EU Parliament adopts resolution on online gambling – part II
By Jana Sedlakova
The European Parliament has adopted a resolution on online gambling in September 2013. The resolution addresses five areas of online gambling.
First is the specific nature of gambling and consumer protection. The Parliament acknowledges that the best way to ensure consumer protection against the downsides of online gambling is, indeed, regulation. It stresses that addiction is a problem to be addressed by legislation. The Parliament here appeals to the European Commission (EC) to call for action to fight illegal gambling. Interestingly, the resolution accepts that there is a link between the Eurozone economic crisis and an increase in gambling, particularly amongst those from poorer backgrounds. The resolution accepts that sport is monetised through gambling but should be carefully controlled to prevent crime. As the resolution states, human health and consumer protection must be ensured at a high level, regardless of the measures an individual Member State chooses to adopt in the regulation of online gambling. It stresses cooperation amongst Member States, the functioning of the Expert Group originating from the initial Action Plan from October 2012 and that those below 18 years of age should find it ‘impossible’ to access gambling services.
Secondly, the resolution deals with compliance with EU laws. The Parliament has recognised the Member States’ right to determine their national policies regarding remote gambling regulation and that the Member States should be ‘more ambitious’ in tackling the negative social downsides of remote gambling.
The Parliament also urged that any national regulation should be in compliance with EU laws. In this regard, the Parliament called for the Commission to “continue to monitor and enforce compliance of national laws and practices with EU law, in cooperation with the Member States, and to launch infringement procedures against those Member States that appear to breach EU law.”
The resolution has been adopted in an era that has seen numerous infringement cases for non-compliance with EU laws. Thus the call for compliance with EU laws has had a positive response from the industry. The Remote Gaming Association (RGA) expressed in its press release [10 September] that whilst it mostly welcomes the call for compliance with EU laws, it seemed to be disappointed in that “Unfortunately, the resolution appears to have been unduly influenced by those members of the Internal Market and Consumer Protection (IMCO) Committee who are opposed to the opening of markets to licensed private sector online gambling companies. In doing so they have repeated flawed consumer protection arguments to justify the retention of barriers to market entry”.
Clive Hawkswood, CEO at RGA, quoted in an RGA press release, said: “Although we are dubious about some of the measures called for in this resolution, we are hopeful that it will put further pressure on the Commission to act against Member States that do not comply with EU law. Compliance with the rules of the Internal Market should be the number one priority for IMCO. Many serious infringement proceedings have been outstanding for five years already and we cannot believe that Commissioner Barnier will not rectify that situation before he leaves the Commission in 2014. We are therefore urging the Commission again to fulfils its obligation as the guardian of the Treaty and bring to an end the many breaches that have unfairly blighted our sector.”
Thirdly, the resolution catered for administrative cooperation, in particular addressing the Expert Group. However, the Expert Group’s actions should not aim at increasing but minimising the needless clerical burdens that result in increased costs for opening of a national market, should a Member State choose to do so. Interestingly, “it believes that steps should be taken to bring national tax regimes for gambling services into line with one other in order to prevent disproportionate tax concessions from fostering a proliferation and concentration of online gambling services.”
In the fourth instance, Parliament addressed money laundering and welcomed the “proposed extension of the Anti-Money Laundering Directive to include all forms of gambling” and emphasised the need for registration and verification tools amongst others to prevent money laundering.
Lastly, the resolution addressed sports integrity. The integrity of sports continues to be in the spot light, the Parliament itself has issued a separate pledge on match fixing and corruption in sports earlier this year. This resolution has been criticised by the industry for a number of reasons. Whilst the integrity of sports is generally accepted as being important, the RGA expressed in its press release that it is “fundamentally wrong to imply that the licensed betting industry presents the threat. … Against this background, the unjustified call for restrictions on certain betting products is wrong and, even worse, would be ineffective. Quite simply, there is no evidence to suggest that certain types of bet when offered by licensed operators present any noticeable match fixing risks. … it is very unclear why a report about the regulation of online gambling should include support for ‘a sports betting right’ which is essentially a commercial rather than a regulatory issue.”
In this regard, the summary content of the Parliament resolution states: “Parliament recommends that sporting competitions should be protected from any unauthorised commercial use, notably by recognising the property rights of sports event organisers. It calls on sport federations and gambling operators to include, in a code of conduct, a ban on betting on so-called negative events, such as yellow cards, penalty kicks or free kicks during a match or event and to ban all forms of live sports betting since these have proved to be very vulnerable to match-fixing and therefore pose a risk to the integrity of sport. In this regard, Parliament calls on the Commission to install a European alert system for betting regulators in order rapidly to exchange information about fixed sporting events. Lastly, Parliament welcomes transnational education projects to combat match-fixing on a global level.”
Another industry body, the European Sports Security Association (ESSA), has also expressed its doubts about the resolution’s likely effects on some areas of integrity in sports. Khalid Ali, Secretary General at ESSA, said in ESSA’s press release [10 September 2013]: “It is fundamental to recognise that corrupters actually seek to manipulate the more mainstream markets with higher liquidity, not smaller niche markets such as the number of corners or penalty kicks. As Europol and others have confirmed, match-fixers bet primarily on unregulated markets. There is no evidence to support limits on regulated betting, which would be an unjustified restriction on trade based on unsubstantiated integrity grounds. The result would be to push consumers towards unregulated operators not burdened by such restrictions and where no integrity monitoring takes place. That is clearly not in the interests of consumers or the protection of sporting integrity.”