Online gambling is one of the budding sectors of Malta’s economy. Since Malta joined the EU in 2004, the Maltese government has created a safe and attractive climate for online gambling companies to do business from Malta. With some 405 licensees actively operating in Malta it is clear that the government’s strategy has paid off. But is the sector there to stay?
For a long time now, the sector has been a sore point of dispute among different EU countries. Countries such as Malta and the UK follow, let’s say, an “open market” approach to online gambling and have argued that, being a service, online gambling is subject to the freedom of establishment and the freedom to provide a service in all EU countries as established by the EU Treaty. Other member states follow a more “protectionist” approach and argue that they should have the right to allow or restrict their citizens from gambling on the net.
The European Commission, as guardian of the Treaties, acted upon these objections by launching a number of legal actions against several member states that did not fully respect the freedom of establishment and the freedom to provide a service in the online gambling sector. But, unfortunately, rather than providing clarity, the rulings of the European Court of Justice gave rise to varying interpretations leaving us none the wiser. On occasions, the Court appeared adamant on the overriding importance of the Treaty rules on the open market. On others, it prevaricated and hinted at different types of exceptions that could be used to restrict the market.
At this juncture, it is therefore important for confusion to be clarified and for legal certainty to prevail. This onus lies on the European Commission which, in March this year, took the initiative and published a Green Paper on online gambling.
The Green Paper kicked off a consultation process to help the Commission decide whether the EU needed to legislate on online gambling.
In response, the European Parliament’s Internal Market Committee is now drawing up a report to express its views. And Malta’s MEPs are called upon to take a stand.
It is clear that on the issue of online gambling there are conflicting views. And these must be taken into account in the design of any such legislation if, indeed, there will be one.
On the one hand, there are economic considerations and, understandably, each country would like a piece of the lucrative cake that is the gambling sector.
On the other, there are some serious risks associated with online gambling, especially underage gambling, addiction and fraud, against which consumers must be protected.
So how do we bridge these two seemingly contradictory issues? My view is that the answer lies in adopting a common European approach to regulating the online gambling sector.
Firstly, a European online gambling market would provide a more attractive legal offering by increasing choice and providing better winnings. This would channel players away from illegal or offshore operators, which are outside the protective reach of the law but which, nevertheless, cannot be stopped from operating online.
To put it in other words, the market is there and the gamblers are there. So you either face it by providing serious but reasonable regulation or you do just an ostrich by banning online gambling altogether and then just imagine that no one will do it from the privacy of their homes.
Secondly, a European approach would establish common consumer protection rules so that consumers are granted, at least, the same minimum protection regardless of where they play in the EU. In turn, this would encourage greater cooperation among EU countries and more coordination in the fight against problem gambling, money laundering, underage gambling and fraud. And member states would then be required to start to recognise each others’ controls, thereby reducing or even removing obstacles for gambling operators.
Thirdly, given the cross-border nature of online gambling via the internet, taking a national approach is clearly ineffective. As a result, regulating it at European level makes sense and proper regulation also encourages operators to stay in Europe rather than go offshore to unregulated and shady jurisdictions.
Whatever path we choose, it is clear that there are the principles of the EU Treaty that apply and we cannot wish them away. The EU’s Single Market is the rule and not the exception.
Yet, there is still strong resistance to adopting a European approach on the lines that I have just explained above because of different national attitudes towards gambling and because of protectionist attitudes in countries where a state-owned monopoly still runs the show.
So it will not be easy to persuade EU countries to get a common line and the debate promises to be a colourful, even heated one.
In preparation for the European Parliament report, I will be holding a consultation seminar to listen to what stakeholders have to say. It will take place this Saturday at AŻAD in Valletta from 9 a.m. with the participation, among others, of Finance Minister Tonio Fenech and Swedish MEP Christofer Fjellner.
If you wish to learn more about the sector or if you would like to make your voice heard you should be there. Prior booking is required on 2122 8585 or via info@simonbusuttil.eu.
www.simonbusuttil.eu
Dr Busuttil is a Nationalist member of the European Parliament.