|
 Malta welcomes any rationalistion of the online gaming sector which is generating a generous contribution to its GDP. Finance minister Tonio Fenech speaking at a local gaming conference last month, revealed that over 250 active licenses are in play. This has been a success story with over 5,000 direct well paid jobs. But as always our continued success to be the leading hub in Europe is not guaranteed and we have seen many E.U members gearing up to compete strongly and of course enacting restrictions to protect their own gambling state monopolies.
Typically we note how various Members of Parliament stressed that online gambling operators must comply with the gambling legislation of the member state in which they provide their services and in which the consumer resides. In their opinion, most online gambling license holders operate from favourable tax jurisdictions and respect ‘country of origin’ rules regarding the provision of services.
Under the thin veiled guise of protecting consumers we note how gambling activities have traditionally been strictly regulated at national level. Again, it is customary to cite the rationale of such restrictions as the duty of each State to protect consumers against addiction, fraud, money-laundering and fixed games. Of course these barrages of restrictions go against the spirit and law of free movement of services in the unified market. This led to a number of European Court of Justice rulings on the issue and several Commission infringement procedures posted against member states to verify whether national measures limiting the cross-border supply of online gambling services are compatible with Article 49 of the EC Treaty, which guarantees the free movement of services.
The European Commission “does not exclude” alternative solutions to individual infringement procedures against member states on gambling, Internal Market Commissioner Michel Barnier said during a European Parliament plenary debate in Strasbourg, revealed the approach he will take on the topic during his term. Thus it seems that some clarification is very much overdue in this sensitive sector where member States naturally protect their interests by blocking players from gambling on foreign unlicensed websites. Last February, Michel Barnier announced that the EU executive would seek a more coherent way to address the sensitive issue. How coherent a way is to be found is subject to conjecture but at least Barnier wants to try. There are currently nine Commission infringement procedures in the area of cross-border betting on sports events online with countries including Germany, Hungary, France ,Belgium , Sweden ,Italy and Nederland’s. In this context , Barnier said, “I want to launch a constructive dialogue [on gambling] with the Parliament and member states and concerned stakeholders,” His ambition is to compile an EU Green Paper which would act as a first step forward.
Many conferences have of late tried to address the cacophony of rules and restrictions both in Europe and in US where gambling is concerned. In fact the Igaming Show held last month in Prague had a European legal session. During the session “Europe’s Legal Landscape: An Analysis of Current & Upcoming iGaming Legislation Across Europe” the legal experts Tom Lippiett of Berwin Leighton Paisner LLP and David Clifton of Joelson Wilson LL gave an overview of the changes in legislation and regulation throughout Europe over the last 12 months, as well as of the future developments likely to occur over the next year. The panel covered developments in countries such as the UK, Ireland, Belgium, Germany, Netherlands, France and Italy. The most interesting question was whether online gaming market is more tightly regulated or liberalized in the different EU Member States in the future. The session also covered recent cases in the European Court of Justice due to the fact that in the past a series of infringement procedures were opened against Member States’ gaming legislation for not complying with the freedom to provide services of the EU Treaty.
The legal landscape for online gambling is dynamic and prospective changes are altering the shape of the pan-European market. Britain, for instance, could move from a highly liberalised and commercial licensing system to a more restrictive territory based system. According to a British Government policy paper if enacted it proposes that it should be a criminal offence to provide online gambling services to British residents and to advertise online gambling in the UK, without a licence issued by the Gambling Commission. If the final version of the proposal is implemented and is tested to be compliant with EU law, then all operators licensed in EEA member states and Gibraltar as well as licensees based in the white list territories will have to apply for an additional operating licence in the UK. Likewise Ireland’s Prime Minister Brian Cowen announced that the Irish government wants to introduce a legislation that would require overseas gaming companies to obtain licences in order to operate in the Irish online market. In Belgium one expects significant changes to existing regulation on betting and gaming which are in some parts considered to be not compatible with the EU law . These could modernise and introduce more coherence in the gaming and betting legislation. However, under the new tough requirements it seems to be very difficult, if not impossible, for a foreign EU operator to obtain an online license in Belgium.
In Germany and the Netherlands the gambling landscape is dominated by state-run monopolies. The German Interstate Treaty, which prohibits any organization or brokering of public games of chance on the internet, triggered several cases ended up in front of the European Court of Justice. In light of developments elsewhere across Europe it can be doubted whether Germany will continue to maintain the existing total ban on online gaming.In the Netherlands online gambling is legal, but the government has not yet issued any licenses for online poker, online bingo and online casinos.
In contrast to the mentioned countries tightening the screws, Italy and France have partially liberalised their gaming markets and simultaneously introduced measures to supervise the gambling market. France passed a bill to allow non-French operators to apply for licences to provide online sports betting and online poker in France. The draft bill is expected to be in force soon as a good time to coincide with the start of Soccer World Cup in South Africa . Even though there is no state monopoly, the Autorite de Regulation des Jeux en Ligne (ARJEL) - the French authority of the regulation of online gambling- remains in charge of the allocation of licenses and remains also responsible for the drive against online gambling addiction and illegal websites. Italy liberalized its domestic gambling market in 2009. It is expected that Italy opens its doors to the rest of the world this year.
The AAMS, the Italian gaming authority, will probably launch new tight regulations in respect of foreign online gambling sites. Likewise Denmark took a big step forward and put a draft legislation to partially open the Danish gaming market in 2009. The new Law, which has been introduced on 26 March 2010 and is expected to come into force on January 2011, will allow authorised firms to offer their services freely for the first time and will thereby open a newly regulated Danish online gaming market. Moreover, the exclusively licensed gambling operators will be protected with payment processing bans, ISP blocking and a ban on advertising for non-licensed operators. To conclude on the subject of the maze of country specific restrictions a Herculean effort is needed to simplify the code. One hopes that the proposed E.U green paper will try to achieve this although it will not be easy. Sigrid Ligné, Secretary General of the EGBA, comments “With several Member States currently reforming their gaming and betting legislation, this is an important confirmation that the Commission will not stand by while Member States introduce restrictions that go against fundamental principles of the EU”.
Julia Otto
Law and Finance researcher
PKF Malta
info@pkfmalta.com
|
|
|
|