19 February 2010

European Parliament: Online gambling - a roll of the unregulated dice?

A number of MEPs urged Internal Market Commissioner Michel Barnier to come up with common rules to regulate cross border online gambling in Europe. In a debate on 11 February many MEPs were concerned about the effects of gambling on minors, addiction and money laundering.

With gambling being a €70 billion industry in Europe online firms are hoping to break into this national market. This has brought tension and the European Court of Justice has upheld the right of nations to regulate online gambling.

The tension between the EU's internal market and the right of national regulators to monitor the trade lies at the heart of the legal confusion over online gambling. At present no rules on online gambling exist. Several countries have tried to ban cross-border online betting and the European Commission launched proceedings against them for flouting internal market rules. However, the court's decision to uphold a case where Portugal banned a company based in Gibraltar has shaken things up.

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"Can and must be regulated"

Speaking in the debate Michel Barnier promised a "new approach" with a Green paper on possible policy options by the end of the year.

Thursday's debate was in response to an Oral Question tabled by five MEPs led by the Chair if the Internal Market Committee Malcolm Harbour. Speaking in the debate, the British Conservative said, "it is absolutely the right time for the Commission to be coming out with a clear strategy". He went on to say that online gambling "can be regulated and must be regulated".

However, Mr Harbour stressed the importance of giving people the right to choose: "We must also respect our citizens and the fact that many of them want to access online gambling" so "it can't be right to ban online gambling with a company from outside your own country".

States should not be forced to open markets

Andreas Schwab of the European People's Party called for "uniform cross-border solutions at the European level". The woman who steered the services directive through Parliament in 2006, German Socialist Evelyne Gebhardt called on the Commission to stop "quite improper" infringement procedures. She said "member states should not be forced to open market up if their controls are strong and effective and we want the Commission to finally understand this".

For the Greens, Heide Ruhle said that European rules should respect "European specificities".

"These are not services just like any other"

In terms of the possible legal and social dangers of gambling Dutch MEP Dennis De Jong of the leftist GUE/NGL told the House "we should limit online gambling as much as possible and we should ask the Commission not to lower the level of protection".

Speaking at the end of the debate, Mr Barnier said, "make no mistake; I have come to talk about a new approach". He went on to say "these are not services just like any other. Fighting cross-border crime without a European approach is impossible. We have to have strict limits so that minors can't play and on this we need EU coordination".

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press release of the European Parliament

12 February 2010

Online Gaming and Betting: Barnier to take the lead

Brussels, 11 February 2010

EGBA welcomes the commitment made by the newly appointed Internal Market Commissioner Michel Barnier to address the situation of gaming and betting at EU level.

Addressing members of the European Parliament today, Commissioner Barnier confirmed that the analysis of the Commission Legal Service regarding the most recent European Court of Justice ruling (Santa Casa, C-42/09) does not change fundamentally the Commission’s approach towards infringement procedures. The Commissioner said that the Santa Casa ruling of 8 September 2009 was based on considerations specific to Portugal and to its national monopoly operator. The Commission will therefore continue to examine the compliance of national legislation with EU law on a case-by-case basis.

Sigrid Ligné, Secretary General of the EGBA, comments “With several Member States currently reforming their gaming and betting legislation, this is an important confirmation that the Commission will not stand by while Member States introduce restrictions that go against fundamental principles of the EU”.

She adds “We believe that the respect of Internal Market rules in our sector will promote high standards and improve the protection of players throughout the EU”.

EGBA also strongly supports the Commissioner’s intention to engage in a broad consultation with stakeholders and to work on a political document, based on reliable figures and a clear diagnosis of the situation in Europe. The Commissioner raised the prospect of a Green Paper on gambling, a move which EGBA believes could offer a real opportunity to test the interest and support of the European Parliament and Member States for future EU harmonization in the sector.

For further information or comment please contact:

Sigrid Ligné: +32 (0) 2 2567527

27 January 2010

ECJ: No exception to the primacy of EU law over national gaming legislation says Advocate General Bot

Brussels, 26 January 2010

The European Gaming and Betting Association (EGBA) welcomes today’s opinion of Advocate General (AG) Bot in the betting case involving Winner Wetten (C-409/06) before the Court of Justice of the EU (CJEU). The opinion confirms that the primacy of EU law over national gaming legislation does not allow for any exception or transitional period. AG Bot dismissed the argument of Germany and other Member States that they should be allowed to have such an exception. Member States therefore have to immediately stop applying national gaming legislation that is not consistent with EU law.

This case involves Winner Wetten, a company located in Germany, accepting bets on behalf of an online betting service provider based and licensed in Malta. The Court in Cologne asked whether governments are allowed to continue to apply for a transitional period gaming legislation that is not compatible with the freedom of establishment and freedom to provide services provisions in the EU Treaty. The Cologne court considered North Rhine-Westphalia´s law on sports betting in force in 2006 to be inconsistent with the freedom to provide services as interpreted in the Gambelli ruling.

AG Bot clarified that there are no legal arguments to allow for an exception to the direct application of the Treaty to the gaming and betting sector. In addition, AG Bot confirms that it is not in the interest of consumers to maintain non EU compliant legislation that does not offer consistent and systematic protection. According to AG Bot, such ´legislation is itself inappropriate for the protection of consumers´ (para 113).

Secretary General Sigrid Ligné comments: ´This opinion is crucial for developments in Germany. The AG has made clear that EU law prevails and that unjustified restrictions are not admissible even for a transitional period. Today’s opinion will further fuel the current political debate on online gaming in Germany´.

Sigrid Ligné further adds: ´We agree with the conclusions of AG Bot. Essential is AG Bot´s confirmation that it is detrimental to consumers to have national gambling legislation that doesn’t offer consistent and systematic protection. Many Member States do not have consistent and systematic gambling legislation; this opinion clearly strengthens our argument.´

A date for the ruling of the CJEU has not yet been set.