Advert

Regulation of online gambling

The regulation of online gambling requires streamlining, the European Commission has decided. In a recently published communication, it has set out an action plan on how to achieve some much-needed harmonisation in the regulation of this sector without, at least at this stage, having to adopt legislative measures.

Online gambling is one of the fastest growing service activities in the EU
- Mariosa Vella Cardona

Online gambling services cover a range of games of chance such as sports betting and poker, casino and lotteries. There is currently no EU-wide legislation which regulates this sector. Member states are free to set their own policies by restricting or limiting the supply of all or certain types of online gambling services in their territory quoting public interest objectives such as the protection of minors and the like as a justification. This has resulted in the fragmentation of Europe’s online gambling services market, with some member states adopting a liberal approach while others imposing an outright ban. In regulating this industry, member states must, however, at all times ensure that they are not in breach of the fundamental freedom of EU operators to provide cross-border services as enshrined in the Treaty.

The absence of harmonised legislation in this sector has led to a number of rulings of the Court of Justice of the European Union as well as to several infringement procedures against member states. The court has confirmed that the provision and use of cross-border gambling is an economic activity and hence member states must ensure that they do not hinder online gambling service providers from offering their services to recipients in any member state in breach of the fundamental freedom to provide services. National rules which prohibit the provision of gambling services authorised in other member states were often found by the court to restrict the freedom of national residents to receive, over the internet, services offered in other member states. They were also found to restrict the freedom of operators established in other member states to provide gambling services.

Both industry and policymakers have long insisted about the need of some form of legislative harmonisation in this field. In response to this, the Commission has now set out a number of initiatives which it intends to take in an attempt at clarifying the regulation of this sector.

The Commission seems to be determined to make use of the knowledge garnered from previous consultations with stakeholders and the latest case law of the CJEU, to take action to ensure that the policies adopted by the individual member states are in full compliance with EU law. Member states must be able to demonstrate that the public interest objectives which they adopt such as the prevention of problem gambling and the protection of minors are pursued in a suitable, consistent and systematic manner.

The Commission has declared that it will be sending out requests for information to the member states against whom infringement cases have been open since 2008 to get a complete update about the latest developments in national legislation. Information will also be requested from those member states against whom complaints have been registered.

The facilitation of administrative cooperation between gambling regulators is also on the Commission’s agenda as is the protection of consumers. The Commission has expressed its intention to adopt recommendations for member states on the common protection of consumers as well as responsible gambling advertising. It also believes that a common set of principles elaborated at EU level should ensure a high level of consumer protection. These principles would tackle issues such as the effective and efficient registration of players, age verification and identification controls, reality checks, no credit policy, protection of player funds, self-restriction possibilities as well as customer support and efficient handling of complaints.

Another important objective defined by the Commission in its action plan, is the prevention of fraud and money-laundering in this sector. The Commission seems to be inclined towards extending the scope of the current EU law regulating money laundering to all forms of gambling. It is also exploring the possibility of an EU standard on gambling equipment including gambling software.

The Commission has also noted that more in-depth cooperation between betting operators, sports bodies and national authorities is needed to eradicate betting-related match-fixing. From its end, the Commission intends to adopt a recommendation on best practices for the prevention and combating of betting-related match-fixing. It intends to promote faster information exchange between the relevant authorities, whistle-blowing mechanisms, and overall cooperation at national and international level between stakeholders, operators, and regulators to preserve the integrity of sports. The better education and increased awareness of sportspeople has also been identified as an indispensable tool in eradicating this phenomena.

The Commission has announced that two years from now, it will evaluate the implementation of the action plan and assess progress achieved in order to ascertain whether more concrete action is required.

Online gambling is one of the fastest growing service activities in the EU, with annual growth rates of almost 15 per cent. Statistics show that 6.8 million consumers participate in one type or more of online gambling services. In the absence of harmonised legislation regulating this sector and in view of the divergent policies adopted by the different member states, the need for legal certainty has long been felt by service providers seeking to offer cross-border services. While not offering complete legal certainty, this action plan could be seen as a step in the right direction in the regulation of this delicate market wherein both the interests of the operators and those of the consumers need to be balanced out.

[email protected]

Dr Vella Cardona is a practising lawyer and a freelance consultant in EU, intellectual property, consumer protection and competition law. She is the deputy chairman of the Malta Competition and Consumer Affairs Authority as well as a member of the National Commission for the Promotion of Equality.

Advert

Comments are submitted under the express understanding and condition that the editor may, and is authorised to, disclose any/all of the above personal information to any person or entity requesting the information for the purposes of legal action on grounds that such person or entity is aggrieved by any comment so submitted.

At this time your comment will not be displayed immediately upon posting. Please allow some time for your comment to be moderated before it is displayed.

For more details please see our Comments Policy

Comments not loading? We recommend using Google Chrome or Mozilla Firefox with javascript turned on.
Comments powered by Disqus
Advert
Advert