Thursday September 8, 2011 : Should EU nations be given the option of banning online gambling outright or accepting EU-wide minimum standards?
 
A conference of European Union parliamentarians and industry representatives discussed the controversial question of online gambling regulation this week, examining a thorny problem in which fragmented regulatory approaches have complicated free access to many EU markets, triggering a plethora of court actions by aggrieved companies fighting individual state monopolies and stand-alone regulatory regimes, and European Commission infringement actions.
 
It has been clear for some time that a harmonised approach has so far proved difficult of achievement as the 27 nations making up the EU adopt different policies to internet gambling and its cross-border nature.
 
Policymakers and operators alike at the conference appeared to be broadly in favour of introducing EU-wide legalization to govern the online gambling market. But many states felt that common rules should not prevent individual member states from regulating online gambling as strictly, or as liberally, as they desire, making harmonisation difficult.
 
"There's an appetite for action at EU level and it's up to the College of Commissioners to decide what to put in its communication, which will come out in 2012," Pamela Brumter-Coret, acting director of the European Commission's Directorate-General for the Internal Market and Services, told the gathering, which took place Tuesday at the European Economic and Social Committee (EESC).
 
German liberal MEP Jürgen Creutzmann, who has been tasked with drawing up the European Parliament's response to the Green Paper consultative initiative (see previous InfoPowa reports), wants the European Commission to table a directive establishing EU-wide minimum standards…but he appears to prefer a regime in which individual states are allowed flexibility to exceed the EU requirements or even ban online gambling entirely.
 
"Member states should be able to decide how to regulate online gambling themselves," Creutzmann told conference delegates, adding that there should be an obligation for national regulators to keep each other informed on their policies, and to communicate incidents of fraud or the revocation of licenses.
 
The man responsible for formulating the European Economic and Social Committee's response to the Green Paper, Steffano Mallia, seemed to agree with Creutzmann, saying: "I want an EU-wide framework that offers a minimum – not low – level of protection for consumers. But member states should be able to go further if they want."
 
"Online gambling is a reality we cannot ignore and has major economic and social effects," Mallia continued. "There is a need for EU-wide action and having 27 isolated systems – the current status quo – is not on."
 
Mallia went on to suggest a Europe-wide "safe and acceptable" list of properly licensed operators, and determined enforcement actions against illegal operators.
 
Creutzmann referred to one Green Paper proposal that an EU Secure Gambling Mark be established, commenting that such a mark would indicate only that a minimum EU standard had been achieved, and noting that nations that chose to impose stricter regulations would possibly want a seal that conveyed this at national level.
 
There was some discussion on the dangers of corruption in sport, and the common desire among regulators, sports organisations and operators to root out such issues, which were bad for the credibility of all involved.
 
Some operators expressed concerns about the effectiveness of EU regulatory legalization unless betting companies were closely involved and supportive.
 
"We welcome strong regulation and would like to see it across Europe, said Malcolm Bruce of online gambling group Betfair. "But it will be hard to find regulators that are competent enough to regulate the online gambling market.
 
“Companies must take the lead, because they are on top of technological developments. Regulation is always behind technology," he observed.
 
Other industry spokespersons warned against the danger of different nations duplicating regulatory requirements from one country to another, cautioning that this increased the financial burden faced by businesses trying to obtain licenses in different jurisdictions.
 
"We need common standards and should use guidelines published by CEN (the European Committee for Standardisation)," said Sigrid Ligné, secretary-general of the European Gaming and Betting Association (EGBA), which represents major online operators like Bwin, Party Gaming, Unibet and BetClic.
 
Using France as an example, she said that operators had to lay out some Euro 8.7 million to receive a licence. "We can't duplicate this 27 times," she pointed out.
 
"If the rules are unclear and are producing many infringement procedures, then why not improve them?" asked Harri Syväsalmi, director for sport in the Finnish Ministry of Education and Culture.
 
"Several recent EU presidencies have tried to deal with this. You need to have a consistent gambling policy: online is not a different ball game, merely a different distribution channel," he said.
 
Philippe Vlaemminck, a partner at Brussels-based law firm Altius, commented that at present the principle of mutual recognition is not applied in the online gambling sector.
 
"Member states are free to do as they please, regardless of what the others do," he claimed.
 
"Regulation requires a legal framework. The courts are now fed up [with ruling on online gambling] and it's time for a political approach."
 
Where to from here?
 
The European Parliament and the European Economic and Social Committee will adopt their formal responses to the Commission's Green Paper in October. These, and other responses, will then be considered by the European Union executive, which will then decide whether to table draft legalization to regulate the online gambling market, possibly sometime in 2012.