Review of EU Gambling Regulation in 2012
By Jana Sedlakova
There were a number of significant events last year in the European Union relating to the e-gaming sector. Needless to say the United Kingdom is not left unaffected.
There is impetus in the UK to move towards a ring fenced model which is already established in a number of EU Member States. In the UK, in addition to the Draft Bill that proposes licensing changes, there is another regulatory change that is likely to be seen. The public consultation for the proposed merger of the Gambling Commission with the National Lottery Commission [the new UK Public Bodies Act 2011] was open between July and October 2012. Interested parties had a chance to submit their comments or opinions on the proposed way of cutting public spending.
In spring 2012, the European Gaming and Betting Association (EGBA) issued its Manifesto and called for greater cooperation particularly in light of consumer protection. In July 2012 it was Commissioner Barnier calling for action which was then followed by the publication of the European Commission’s action plan in October 2012, regarded by some as an ‘action plan with no action’.
It is yet to be seen what the Expert Group, the establishment of which was declared in the EC Action Plan, will achieve in the next couple of years when its existence is planned to be assessed.
In June 2012, some 60 companies applied for a licence in Spain. Spanish regulation was linked to a highly controversial back tax. William Hill was amongst those granted an e-gaming licence in Spain. One of the much debated issues in Spain was customer taxation. In September, a new interpretation was allowed and thus players are now permitted to deduct their losses.
In June 2012, some 60 companies applied for a licence in Spain. Spanish regulation was linked to a highly controversial back tax. William Hill was amongst those granted an e-gaming licence in Spain. One of the much debated issues in Spain was customer taxation. In September, a new interpretation was allowed and thus players are now permitted to deduct their losses.
In August 2012, William Hill lost its legal battle in the judicial review to rule that Betfair’s users were acting as bookmakers and should be subjected to pay the horse racing levy.
Italian remote gambling saw significant changes in 2012. Liberating the online bingo and slots regulation brought approval from Italian e-gaming licensees. Elsewhere, in the German state Hesse, licence applications were welcome until 7 January 2013 which had been extended from the original December closing date. This follows the changes in Schleswig-Holstein which already awards licences for sports betting. This state alone has had a very eventful year indeed. In late December 2012 it was reported that Schleswig-Holstein has given its authorisation for online casino products to twelve operators. This authorisation includes online poker which is interesting in its own right, as the inclusion of poker in German regulation has been widely discussed in the past. There are a number of specific requirements that need to be fulfilled in this state from the consumer perspective to ensure his protection. The Netherlands is also due to release their regulation draft in early 2013.
Italian remote gambling saw significant changes in 2012. Liberating the online bingo and slots regulation brought approval from Italian e-gaming licensees. Elsewhere, in the German state Hesse, licence applications were welcome until 7 January 2013 which had been extended from the original December closing date. This follows the changes in Schleswig-Holstein which already awards licences for sports betting. This state alone has had a very eventful year indeed. In late December 2012 it was reported that Schleswig-Holstein has given its authorisation for online casino products to twelve operators. This authorisation includes online poker which is interesting in its own right, as the inclusion of poker in German regulation has been widely discussed in the past. There are a number of specific requirements that need to be fulfilled in this state from the consumer perspective to ensure his protection. The Netherlands is also due to release their regulation draft in early 2013.
The EC Action Plan declared its commitment to progress and take action upon any EU law infringement cases [some of which go as far back as to 2008]. Furthermore new cases have arisen. The EGBA together with Remote Gaming Association openly challenged the proposed Greek regulation. Clive Hawkswood, Chief Executive of the RGA, said in their press release [14 November] “These measures have clearly been introduced in haste and we cannot believe that they have been approved by the European Commission. They are blatantly protectionist in nature and if EU Internal Market rules mean anything then the European Commission must take prompt action to make Greece reconsider. However, for obvious reasons, we are also looking at potential action in the Greek courts.”
Sigrid Ligné, Secretary General of EGBA said in their article calling for the EC to safeguard the notifications: “Commissioner Barnier recently confirmed that the he would take his responsibilities seriously in ensuring the compliance of Member States’ gambling legislation with EU law. We trust the Commissioner will urgently investigate our complaint and take action accordingly against Greece as well as on several other pending complaints.” Betfair has confirmed its withdrawal from Greece, and others followed soon after. Cyprus too has been seen this year to push through a controversial gaming legislation.
The years of long uncertainty as to the status of the infringement cases, that could raise questions about the legal state of affairs in the EU and its establishment, have been promised to be dealt with in the October EC action plan.
The years of long uncertainty as to the status of the infringement cases, that could raise questions about the legal state of affairs in the EU and its establishment, have been promised to be dealt with in the October EC action plan.
Sigrid Ligné, Secretary General of EGBA said in their press release [23 October]: “We are very pleased with the EC’s decision today to take formal action against non-compliant national gambling laws. We expect litigation at EU level to swiftly restore legal certainty for our sector in Europe. Unjustified restrictions and protectionist regimes have been hampering the sustainability of EU operators for far too long. This is a good day for the online gambling sector in the EU.”
Concerning the promise in the EC Action Plan to address the infringement cases of EU law, Clive Hawkswood, Chief Executive of the Remote Gaming Association, said in their press release [14 November]: “Although we welcome the Commission’s commitment to take action, it will be meaningless unless they move swiftly and firmly to protect both the principles of the Internal Market and, indeed, EU law itself. By its own admission the Commission has concerns about the regimes in many countries, but the regulations being imposed in places like Belgium, Greece and Germany must surely be an affront to anyone at the Commission who truly believes in a fair, safe and competitive market within the EU.”
There is a mix of regimes within the EU, and it does make some sense to have the services exempted from the e-Commerce Directive on consumer protection grounds but these must be proportionate.
There is a mix of regimes within the EU, and it does make some sense to have the services exempted from the e-Commerce Directive on consumer protection grounds but these must be proportionate.
Developments, such as those in Belgium which has practically created ‘hostile’ market conditions, do not help the e-gaming sector and, if unaddressed, may be followed by other Member States.
Reviewing the events of the past year it seems very unlikely and distant that the online gambling market will be open across borders within the EU. The strategic decisions of some e-gaming operators such as William Hill and Betfair shows they recognise this too and are aligning their operations accordingly.
Reviewing the events of the past year it seems very unlikely and distant that the online gambling market will be open across borders within the EU. The strategic decisions of some e-gaming operators such as William Hill and Betfair shows they recognise this too and are aligning their operations accordingly.