European Parliament conference “How to Regulate Betting and Gambling in Europe – Track record and future perspectives”
by Jana Sedlakova
Last month Commissioner Barnier’s speech affirmed the trend in Europe towards the unified understanding of certain requirements for governing the online gambling industry. Respecting “subsidiarity” as a general principle of EU law will be key. The European Parliament has accepted this and called for an EU wide regime. The single licensing regime is one of the items on the European Gaming and Betting Association’s (‘EGBA’) ‘wish list’.

Victor Chandler, for one, would support this concept. Michael Carlton, CEO at Victor Chandler commented:
“we would strongly support the concept of a single licence across the EU. As I have said previously, only proper reciprocal arrangements which would recognise licences issued in one part of the EU with the harmonisation and common standards this would require are capable of delivering a truly pan-European competitive industry with the best chances of ensuring consumer protection and the prevention of fraud. Our call is for the Commission to remain committed to this objective, rather than be diverted into protectionist agendas of individual Members States or monopolistic concerns.” 

As stated in the Remote Gambling Association’s (‘RGA’) press release of 28 June:
“Commissioner Barnier used the opportunity of the Parliament’s event to give MEPs, some national authorities and stakeholders an outline of the upcoming Commission’s Communication on online gambling in the Internal Market, which will include an action plan. He advocated EU action in the field of online gambling given the cross-border and even global nature of that activity and the difficulty for Member States to respond alone to the challenges that it poses.” 
Sigrid Ligne, General Secretary at EGBA, explained “what is not necessarily at stake for the time being is a sector specific directive. But we are moving towards an EU framework for online gambling starting with the development of a common European base of principles and consumer protection measures, of efficient age verification tools to prevent underage gambling, the inclusion of the sector in the money laundering directive, the introduction of responsible online gambling advertising rules. Commissioner Barnier also referred to a package of measures to tackle issues such as identity theft and the security of online gambling equipment. These are highly relevant areas to be tackled at EU level.”
Michael Carlton said that the main obstacle in the current regulatory regime “is the plethora of different licensing and regulatory regimes that are cropping up in Europe. This is happening because of the lack of clear direction and harmonisation at EU level. The fragmentation and burden caused by such lack of harmonisation is not sustainable in the long run.” 
Barnier has established that the role of the Commission is to help the Member states govern online gambling in such a way that would take account of national particularities whilst conforming to the EU Treaties. He emphasised the importance of increasing consumer demand for online gambling relevant to the ‘legitimate expectations of operators’ and the need of consumer protection.
To his question whether there is added value in consumer protection and appreciation of the subsidiarity principle, Barnier answered “yes, because no Member state can deal alone with all the risks associated with this activity” whilst expressing that the value added may materialise in different ways. Firstly, he said “more effectively clamping down on the many illegal websites, often hosted in offshore havens; [secondly] developing – where this is allowed – a legal alternative which is attractive enough to permanently undermine any clandestine and therefore unregulated offers; [and thirdly] it can – and must – also take the form of support measures to prevent any undesirable drift that could stem from an uncontrolled development of online betting and gambling.” 
Commissioner Barnier’s speech also intimated that following industry rhetoric the time for action has now come. In his detailed response the areas he pointed to in his action plan were: (1) to protect consumers (and citizens), (2) fraud prevention, and (3) maintaining the integrity of sport.
As part of fraud prevention a proposal to extend the Money Laundering Directive to gambling and betting was announced. 
Sigrid Ligne responded “we are generally supportive of the sector’s inclusion in European legislation as it will improve legal certainty and market access conditions for European operators. Multi-licensed operators are currently facing very fragmented and sometimes contradictory requirements in various Member States. Consequently we would welcome a more harmonized and risk based approach for the upcoming 4th Anti Money Laundering Directive with a focus on Know Your Customers rules (KYC) to improve the electronic verification of customers.”
Michael Carlton, of Victor Chandler said “we support the extension of these anti-money laundering requirements to gambling and betting. We believe all measures that will ensure that this industry continues to be licensed and regulated in the best possible fashion must be positive and that the position of Gibraltar as a premier jurisdiction in the sector is maintained and enhanced.”
Concerning the integrity of sport a ban of certain betting types on some sports has been proposed. 
Sigrid Ligne has expressed that “it has been mentioned as one option, but preventing European regulated operators to offer certain gambling products will have no impact on the integrity of European sport. As already established by an expert workshop on sport integrity organized by the European commission in May 2010, risks do not emanate from regulated operators or betting products as such “but from unregulated online gambling offers mainly coming from Asia”. Such bans would only push consumers to seek those products on the black market or outside of the EU jurisdiction. Enabling regulated operators to offer popular and attractive products is the only efficient way to cut off the lifeblood from unregulated, black market operators, and to minimize the possibility of fraud.” 
In order to implement the action plan Commissioner Barnier emphasised the importance of Member state involvement and administrative cooperation whilst supporting national distinctions where legitimate; whilst conforming to the EU laws. Michael Carlton said that “increased cooperation will generally be welcomed by us [Victor Chandler] given it would open the door to more harmonised standards and, therefore, a genuine pan-European market. This is desperately needed to ensure that we can retain our competitive edge against US and Asian operations that will be challenging the pre-eminence of the European operators.”
Concerning infringements relating to the Internal market RGA in their press release stated that the Commission has not made any formal decision since February 2008, “apart from the closure of some of them. This inaction means that none of the eleven Member States that were the object of an infringement procedure in 2008 have been taken to the ECJ. Furthermore, the Commission has not proceeded so far with any of the internal market complaints lodged by the online gambling industry against other Member States’ gambling laws.” 
Clive Hawkswood, RGA Chief Executive, quoted in the press release said: “we can only welcome any action on infringements, considering that many Member States seem to have assumed that EU law will never be enforced against them. However, we do not know yet the content of the Commission’s red lines and whether effective action will be taken against Member States who are found to be violating them. We very much hope that Commissioner Barnier’s announcement will lead to some meaningful results before the end of his term”. 
The RGA welcomed the speech’s suggestion that seemed to confirm the status of the “Commission as Guardian of the Treaties” and claim that whilst the Commissioner Barnier’s commitment is “encouraging”, “concrete action will be needed if real change is to be brought about, especially when so many Member States remain non-compliant with EU law.”
Michael Carlton said that “we would like to see the European Commission engaged more proactively in supporting the single market. The online gaming sector is one example of an industry in which European companies genuinely lead the way at a global level. This runs a real risk of being severely undermined by the lack of an EU-wide framework. Whilst we, therefore, fully support administrative cooperation among Member States to increase consumer protection and prevent fraud, we look forward to the Commission moving towards Member States adopting a competitive, European-wide licensing and regulatory regime. We see no reason why online gaming should not be a service capable of being provided on a full cross-border basis with reciprocal recognition of licences being the norm as is the case with financial services and other areas of economic activity where the rights of consumers and integrity issues are equally of fundamental importance.” 
He also believes that “technology which covers harmonised arrangements and, therefore, could be structured to provide efficiencies on a cross-border basis would certainly provide much better consumer protection, fraud prevention and ensure the integrity of sport than individual and fragmented state regulatory compliance requirements. The current trend of piecemeal regulatory response within the EU will only make matters worse unless the Commission steps in to ensure coherence and harmonisation. The matter is also critically important given the whole future of e-commerce within the EU.” 

Read further comments from the EU meeting on gambling regulation here