The rapporteur for an EU paper on the future of online gambling, Stefano Mallia, has warned that more protection needs to be given to consumers as the situation is out of control.
“In preparation for my work to draft the EESC’s (European Economic and Social Committee) opinion on this important industry I had the opportunity to acquaint myself with what is being offered online. Although I am not a gambler I can tell you that it’s a jungle out there. There is total confusion and it’s very difficult to know which we sites are legal and which are illegal,” Mr Mallia told a public hearing on online gambling in Brussels.
The Commission is toying with the idea of introducing some kind of EU-wide regulation on online gambling, particularly with regards to consumer protection, and has published a consultation document, or Green Paper.
Currently, the sector is regulated through national regimes – something which countries like Germany favour while others like Malta and the UK resist, as they believe the sector should evolve like any other EU business activity.
However, while supporting the “liberal” business model adopted by Malta, Mr Mallia said consumers should be protected.
“One of the main challenges I am facing in the drafting of this Opinion is to keep a balance between maintaining the status quo and a total liberalisation of the market,” Mr Mallia told The Times at the end of the hearing, which was also addressed by the EP’s rapporteur, German MEP Jurgen Creutzmann, and by major players in the industry.
“At the moment most member states want to maintain national control of their individual markets. On the other hand, the on-line gambling operators want a total liberalisation of the market whereby if, for example, they have a Maltese licence they are able to operate anywhere in the EU without needing any other additional licence.
“The result is that we have considerable confusion in the market which is also allowing the black market to flourish.”
This situation, he said, was leaving consumers seriously exposed to fraud and abuse. “So one of the proposals I am pushing is to have an EU wide minimum level of consumer protection legislation that all operators licensed in the EU abide by.”
If a member state wished to have higher standards it could.
In his draft opinion, which will now be debated at the EESC’s plenary session before it is sent to the EP and the European Commission, Mr Mallia is also backing a proposal for the creation of an “EU secure gambling” mark of trust.
The idea, which is gaining ground in the industry and among national regulators, is to have this mark used by licensed operators. This will also help consumers recognise which sites are licensed in the EU.
Simon Holliday, director of H2 Gambling Capital, said the EU’s gambling market had a value of €80.4 billion last year, with online gambling accounting for a 10.6 per cent share. The industry’s share is expected to increase to 15 per cent of the total gambling market by 2015.
Malta, together with the UK, is considered to be a Mecca for hosting online gambling operators as a result of its favourable tax regime.
Both the European Parliament and the European Economic and Social Committee are expected to adopt their formal responses to the Commission’s Green Paper next month.