Montenegro is going to re-evaluate a controversial ban on the use of some of the most popular digital payments methods for betting transactions.
Enacted by the government this year, the laws prohibit the use of electronic payments methods, including Apple Pay and PayPal, for making payments for online gambling services.
The laws were hit with an instant backlash from the country’s betting sector upon introduction, understandably, but also presented a potential barrier to Montenegro joining the EU.
Several months later, Montenegro is reassessing the situation, and revisions are expected later this year. The government has been facing public and industry criticism as a result of the ban.
Betting industry customers, for a start, are not particularly enthusiastic about their payments options being limited. Apple Pay and PayPal are not the only methods being limited, with other forms of mobile banking, IPS, and e-banking also prohibited.
Instead of paying money directly into an online betting account via the above mentioned electronic payments methods, customers will instead have to use cash or specific terminals.
Unsurprisingly, the betting sector itself was the most vocal opponent of the ban. The law significantly impacts arguably the most important aspect of operators’ relationship with customers, that being the transaction.
In the early stages of the law’s application, Montenegro Bet, the country’s betting industry trade association, reacted strongly. A petition gained over 25,000 signatures and was subsequently submitted to the country’s National Assembly, prompting a legislative review.
Back in May, Jovana Klisi, a Montenegro Bet representative, said to SBC: “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.”
Some operators have been preparing legal action in the months since the ban’s implementation. One particular lawsuit is being prepared to be taken before the International Court for Settlement of Investment Disputes. The bookmakers in question are citing apparent corruptive practices and unequal market access by the government.
Concerns do not just relate to the betting industry, however. Like many other European nations, betting is a small but significant sector in Montenegro’s wider economy, employing around 2% of the country’s workforce.
Montenegro Bet asserts that the ban’s impact on the betting sector could lead to job layoffs, which in turn would exacerbate Montenegro’s unemployment rate – already high at 15%. Loss of income in the gaming sector would also mean loss of tax revenue for the state.
On a broader political level, Montenegro has been involved in negotiations to join the EU since 2012, having officially applied to join the political-trade bloc in 2008, two years after its independence from the Union of Serbia and Montenegro.
The gambling electronic payments ban could complicate these methods by bringing about what some observers have called a ‘paradox’. By placing a heavier emphasis on cash, the ban contradicts EU rules around money laudenring which show a preference for digital payments, and class cash-heavy transactions as posing a greater money laundering risk.
Additionally, the law also clashes with other EU initiatives like the European Digital Identity (e-ID) programme, which policymakers hope will standardise electronic identification across the EU’s 27 member states.
The law also interestingly goes against a trend seen across the gambling industry, and endorsed by the commission’s that regulate it, which has seen a preference for cashless payments.
This has been particularly observed in countries like Australia, with policymakers seemingly viewing cashless payments as providing greater protections against problem gambling.
The economic and political implications of Montenegro’s ban will likely be considered by legislators as the law is reappraised later this year, as will the petitions and legal actions undertaken by the gambling industry. What policymakers will decide on, however, is anyone’s guess.
