31 January 2008

EGBA welcomes European Commission’s decision to launch two further infringement proceedings against Germany and Sweden

Online gaming and betting association commends landmark infringement procedure against the Swedish online poker monopoly and decisive action against the German Interstate Treaty

The European Gaming and Betting Association (EGBA) commends the European Commission’s decisive action against the German Interstate Treaty on Gaming at today’s Commissioner Meeting in Brussels. The Commission has taken a clear position against the newly adopted Treaty by issuing a letter of formal notice which is the first step in EU infringement procedures. Furthermore, the Commission has also addressed a letter of formal notice to Sweden with regard to “all national measures relating to poker games and tournaments”.

The German Interstate Treaty, which seeks to ban all online gaming and betting (except for horse racing) in the country, came into force on 1 January 2008 despite formal objections raised by the European Commission under its notification procedure (Directive 98/34/EC) that the Treaty transgressed EU law. This is the first time that the Commission addresses a national gambling legislation not only on the basis of the Freedom to provide services (article 49 of the EC Treaty), but also on the basis of the Freedom of establishment (article 43) and the Free movement of capital and payment (article 56). In particular, the Commission challenges “the total prohibition of games of chance on the Internet; notably sports betting; …advertising restrictions on TV, on the Internet or on jerseys or billboards; and the prohibition on financial institutions to process and execute payments relating to unauthorised games of chance. In addition questions are raised regarding the authorisation regime to be granted to intermediaries as well as the criminal sanctions or administrative fines provided for in cases of organisation, advertising and participation in on-line games of chance.”

EGBA Secretary General Sigrid Ligné commented “By commencing these broad proceedings only thirty days after the Treaty entered into force, the Commision shows its determination to fight restrictions and in particular prohibitions, which are not backed by genuine consumer protection or public order interests. What happened in the US proved that prohibition cannot be the answer. Trustworthy and highly transparent online gaming companies abandoned the US market, thus paving the way for a grey market in which no guidelines whatsoever exist in terms of consumer protection, prevention of compulsive gaming and protection of minors”. EGBA lodged a formal EU complaint against the new German legislation early January alerting the Commission not only on the inefficiency of the prohibition but also on its adverse effects.

The Commission’s action against the Swedish poker monopoly operated by ‘Svenska Spel’ is the first EU infringement action involving online poker. Since March 2006, Sweden has been expanding its monopoly by operating online poker services, while preventing EU-licensed operators from offering their online poker services in the country. This is also the second proceeding opened against Sweden’s protectionist gaming legislation. A first procedure focusing on sports betting restrictions was launched in 2006. The next step in this infringement proceeding would be the referral to the European Court of Justice.

Today’s action against Sweden demonstrates that the Commission’s competence to scrutinise the Member States’ compliance with EU law is not limited to sports betting. National rules related to cross-border poker services are also expected to meet EU requirements and be consistent with a global national gaming policy.

Sigrid Ligné, Secretary General of the EGBA added: “This decision is an important development for EU-licensed operators as it confirms the support of the Commission to guarantee our members’ right to a fair market access both for sports betting and poker services. This decisive action against the German Interstate Treaty and Swedish poker monopoly sends a clear message to all EU countries maintaining or instigating antiquated protectionist gaming regulations. We applaud the commencement of infringement procedures and encourage the Commission to extend these proceedings against other countries that are also contravening EU law”.

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