EU Parliament adopts resolution on online gambling: part I

In September 2013 the European Parliament adopted resolution ’2012/2322(INI) – 10/09/2013′ in Strasbourg by 572 votes to 79. The resolution is a follow up from the European Commission’s communication “Towards a comprehensive European framework for online gambling” from October 2012, the so called ‘Action Plan’. MEP Ashley Fox responded to the Action Plan. 

The EU’s Internal Market and Consumer Protection (IMCO) committee, however, altered Fox’s report to allow Member States greater discretion in determining national strategies for regulation and, significantly, who will be permitted to operate in their jurisdictions.

Thus, online gambling seems to have attempted to transcend intra-state borders in the EU, and, although top level EU regulation of online gambling remains out of the question for now, one thing is clear to see from Parliament’s actions – gambling is not an ordinary economic activity. Individual Member States have, over time, agreed on key issues that need to be addressed collectively which are now recognised at EU level. The critical areas lie in consumer protection and the supposed negative impacts of gambling, such as gambling addiction. As the report states, further research is required. Mr Debrincat, Chair of the online gambling section at the Chamber of Commerce, addressed the preconceptions about the dangers arising on the Internet: “There is no evidence indicating that the online environment presents higher risks than land-based services. On the contrary, it offers a unique opportunity to detect problem gamblers and it enables an offer of responsible gaming tools such as self-assessment tests, budgets and self-exclusion…” Source: www.europarlmt.eu.

Interestingly, the consumer protection argument may be perceived as a disguise to allow market restrictions and so lawfully obstructing the freedom to offer remote gambling services.

Although there seems to be a consensus that certain matters should be addressed cooperatively the cross border trade in the realm of remote gambling remains restricted. The resolution confirms that remote gambling remains under the discretionary powers of individual Member States to govern the industry at national level. This may be seen as obstructing the Internal market. As the Remote Gaming Association (RGA) expressed in its press release [10 September 2013] “it is disappointing that in places it [the resolution] contains unsubstantiated views about the online gambling sector and these appear to have been used to justify the call for unwarranted restrictions on the freedoms normally associated with the Internal Market.”

A set of common security standards for “electronic identification and cross border e-verification” across the EU has been called for in the resolution including an edict that one player can only have one account. The Parliament also called upon Member States to collaborate on “best practices” in enforcement actions such as “establishing white and black lists of illegal gambling websites, jointly defining secure and traceable payment solutions, and considering the feasibility of blocking financial transactions…”. Amongst the demands was also a call for responsible advertising with specific regard to the protection of minors and vulnerable people. Member States were requested only to issue a licence to an operator if it meets the two following requirements and thus be deemed lawful. The requirements are 1) “the operator must have a licence which gives it a right to operate in the Member State of the player;” 2) “the operator is not considered to be illegal under the law applicable in any other Member State.”

In an abstract, the Parliament emphasised the special nature of gambling and as it is not ‘an ordinary economic activity’… “the protection of human health and consumers should be the main guiding principle when EU-level recommendations and national legislation are made.” In this regard the Parliament considers that regulation [of a national Member State level in adherence to EU laws] is better placed to provide for protection of vulnerable groups. Furthermore, the issue of addiction is particularly addressed and will need a legislation to cover the area ['for the sake of consumers'].

From the five areas that the resolution addresses, perhaps most welcomed is the advice to the Commission to ensure compliance of Member States with EU laws when regulating online gambling at a national level. On another note, some measures listed under the integrity of sports section came in for significant criticism from the industry’s professional bodies such as the RGA and European Sports Security Association (ESSA).

Khalid Ali, Secretary General at ESSA, commented on the creation of a betting right in ESSA’s press release [10 September 2013]: “There is no integrity basis for the introduction of a new fiscally-motivated right promoted by some sports. Apart from the cost of their own internal security systems, licensed betting operators already make large-scale investments in sport and pay significant sums to regulators to protect betting integrity. Those operators should not also have to pay for the corrupt activities of sports’ own participants colluding with criminals and utilising the unregulated market.”

In this resolution the Parliament has recognised and acknowledged the critical areas that need addressing which the industry has known for some time now. The European Gaming and Betting Association (EGBA), to name but one, issued its Five Point Manifesto back in April 2012 that was addressing some of the issues including better co-operation amongst the Member States. The Parliament emphasised in the resolution the“need for cooperation and exchanges of best practices among national experts from the social and health spheres, Members encourage the Member States to work in close cooperation with the Commission and with each other to coordinate steps to combat the unauthorised supply of cross-border gambling services.” Other common topics that the industry is long aware of include consumer protection, crime prevention, responsiveness to technology innovations and more. It appears that it takes much longer for legislators and policy makers to adapt to the ever faster expansion of the industry, its technology and product developments, and market growth.

The resolution can be found here and the summary content here.

Source: http://www.gbgc.com/2013/10/eu-parliament-adopts-resolution-on-online-gambling-part-i/