The need for some sort of EU legislation on online gambling is gaining ground in Brussels following a green paper on the sector presented by the European Commission last March.
In a hearing organised by the European Parliament’s Internal Market Committee online gaming operators seemed to converge towards the conclusion that EU regulations would prevent the fragmentation of the internal market in this sector.
Germany’s Jurgen Creutzmann from the Liberals who is drafting a new report on the issue said he intends to draw on the input from this hearing and to take into account the opening of this market in certain member states. He also said he would take note of recent EU Court of Justice case law clarifying rules in this area.
He said that the key question is to respect the subsidiarity principle, which gives member states the choice of whether to open the online gaming market in their territory or not while determining areas where cooperation at European level would make sense, particularly in relation to protecting players or fighting crime.
Malta, considered to be one of the leading member states when it comes to online gaming is against specific regulation of the industry preferring that this is done under the normal EU competition and internal market rules. At the same time it agrees with more regulation with regards to protecting consumers and claims to have one of the most modern regimes in this sector.
Jean-François Vilotte, head of the French gambling regulator, presented a positive assessment of the opening of the French market since May 2010. He emphasised protection of the honesty of gaming, the sport ethic and the betting levy, a French speciality that passes on to the horse-racing sector and sports organisations part of the gains from gambling on their activities.
Peter Reynolds of Remote Gambling, and also speaking for the association of private operators (EGBA), stressed the constraints on operators that make the market unattractive given the 27 different sets of rules, which tends to boost demand for illegal activity. He stressed the will of members of the association to provide responsible protection for consumers.
Friedrich Stickler, speaking on behalf of state lotteries that finance charities and defend sports values, suggested that the European Parliament rapporteur highlights the importance of protecting nationally licensed bodies from illegal competition and the need for cooperation by member states on this point.
Although Brussels has repeatedly stated that its green paper is just intended for consultation purposes and aims to “gather information”, many in the multi-billion euro industry fear that it’s the first step towards the possible harmonisation of rules across the 27 member states.
That will not be in Malta’s interest as it disagrees with the majority of member states which want specific and harmonised regulation. Malta and the UK, the two main players in the EU’s gambling industry, prefer a liberal approach where the common EU internal market rules on cross-border services prevail.
According to the Commission’s analyses, Malta has the largest number of registered online gaming companies in the EU – 500 by 2008 – and its share of revenue from gambling, technically known as Gross Gaming Revenue in 2008 amounted to 7.82 per cent of its GDP or 11 times more than the EU average which stood at just 0.68 per cent of GDP in the same year.
According to the Commission’s officials, despite the fact that some member states, like Germany, prohibit online gambling, it is almost impossible to prevent citizens from accessing online websites and trying their luck.