Who Regulates the Gambling Regulators?
The current phase of regulation of the gambling market in EU jurisdictions is now almost over. Following the Spanish Gambling Regulation Act reaching the statute book, there is only one big jurisdiction left which has not yet regulated its gambling industry according to the EU legislation and European Commission (EC) directives – Germany. Other jurisdictions, such as Greece and Denmark, have yet to complete their journey to regulation, but they are not that far from the finishing line.
It is no secret that many countries were pushed into changing their legislation by court cases brought by commercial operators and infringements proceedings started by the EC. It is not too much of an exaggeration to say that some governments had to be dragged kicking and screaming to allow private operators into the national gambling market. Many countries did the minimum amount that was sufficient to stop EU infringement proceedings and designed regulatory frameworks that favoured, if not outright protected, their state-owned gambling monopolies. Additionally, just to make sure that commercial operators are not too successful, these same governments also imposed a high tax rate. France is a classic case study of this course of action and to a certain extent Spain and Greece are following French footsteps. Germany cannot bring itself to walk even that far.
Within this mix, regulators are given a wide remit to keep a check on commercial operators.
The role of regulators has up to now not been sufficiently analysed. Are they independent entities who regulate the market, similar to a Financial Services Authority or a Central Bank for the financial sector? Or are regulators in the gambling industry solely an arm of the country’ executive?
So far, the pattern of behaviour of gambling regulators leads observers to think that they act more like the arm of governments than independent referees.
France is the case in point. The state controlled PMU and FDJ’ dominant position in land-based gambling activities (where they are protected by law) allowed them to gain a competitive advantage in online activities, even thought the law states they have to separate their land-based and online businesses.
One has to wonder if the reluctance, or frustration, of certain governments in allowing commercial gambling operators to trade is being reproduced in the actions of regulatory bodies.
It is in the interest of a properly functioning market that gambling regulatory bodies are independent, and seen to be independent. Additionally, regulatory bodies need to acquire high calibre professionals with expertise of the gambling industry and the required skill sets to allow them to conduct their supervisory role in an efficient manner.
It is what everyone expects for regulators in the media/broadcast or financial sectors, why should it be any different for the gambling industry?