By Jana Sedlakova
The European Commission (‘the Commission’) set out the action plan for online gambling at the end of last month [23 October]. This follows on from July when Internal Market and Services Commissioner Michel Barnier called for action and to promote a set of common principles that the gambling industry in the European Union (‘EU’) would be governed upon.
As the EU online gambling laws are highly varied with a bias towards ring fenced models, there is also the matter of free movement of services that causes so much debate. National legislators are allowed to protect their public interests and thus restrict the services. ‘EU wide legislation’ is not supported in the action plan, but a “set of actions and common principles on protection” is proposed.
“Any EU law intervention has had to rely on the so-called “fundamental freedoms” of the EU Treaty, i.e. that national gambling legislation infringes either Articles 49 and/or 56 of the Treaty by imposing unjustifiable restrictions on the freedom of establishment of nationals of one Member State in the territory of another or imposing unjustified restrictions on the freedom to provide services throughout the EU.
Under the framework of the EU and its policies it can be difficult to deal with these complexities on a national level and even hard to imagine for it to so continue in this way. The fragmented regulatory environment in the EU calls for these measures and the objective of the plan to deal with this. The known risks to end users arising from the cross border nature of the services, particularly if unregulated, is one to be addressed.
One may question whether tax revenues are not in fact a bigger impediment to the plan. Reading between the lines, it is the tax issues that stand behind the reluctance to open up one’s market. This makes it challenging to tackle the cross-border nature of the Internet when it comes to gambling.
An expert group will be established this year that would “facilitate exchanges of experience on regulation between Member States”. It says that it would be helpful in developing a “well-regulated, safer online gambling sector in the EU” and to move consumers towards regulated sites. The expert group is anticipated to meet first in December 2012.
The Commission also recognises the requirement for increased protection of ‘vulnerable groups’ [“75% of EU citizens under the age of 17 use the Internet”]. This has been addressed by promoting technology development and in particular “better age-verification tools and content filters” as well as stressing the importance of responsible advertising and “increased parental awareness of the dangers associated with gambling”.
Understandably, the paper discusses fraud and money-laundering which has become one of the priorities. It is appreciated that from the nature of the industry itself fraud prevention is rather difficult, and that Member States are unable to “effectively apply anti-fraud mechanism”.
A similar approach is taken to tackling another issue, the integrity of sports. High level of cooperation is a prerequisite. The Commission will encourage “faster information exchange, whistle-blowing mechanisms, and overall cooperation at national and international level between stakeholders, operators, and regulators to preserve the integrity of sports, as well as better education and increased awareness of sportspeople.”
Three recommendations are listed to be adopted by the Commission to the Member States. “i) common protection of consumers, ii) responsible gambling advertising and iii) the prevention and fight against betting-related match-fixing.” Other discussion points include ” support to the benchmarking and testing of parental control tools; the extension of the scope of the anti-money laundering directive; and the promotion of international cooperation for the prevention of match-fixing.”
In the last part of the press release, the Commission has not left untouched the infringement issues and stated it will ask for an update information from all of the Member States taking part in the cases that are open since 2008. It will enquire about the development of national legislation in this regard. Requests will also be made to those states whom against complaints have been lodged.
It is equally important that the licensed private sector online gambling industry is treated fairly and in accordance with EU law. At the moment there are over 30 complaints against Member State laws and regulations that are apparently in breach of EU law. There has been no action since 2008 on a single complaint or infringement proceeding. The Commission’s credibility as guardian of the Treaty can only be guaranteed if it now proceeds with the rapid and substantive action that Commissioner Barnier has indicated will take place”.