EU ponders region wide online gambling legislation

Back in March this year the European Commission (“EC”) released an I-gaming Green Paper seeking stakeholder views on how best to tackle online gambling regulation in the region.  The deadline for public responses closed in July and now politicians are faced with the task of considering those views, their own, and plotting a road map for action (or inaction) toward a less fragmented EU online gambling market.

To this end, an EU Parliament conference has just taken place (September 6) and a general consensus has emerged that:

1. the current state of affairs is not acceptable and EU action is warranted; and
2. EU-wide legislation imposing minimum standards and regulation could be put in place.

Change needed

There seemed to be clear consensus on this point, summed up best by the EC‘s Pamela Brumter-Coret:

“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,”

Presently there is a wide gulf in approaches taken by different EU Members; from outright bans to open, liberal markets.  There is confusion as to whether and to what extent online gambling falls within the ambit of the single market for services directive (Article 49 of the EU Treaty) and the European Court of Justice is apparently getting tired of having to rule on infringements.  Germany is their latest offender.

“Online gambling is a reality we cannot ignore and has major economic and social effects. There is a need for EU-wide action and having 27 isolated systems – the current status quo – is not on,” were the words of one delegate.

EU-wide framework

There looks to be a strong push toward establishing EU-wide regulations that would serve as a minimum operating requirement.  Jürgen Creutzmann and Steffano Mallia who are  responsible for formulating the European Parliament’s and European Economic and Social Committee (“EESC”) responses to the EC Green Paper respectively, both liked this idea.

“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,” said Steffano Mallia.

The idea of over-arching EU legislation imposing minimum regulatory standards but allowing national governments to regulate further or ban online gambling altogether if they they wish to do so throws up more questions than answers.  How does this solve the problem of ’27 isolated systems’ and national bans that are inconsistent with Article 49 of the EU Treaty? Still, it’s early in consultation process and these and other questions will no doubt be addressed in time.

Where to now?

The European Parliament and EESC have until October to formally respond to the EC’s Green Paper.  The EC will then have the option of proposing draft legislation to regulate the online gambling industry based on these, and already received public responses.  A draft is not expected to be tabled before 2012.