repossessed. The responsible person in the breaching entity shall be fined from RSD5,000 (EUR40) to RSD150,000 (EUR1,300) for each breach.

Pursuant to the Criminal Code, anyone who organises games of chance without a licence from the competent authority shall be punished by fine or imprisonment of up to two years. An organiser of games of chance or a participant in a game who uses deceit shall be punished by imprisonment of three months to five years. The means intended or used in committing the offence, as well as monies and other items used in the game of chance, shall be seized.

On 25 October 2019, the Proposal of the Law on amendments and supplements of the Law on Games of Chance was submitted to the Serbian Parliament. The subject of amendments is 12 articles of said Law, with the purpose of harmonising the law with EU Directive 2015/849 of 20 May 2015, EU Directive 2018/843 of 30 May 2018 and Recommendations of Financial Action Task Force, related to the prevention of money laundering and terrorist financing.

Additional obligations will be imposed on organisers to disclose their beneficial owners and associates, and to provide adequate proof that those persons have not been under criminal investigation or convicted, or in breach of regulations governing the prevention of money laundering and terrorism financing. The organisers will be obliged to submit financial statements and audit reports for shareholders. The proposal of the law also introduces additional measures for casino operators to request written statements from each client confirming their participation in casino games in their own name and on their own behalf. 

The competent authority is the Games of Chance Administration, which is a separate entity within the Ministry for Finance and independently performs state administration affairs in the field of games of chance within the territory of the Republic of Serbia.

The jurisdiction’s approach to regulation is prescriptive. The Law defines all permitted types of games and stipulates strict requirements and conditions for the organisation of games of chance. It also prescribes specific gambling prohibitions.

There are separate licences for each type of game of chance, issued by the Games of Chance Administration in a prescribed procedure and subject to the fulfilment of all conditions and requirements.

Classic games of chance can be organised only by the National Lottery of Serbia. Having obtained the prior consent of the Government, the National Lottery of Serbia may engage certain legal entities to organise the classic games and the operators organising the games on behalf and for the account of the National Lottery of Serbia.

The right to organise special games of chance in casinos shall be transferred by licence issued by the Government.

The right to organise special games of chance on slot machines and the right to organise sports betting and other events shall be transferred by approval issued by the Games of Chance Administration.

The right to organise games of chance through means of electronic communication is transferred by the approval given by the Games of Chance Administration. Only the National Lottery of Serbia has the right to organise classic games of chance through means of electronic communication without special approval.

The right to organise prize competitions in goods and services is transferred by consent of the Games of Chance Administration.

Except for classic games of chance organised only by the National Lottery of Serbia, any entity registered in the Republic of Serbia can apply for the appropriate licence, approval or consent for organising special games of chance, online special games of chance and prize competitions in goods and services.

During the procedure, the entity must prove it has fulfilled all conditions and requirements stipulated for each type of game of chance.

The licence for organising special games of chance in a casino, the approval for organising games of chance on slot machines, the approval for organising betting and the approval for organising games of chance through means of electronic communication are all granted for a period of ten years, with a possibility for renewal.

As an exception, an approval for betting on horse races is granted for the period of one horse racing season.

Prior consent for organising prize competitions in goods and services is granted for each prize game individually; it cannot last more than 30 days, and can be given to one organiser for a maximum of two competitions per year.

An application for a licence for organising special games of chance in casinos is granted on the basis of a public invitation, announced in the daily press, in a manner and based on a procedure determined by the Government. The application must contain the data on the Serbian legal entity and its shareholders, and be accompanied by the following documents:

  • the decision on registration;
  • proof that the share capital is not lower than EUR1 million;
  • the incorporation act;
  • proof that the applicant or its majority shareholder has been organising casino games for at least five years;
  • a three-year business plan;
  • certification from a competent state authority that the shareholders and management of the applicant, and their related parties, have not been criminally convinted in the last five years;
  • a proposal of the licence fee, for no less than EUR500,000, and a bank guarantee covering the minimum licence fee; and
  • the rules of the games.

An application for the approval to organise games of chance on slot machines must be accompanied by:

  • the decision on registration;
  • proof that the share capital is not lower than EUR150,000;
  • the incorporation act;
  • a balance sheet and profit and loss statement for the previous year;
  • proof that the technical and functional characteristics of slot machines are fulfilled;
  • proof of ownership or a lease for no fewer than 100 slot machines within the territory of the Republic of Serbia;
  • proof of ownership right or the right to use appropriate gaming premises;
  • certification from a competent state authority that the shareholders and management of the applicant, and their related parties, have not been criminally convinted in the last five years; and
  • the rules of the games.

An application for the approval to organise betting is accompanied by:

  • the decision on registration;
  • proof that the share capital is not lower than EUR150,000; 
  • the incorporation act;
  • a balance sheet and profit and loss statement from the previous year;
  • proof of ownership or the right to use appropriate gaming premises with at least 30 pay desks;
  • proof that the technical and functional characteristics of the betting ticket printers are fulfilled;
  • certification from a competent state authority that the shareholders and management of the applicant, and their related parties, have not been criminally convinted in the last five years; and
  • the rules of the games.

An application for the approval to organise games of chance through means of electronic communication is accompanied by:

  • the decision on registration;
  • proof that the share capital is not lower than EUR250,000;
  • details of the manner of identifying and registering players;
  • details of the procedure in case of interruption of communication with the player;
  • a description of the back-up system and recovery system;
  • elaboration of the prevention of unwanted impacts;
  • proof of ownership or the right to use premises where the equipment is located;
  • proof that the technical and functional characteristics of IT equipment are fulfilled; and
  • the rules of the games.

An application for consent to organise prize competitions in goods and services must contain data on the name and registered seat of the applicant, the information about the prize fund, with the specification of prizes accompanied by a corporate decision on the prize competition organising and the rules of the game.

Timing depends on the type of licence requested.

A licence for a casino is obtained in a specific public invitation procedure, in a manner, timescale and procedure determined by the Government of the Republic of Serbia. 

The procedure for obtaining the approval for special games of chance and online games of chance, and the consent for prize competitions in goods and services, is initiated at the request of the interested entity at any time.

The procedure is of an administrative nature and should not last more than 30 days, although that term can be extended if the Games of Chance Administration issues a request for the submission of additional documentation. The organisation of games of chance cannot start before the appropriate licence is obtained. In the case of prize competitions in goods and services, it is recommended to submit the consent application at least two months prior to the intended start of the game, because the organiser who obtained the consent is obliged to publish the approved rules of games of chance in a daily newspaper 15 days before the start of the game.

The fee for authorisation and the fee for organising (annual fees) are associated with the licence application.

In regards to special games of chance in casinos, the proposed amount of the licence fee may not be lower than EUR500,000.

The fee for the approval of special games of chance on slot machines amounts to EUR25 per month per machine.

The fee for betting approval amounts to EUR100 per month per betting house.

The fee for approval for games of chance through means of electronic communication is EUR2,500 per month.

The organiser of special games of chance in casinos pays the fee for the organising of each individual game, on a monthly basis, as a percentage of the base, which is determined as follows:

  • for games in which players compete against each other (poker, chemin de fer, etc), the value of the received payments, whereby the fee is determined as 3% of such rate; and
  • for other games, the difference between the total received payments for participation in the game and the winnings paid to the players in a particular game, whereby the fee is determined as 25% of such rate.

The organiser of games of chance on slot machines pays a fee for organising games, on a monthly basis, of 5% of the base, which consists of the difference between all realised pay-ins and all realised pay-outs, whereby the fee cannot be lower than EUR35 per machine. If the organiser has an annual turnover of more than EUR18,000 in RSD counter value per machine, it is obliged to pay a 10% fee on the amount of the annual turnover that exceeds EUR18,000.

The betting organiser pays a fee for organising betting, on a monthly basis, of 15% of the base, which consists of the difference between all realised pay-ins and all realised pay-outs, whereby the fee cannot be lower than EUR500 per betting house.

The organiser of games of chance through means of electronic communication pays a monthly fee for organising online betting, of 15% of the base, and 5% of the base for other games of chance. The base is the difference between all pay-ins and pay-outs, but in any case the monthly fee cannot be lower than EUR7,500. 

The organiser of prize competitions in goods and services pays a fee of 25% of the total value of the prize fund.

Upon obtaining the appropriate licence, the organiser is also immediately obliged to secure winning payments and the collection of public revenues by providing a special purpose bank deposit (or bank guarantee) and a risk deposit with the cashier, in the following amounts:

  • EUR300,000 special purpose deposit per casino (or the bank guarantee) and at least EUR50,000 as risk deposit;
  • EUR300 special purpose deposit per slot machine (or the bank guarantee) and at least EUR100 per slot machine as risk deposit;
  • EUR3,000 special purpose deposit per betting desk or EUR900,000 for at least 300 betting desks (or the bank guarantee), and at least EUR150 per betting desk as risk deposit; and
  • EUR150,000 special purpose deposit for online games of chance (or the bank guarantee) and at least EUR10,000 as risk deposit.

There is no separate premises licensing, but the physical and technical requirements and conditions must be fulfilled in order to obtain a gaming licence and keep it valid.

The casino shall be furbished so that the gaming area and the area for guests and staff represent a single unit, and shall have a reception service for identification of all persons entering into the casino. It must be within a facility specially arranged for that purpose, or in a hotel categorised with three or more stars. Also, it shall have a cash desk, an exchange office and a separate and protected area for keeping cash and other valuables. The organiser is obliged to provide non-stop audio and video recorded surveillance above all tables and machines, as well as surveillance of all entries into and exits from the casino, and surveillance of players and visitors. The physical protection of players and visitors in casinos must also be provided. A special sign issued by the Games of Chance Administration shall be displayed at the entrance door of the casino.

Slot club and betting house premises must be located a minimum of 200m from any educational institutions (primary and secondary schools), with said distance being the shortest safe pedestrian route from the closest edge of the educational institution to the entrance of the gaming facility. A special sign issued by the Games of Chance Administration shall be displayed at the entrance. There has to be at least five slot machines in each slot club.

There are also conditions for technical and functional characteristics and the technical correctness of casino tables, slot machines, control devices and betting ticket printers.

On 25 October 2019, the Proposal of the Law on amendments and supplements of the Law on Games of Chance was submitted to the Serbian Parliament. The subject of the amendments is 12 articles of said Law, with the purpose of harmonising the law with EU Directive 2015/849 of 20 May 2015, EU Directive 2018/843 of 30 May 2018 and Recommendations of Financial Action Task Force, related to the prevention of money laundering and terrorist financing.

Additional obligations will be imposed on organisers to disclose their beneficial owners and associates, and to provide adequate proof that those persons have not been under criminal investigation or convicted, or in breach of regulations governing the prevention of money laundering and terrorism financing.

The proposal of the law also introduces additional measures for casino operators to request written statements from each client confirming their participation in casino games is in their own name and on their own behalf. 

The Law on Games of Chance does not recognise B2C Licences. Every individual over 18 years old can participate in games of chance organised in the Republic of Serbia. Minors cannot participate in classic and special games of chance, and are forbidden to enter premises where those games are organised.

It is forbidden to:

  • participate in games of chance organised abroad, for which the stakes are placed in the territory of the Republic of Serbia;
  • enable the placement of bets by payment cards in the Republic of Serbia for the participation in games of chance organised abroad by the issuer of payment cards with a registered seat in Serbia; and
  • enable the placement of bets in the Republic of Serbia for the participation in games of chance organised abroad in any form or manner.

The Law on Games of Chance does not recognise B2B Licences.

In the procedure to obtain approval for online games of chance, the organiser must provide proof of the possession of informatics equipment if he is obliged to have such equipment in the territory of the Republic of Serbia – ie, software and hardware through which players participate in games of chance and that allow the automatic exchange of data with the server of the games of chance department. Informatics Laboratory issues compliance certifications for the equipment and examines computer networks, system software, the quality of gambling software, player registration and management, information security and protection, and other electronic devices. The information system must fulfil the following conditions:

  • it must be legally procured hardware, with an operating system and appropriate performance applications for quality customer service;
  • there must be an algorithm listing random numbers or a corresponding certificate confirming the correct operation of the random number generator;
  • there must be a communication system that provides adequate capacity, response speed and system availability for end users; 
  • there must be a system for protection against unauthorised use of information system and data loss; and
  • there must be at least one internet domain registered within the national internet domain of the Republic of Serbia.

There are no measures that regulate the use of affiliates; affiliates cannot be used.

There are no licensing or regulatory requirements that apply to the use of white-label providers. However, each licence is issued to a Serbian entity and relates to a specific approved game of chance, so the responsibility for compliance rests with the licence holder, and the licence (or rights and obligations) cannot be transferred, leased or sold to any other party.

There have been no changes to online gambling since its introduction in Serbia in 2011, followed by the enactment of bylaws and the establishment of the Informatics Laboratory within the Military Technical Institute as the software and informatics equipment certification body in the procedure of obtaining online gambling approval.

As of 25 October 2019, the Proposal of the Law on amendments and supplements of the Law on Games of Chance was submitted to the Serbian Parliament, and is in the process of enactment. The subject of the amendments is 12 articles of said Law, with the purpose of harmonising the law with EU Directive 2015/849 of 20 May 2015, EU Directive 2018/843 of 30 May 2018 and Recommendations of the Financial Action Task Force. 

Additional obligations will be imposed on online organisers to disclose their beneficial owners and associates, and to provide adequate proof that those persons have not been under criminal investigation or convicted, or in breach of regulations governing the prevention of money laundering and terrorism financing. Online organisers will be also obliged to submit financial statements and audit reports for shareholders. 

In the procedure for obtaining approval for online games of chance, the organiser must elaborate on the methods by which they will prevent any undesirable influence on games of chance, such as unauthorised use of the system, the method of data protection, the registration procedure, the method for blocking internet content, and measures for denying  non-account holders and minors access to the system.

In terms of unlicensed operators, the Law does not provide for express payment blocking measures. However, there is a general prohibition on enabling online games of chance or enabling participation in such games for any entity that does not possess approval. Also, it is prohibited to participate in games of chance organised abroad or, in case of such foreign games, to enable the payment of a stake via payment cards by local banks. Acting to the contrary is considered to be a misdemeanour, and a fine of up to RSD2 million (EUR17,000) may be imposed for each breach of such prohibitions. However, there are no apparent instances of the local authorities trying to enforce this rule against local banks.

The law stipulates an obligation for organisers to be socially responsible regarding the protection of minors, the prevention of addictive disorders among participants and the protection of personal data. Organisers are obliged to apply the prohibition on the participation of minors in games of chance in the most effective way. Prior to the start of their employment, employees that have direct contact with players have to be trained for preventive action against addictive disorders among participants. In online games of chance, this applies in relation to employees with direct contact, such as those in customer services. In the direct vicinity of the entrance door, the gaming facility must have a 100cm x 80cm poster displaying text about the prevention of addictive disorders and the contact information of a health institute; the same data should be placed on each desk or counter.

The organisers of games of chance are obliged to prohibit the participation of minors, and to be socially responsible and apply measures for the prevention of addictive disorders, including displaying the contact information of the health institute.

Bylaws on online gaming stipulate the Principles of Responsible Gambling, such as the possibility for a player to limit the maximum amount of pay-ins or losses suffered within a specified time period, and to determine access prohibition (self-exclusion). The organiser is obliged to provide a clear and transparent overview of all pay-ins and losses for the last three months and for previous transactions, within five days of a request to do so. The homepage of the website of the organiser must include a link to documents on responsible gambling, including a verification test for each player.

The key AML legislation and guidance in the Republic of Serbia is as follows:

  • the Law on Prevention of Money Laundering and the Financing of Terrorism (“Official Gazette” of the Republic of Serbia, No.113/17), which includes organisers of special games of chance in casinos and organisers of online games of chance as obliged entities; 
  • the list of indicators for recognising persons and transactions for which there are reasons for casinos to suspect money laundering or terrorism financing, which contains the following key indicators, among others:
    1. providing false or altered documents or refusal to provide ID;
    2. temporary or permanent residence in a country on the “black list”;
    3. if the winner of  a large amount asks for support and favours from another customer in the casino, in order to collect chips and avoid reporting transactions in accordance with AML regulation;
    4. if a customer buys large quantities of chips for cash at the table, invests minimum amounts and cashes the chips soon afterwards;
    5. if two players frequently and simultaneously cover both sides of the same game by betting on the same amounts; and
    6. if a regular customer alters their gambling mode or bets unusually high amounts;
  • the list of indicators for recognising persons and transactions for which there are reasons for organisers of online games of chance to suspect money laundering or terrorism financing, which contains the following indications, among others:
    1. the customer accesses from an IP address or owns cards from a country on the “black list”, or attempts to conceal its IP address;
    2. the customer is a citizen of a country that does not adhere to AML standards;
    3. the customer requires the realised gain to be transferred to another account, or to a third party account;
    4. if there is an application for the registration of multiple user accounts with the same data;
    5. if the customer has multiple accounts or “online wallets” that separately do not exceed the incoming and outgoing payments amount, as required in accordance with AML reporting obligations;
    6. is a customer deposits a large amount into a registered account and withdraws it after a certain period of time, without any or negligible game of chance activities; and
    7. if the customer invests small but regular amounts into game of chance activities, but their annual consumption is large and substantially exceeds their annual income.

As of 25 October 2019, the Proposal of the Law on amendments and supplements of the Law on Games of Chance is in the procedure of enactment before the Serbian Parliament. The subject of the amendments is 12 articles of the Law on games of chance, with the purpose of harmonising the law with EU Directive 2015/849 of 20 May 2015, EU Directive 2018/843 of 30 May 2018 and Recommendations of Financial Action Task Force, related to the prevention of money laundering and terrorist financing.

The proposed changes introduce the definition of ultimate beneficial owner and associates, with the aim of preventing game organisers being in direct or indirect ownership or under the control of persons who have been under criminal investigation or convicted or in breach of regulations governing the prevention of money laundering and terrorism financing. The organisers will be obliged to submit financial statements and audit reports for shareholders, with proof that management, shareholders, beneficial owners and their associates have not been under criminal investigation or convicted.   

The Administration for the Prevention of Money Laundering is established as an administrative authority under the ministry competent for finance, and is the regulatory state body performing financial intelligence activities and supervision over obliged entities.

Actions and measures for AML prevention and detection shall be taken before, during the course of, and following the execution of a transaction or establishment of a business relationship, and include the following:

  • knowing the customer and monitoring their business transactions;
  • sending information, data and documentation to the competent Administration;
  • appointing compliance officer and their deputies, and providing conditions for their work;
  • providing regular professional education, training and development for employees;
  • providing for a regular internal control of compliance with the law and performing internal audits to determine if it is in accordance with the scope and nature of business operations;
  • adopting the list of indicators for identifying persons and transactions with respect to which there are reasons for AML suspicion; and
  • keeping records, protecting and storing data from such records, and implementing the measures and other actions based on the law.

An obliged entity must adopt the appropriate internal acts, which shall also include the actions and measures for the purpose of effective risk management. The internal acts shall be commensurate with the nature and size of the obliged entity, and approved by the top management. The entity must also adopt and regularly update the Risk Analysis Act.

Supervision and implementation of the regulation governing advertising shall be carried out by the ministry responsible for trade, and in certain cases by the Games of Chance Administration.

According to the Law on Advertising (“Official Gazette” of the Republic of Serbia, No. 6/2016), advertising is the representation in any form, in connection with a business or professional or business activity, in order to encourage the sale of goods and services, the sale of real estate, or the transfer of rights and obligations.

Key legal provisions refer to the prohibition of certain advertising manners or the advertising of games of chance to certain persons. It is forbidden to advertise games of chance in printed or electronic media designated for minors, or to publish advertising messages that do not contain a warning that the participation of minors is forbidden.

A legal entity performing marketing and advertising for a game or enabling the organiser to use means of electronic communication for participation in a game may not provide such services to a legal entity that has not been granted the appropriate licence from the Games of Chance Administration. In the advertising of sales incentives for participating in games of chance (free credits, bonuses), the advertiser is obliged to state the rules of use of sales incentives, in a clear way, and especially the special conditions that the participant must meet.

It is not allowed to broadcast advertising and TV sales messages recommending games of chance during and at least ten minutes before or after the broadcast of a children's show or minor’s show. It is forbidden to advertise classic and special games of chance on websites that are thematically for or targeted at children and minors.

The advertising of games of chance is prohibited in the open air, except at a distance of at least 100m by air from the nearest point of a preschool, school, health or institution intended for children and minors.

Gambling advertising may not:

  • contain unsubstantiated statements about the chances of winning or income;
  • suggest that skill may influence the outcome of the game if this is not the case;
  • encourage participants to recover losses through the time, place or way of advertising;
  • present participation in games as being socially desirable, or link participation with success or position in society;
  • suggest that participating in games of chance may be a way of solving social, professional or personal problems; or
  • suggest that participating in games of chance may be a substitute for employment, a solution to a financial problem or a financial investment.

Advertising is permitted for the promotion of skill prize games, provided that the organiser clearly and understandably states the rules of the game, the type and the prize.

A legal entity shall be fined RSD300,000 (EUR2,600) to RSD2 million (EUR17,000for misdemeanour for infringing advertising regulations, and the responsible person in the legal entity shall be fined RSD50,000 (EUR450) to RSD150,000 (EUR1,300). A protective measure ban on business activity performance for a period of six months to one year may be imposed, as well as a public announcement of the judgment.

Every change of shareholder or ultimate beneficial owner is registered in the Serbian Business Registers Agency. A change of control may also trigger a mandatory requirement to obtain concentration approval (merger notification) from the Serbian Commission for Protection of Competition if the revenue thresholds are met.

The acquisition of a company with a casino licence is subject to prior approval from the Ministry of Finance. In the case of other organisers, the change shall be reported to the Games of Chance Administration.

Any fact such as the purchase and sale of shares, an increase in initial capital or mergers and other status changes may trigger a change of corporate control. A change of corporate control for casino operators may be performed after obtaining the approval of the Ministry of Finance; for other operators, it is only reported to the Games of Chance Administration.

The law does not differentiate between passive and active investors. In general, every shareholder must fulfil certain requirements (such as non-conviction for criminal acts in the last five years) in order for the company to obtain a gaming licence.

Specifically for casino operators, in addition to the conditions that must be met by shareholders of the company in the procedure of obtaining the casino licence, in the case of a change of ownership and capital structure, the interested investor must provide, inter alia, proof of the following:

  • that the tax obligations in the domicile country are fulfilled;
  • a certificate of a competent state authority that the investor and its related parties have not been convicted for criminal acts in the last five years;
  • a detailed explanation of the reasons for the acquisition; and
  • a three-year business plan and other documentation on the basis of which the influence of the investor on future casino business will be evaluated.

The Games of Chance Administration performs office and field inspections for compliance, by collecting, processing and analysing data, information and documentation submitted by organisers.

The organiser is obliged to participate in the inspection procedure, and to submit all documentation and information at the request. It is obliged to enable the inspector to enter the gaming premises, to inspect and audit business books, records, evidence, software and other business documentation. The inspector is authorised to monitor the opening and closing of gaming tables and slot machines, and calculations of the cash desk and daily turnovers. In the case of games of chance organised contrary to the law, the inspector will render a decree on the temporary closing of the gaming facility and seize the equipment. If the inspector establishes a lack of the adequate licence for games of chance, he will impose a 15-day ban on activity for the first irregularity, a 90-day ban for the second offence, and a one-year ban for the third occurrence.

The enforcement of sanctions is conducted by the Games of Chance Administration.

The inspector is authorised to issue direct orders and decrees to organisers in order to remedy irregularities within a determined deadline, to close the premises, etc. The inspector is also authorised to file a request for the initiation of misdemeanour proceedings before the competent misdemeanour court. If there is reasonable doubt that a felony has been committed, the inspector is obliged to file a criminal charge.

The financial penalties are enforced in special enforcement procedures conducted by the public enforcement officers. 

Social gaming is not expressly regulated, unless the game does not fulfil the conditions to be considered a game of chance. The law defines certain exceptions from the definition of games of chance, with the following not qualifying as games of chance and not being subject to any licence:

  • games organised before the public in which one or more qualified participants competes in the knowledge and skills of various fields under the rules of the organiser, with the direct involvement of participants in the game (directly at the place of the game or via telephone), whereby the final outcome depends exclusively on the results achieved in the given area; and
  • entertainment games such as games on computers, simulators, video machines, pinballs and other similar devices, put into operation for a charge but where there is no winning in money, things, services or rights, but only in additional free games of the same type.

eSports are not regulated by any special law in Serbia and will not fall under the regulation of games of chance as long as the particular game does not fulfil the conditions to qualify as a game of chance.

The definition of skill games is stipulated in the Serbian Law on Games of Chance, for the purpose of differentiating such games from games of chance, and excluding them from the regulatory requirements. eSports as skill games and eSports tournaments have recently been organised in Serbia. Since 2017, Serbia has strengthened its position in the region and at eSport international tournaments, and has became popular in this field due to the largest audience coming from Serbia. A gain or a loss in those games cannot be affected by any uncertain event or outcome, but can only be dependent on the knowledge or skills of participants in a game. Betting on eSports may only be organised by Serbian games of chance organisers that have obtained the respective approvals from the Games of Chance Administration.

Fantasy sports are not regulated by any special law in Serbia and will not fall under the regime of the games of chance regulation, as long as the particular game does not fulfil the conditions to qualify as a game of chance.

The definition of skill games is stipulated in the Serbian Law on Games of Chance, for the purpose of differentiating such games from the games of chance, and excluding them from the regulatory requirements.

Skill gaming is regulated by the definition of the games that are not considered to be games of chance, for the purpose of excluding them from the regulatory requirements.

Skill games are defined as:

  • games organised before the public in which one or more qualified participants competes in the knowledge and skills in various fields under the rules of the organiser, with the direct involvement of participants in the game (directly at the place of game or via telephone), whereby the final outcome depends exclusively on the results achieved in the given area; and
  • entertainment games such as games on computers, simulators, video machines, pinballs and other similar devices, put into operation by money or token for charge but where the participant cannot make winning in money, things, services or right, but is entitled to one or more free games of the same type.

If there is any uncertainty regarding whether or not a game should be considered a game of chance, the Ministry of Finance is competent to decide.

Blockchain is not regulated. In online gambling, hardware and software must be within the territory of the Republic of Serbia, and the equipment must meet the applicable technical and functional conditions, and be approved by the competent authorities. The use of blockchain technology in gambling is not regulated.

The National Bank of Serbia has given public warnings to citizens against the use of virtual currencies, because cryptocurrencies are not recognised as payment instruments, regardless of their name.

In 2019, the Serbian Government and Securities Commission began the consultation process on the regulation of crypto-property rights. The fact that crypto-property rights, by their nature, can ensure anonymity in transactions and are suitable for criminal activity is a strong reason for regulation. It was taken into account that there is currently no consumer protection system regarding crypto-property rights issuance. The legalisation of cryptocurrencies is still being debated in Serbia, but the regulatory framework should be expected in the coming years.

Reforms could be expected in regard to blockchain technology. In 2019, the Serbian Government began the consultation process on the regulation of crypto-property rights. The legalisation of cryptocurrencies is still being debated in Serbia but the regulatory framework should be expected in the coming years. In respect to social gaming, eSport and similar games, there are no recent or forthcoming reforms in the legislation framework.

A gambler's income tax payer is a natural person who makes a profit from games of chance. The taxable income from gambling winnings represents any individual gambling gain, except those exempted. Gambling winnings tax is not paid on individually generated profits up to the amount of RSD100,000 (EUR850), nor on profit from games played in casinos and slot machines.

If the gain consists of property and rights, the taxable income represents the market value of the property or right at the moment when the gain is realised.

JPM Janković Popović Mitić

6 Vladimira Popovica street
11070 Belgrade
Serbia

+3811 1207 6850

+3811 1207 6899

office@jpm.rs www.jpm.rs
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JPM Janković Popović Mitić advises Serbian and international clients from every major industrial and corporate sector, including energy, banking, transportation, manufacturing and communications, and in expanding industries such as renewable energy, IT and gaming. The firm's expertise and experience have been demonstrated in numerous landmark transactions. JPM teams are led by experienced professionals with extensive knowledge and practice of specific legal areas and industries.

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