Montenegro bans Apple Pay and PayPal for online betting payments

Montenegro bans Apple Pay and PayPal for online betting payments
Credit: Serg Stupak / Shutterstock

Montenegro may have complicated its aspirations to join the EU by authorising strict new restrictions on payments for online gambling, including banning of the most popular transaction methods.

The country’s government is planning to make amendments to its gambling laws to ban the use of modern payment systems for betting, including e-banking and IPS and mobile payment methods such as PayPal and Apple Pay.

The international context

Instead of making transactions online using the prohibited methods, betting customers will instead have to transfer funds to online accounts via betting shops or by using a card at a betting shop terminal.

Critics of the legislation have argued that the amendments go strongly against EU competition laws. This includes the Montenegro-EU Stabilisation and Association Agreement and the Payment Services Directive, which aims to create an integrated market for electronic payments.

Additionally, the amendments contradict the EU’s fourth and fifth Anti-Money Laundering Directives categorising cash transactions as posing a high-risk of money laundering. In stark contrast to this, Montenegro’s clampdown on modern payment methods will place a heavy onus on cash payments for betting.

Montenegro’s decision is also at odds with recent EU initiatives, such as the introduction of the European Digital Identity (e-ID), which policymakers hope will standardise electronic identification across the EU’s 27 member states. 

Causing turmoil in Montenegro’s gambling sector, the amendment will force consumers to transfer funds to their online accounts exclusively through betting shops or by using a card at a betting shop terminal.

The changes also fall within the context of Montenegro’s action plan for strengthening of its AML framework to meet requirements set out by MONEYVAL, the Council of Europe’s financial intelligence monitoring body.

This mirrors developments seen in some other European markets including the prominent gambling jurisdictions of Malta and Gibraltar

Both island nations had to follow AML action plans to secure removal from the G7 Financial Action Task Force (FATF) greylist of financial jurisdictions. Like MONEYVAL, the FATF sees reduced cash transactions as a positive step for money laundering.

Gambling industry responds

Unsurprisingly, one of the harshest critics of the Montenegrin gambling amendments has been the industry itself. Jovana Klisić, a representative of MontenegroBet, the national trade association, informed SBC News that the industry is “at a crossroads” 

Klisić highlighted that the sector, which directly and indirectly employs nearly 2% of Montenegro’s workforce, is facing severe risks due to these legislative changes. In a country with a 15% unemployment rate, the potential for job losses in the gambling sector could have economic repercussions.

A petition against the amendments, calling for a halt to the changes, garnered 25,000 signatures – representing around 8% of the electorate – within just five days. This rapid and widespread support underscores the significant public concern over the potential impact on jobs and the broader economy.

Klisić emphasised: “The removal of e-banking and mobile payment options, despite their compliance and transparency, not only hampers operational efficiency but also jeopardises employment in the sector. The economic effects of such legislative measures could ripple outwards, affecting other areas of the Montenegrin economy.”

MontenegroBet’s petition has been submitted to the country’s National Assembly, initiating a Constitutional Review of the amendments. The association is also collaborating with international institutions to draw attention to the negative impacts of these legislative changes and their inconsistencies with EU directives.

Betting industry stakeholders hope that the significant public backing and institutional pressure will prompt a reconsideration of the amendments. 

Klisić stated: “Our overarching aim is to realign Montenegro’s regulatory framework with both EU and global financial norms, ensuring a just and transparent environment for the industry.”

She concluded: “This is about more than just rectifying a single law; it’s about ensuring that Montenegro’s financial and regulatory frameworks are beneficial for a fair and competitive industry.”