By Jana Sedlakova
European institutions are cautious when it comes to harmonising online gambling rules. The recent European Betting and Gaming Association (EGBA) five point Manifesto has, in its opinion, outlined the bottom line for a level playing field in European online gaming. Lack of harmonised policy in the EU and the exclusion from the E-Commerce Directive has left the balance of power to the discretion of Member-states’ National Authorities. A growing number of debates and consultations affirm the vast problems that fragmentation means in relation to the Internal Market, taxation, free movement of goods and services and the breach of EU laws, not to mention consumer protection issues.
Magnus Silfverberg CEO at Betsson AB sees “keeping track of the legal development in 27 member states, maintaining compliance in 3 different EU jurisdictions now (Malta, Denmark, Italy) – soon probably more jurisdictions – and paying higher (and non harmonized) taxes in different jurisdictions” as the main challenges to the business.
Online gambling remains by definition a highly political debate across Europe, hence the reluctance to confront Member-states whose approach to online gambling has arguably been in breach of EU laws. But does the sensitive nature of the topic justify the Commission’s failure to act upon such claims and, as Sigrid Ligne has stated, “indefinitely to delay its decision on a given infringement complaint on the grounds that it is unable to reach a political consensus on how to proceed”.
A further question remains as to what extent players will turn to unregulated or unlicensed services if the industry is restrained whilst demand is growing. Cross border cooperation is being encouraged for various reasons such as the widely mooted and politically acceptable notion of consumer protection. The potential contribution to public finances is less well publicised. The tax generation capacity of a growing and properly regulated pan-European online gambling market cannot be overlooked, particularly in these times of austerity.
A trade based argument for closer cross border cooperation, and perhaps regulatory unification, is that the EU market should be seen as a single entity.
Although it is generally accepted that greater attention should be paid to problem gambling and consumer protection, harmonisation of the rules has raised yet another concern. That is whether it would actually mean a positive step forward. Mandy Barrie at Gamcare whilst welcoming the debate has added that “the trick is to ensure that adopting common standards doesn’t mean falling back on the lowest common denominator – this should be an opportunity to raise everyone’s standards, not lower them.”
Innovations and developments in technology are going some way to provide customer protection but there is a knowledge gap and perhaps the key challenge now will be to understand and further capture how technology can be best utilised to implement cooperation amongst Member-states and enhance consumer protection. Paradoxically consumer protection is in fact, one of the main premises for online gambling being left to the wills of national powers, and being exempted from the European E-Commerce Directive.
Following a Green Paper consultation and European Commission communication there are high expectations that progress will be made later this year. The Communication has identified the main challenges for mutual cooperation and existence of national laws within the Internal Market, and suggests measures to be adopted at Member-state and EU level.
Businesses are no doubt keeping a close eye on the EU consultations. A multiplicity of legal regimes, the EU’s benign approach towards member states, and the political and economic turbulence of recent events across Europe from France, through to Holland and Greece yet again confirm that there is no such thing as business as usual.
It is yet to be seen how difficult harmonisation will be to adopt in practice whilst closer cooperation may be an easier pill to swallow. The fact that Member-states such as Sweden and Germany may find it hard to accommodate common rules, plus the drive towards consolidation, are both signs that we are at a pivotal point in the development of the industry; and regardless of the EU political drivers advances in technology and the scramble for market share, will continue.