Another day, another online gambling ruling in the European Union.

This one, handed down by the European Court of Justice (“ECJ”) yesterday, was in relation to bet-at-home.com’s right to offer its online gambling services to Austrians.

Backed by the Maltese government, bet-at-home.com contended that their Maltese license was sufficient to allow them to operate in the Austrian market and compete with the local monopoly operation.  Austrian authorities disagreed.  So did the ECJ.

In it’s ruling the court said:

“When assessing the proportionality of a monopoly, the national courts are not required to take into account the monitoring and control systems regulating companies established in another member state….A member state may legitimately wish to monitor an economic activity which is carried on in its territory, and that would be impossible if it had to rely on checks made by the authorities of another member state using regulatory systems outside its control.”

It’s another strike for advocates of an open online gambling market across the EU, consistent with the single market services doctrine (ie the private EU-licensed operators), and a win for monopoly gambling operations fighting to protect their local markets.  European Lotteries group president Friedrich Stickler hailed the decision as the “final blow” for “those that keep on calling for ‘mutual recognition’ of gambling licences between member states.”

Final blow might be a bit dramatic, particularly with EU-wide reforms being considered presently, and a number of EU members adopting a regulatory rather than prohibitive approach. It does however serve as another reminder that this is a very fragmented I-gaming market.

Related pages:

EU ponders region wide online gambling legislation

EU Commission launches public consultation process into online gambling

Germany doing it the hard way

ECJ: Restrictive Austrian casino rules a breach of EU law

The European I-Gaming Roller Coaster

Online gambling in Europe: the roller coaster ride continues

On Thursday last week the European Commission (“EC”) kicked off their public consultation process into EU online gambling with the release of a Green Paper setting out the parameters of the process.

It’s a 36 pager titled “On-line gambling in the Internal Market“  that you can read in full here.

The paper invites responses to a series of questions (51 in all) related to various aspects of the online gambling in the EU.  Responses are to be sent by email to markt-gambling@ec.europa.eu by 31 July 2011 so if you want to put your 2-cents worth in you better get cracking!

At the end of the process the EC are hoping to have (or at least be closer to having), “a full picture of the existing situation, to facilitate the exchange of best practices between Member States and to determine if the differing national regulatory models for gambling can continue to coexist and whether specific action may be needed in the EU for that purpose.”

I’d imagine after receiving so many different responses to their questions they are going to have a confusing and conflicting picture of the current state of play.  But hopefully that’s the cynical rather than realistic view.

In any event once all responses have been digested the EC will report on what they believe to be the most appropriate follow-up actions.

The Green Paper did highlight some interesting facts on the current state of online gambling across Europe as the EC currently sees it.

• of 14,823 active gambling sites in Europe more than 85% operated without any license;
• online gambling comprises only 7.5% of overall gambling market, but is the fastest growing sector expected to double in size by 2013;
• The UK is by far the largest online gambling market including forms of internet gambling (and considering legal, “grey” and “black” market activities;
• the mobile betting channel is where the fastest growth is expected.

If you’re unhappy that you can’t access your favorite online casino brand, or unhappy that your fellow countryman can access any online casino, here’s your chance to have your opinions heard by the big-wigs in Brussels.

The latest development in the ever-changing European online gambling regulatory landscape played out last week in Sweden when the European Court of Justice (“ECJ”) lent support to Sweden’s online gambling ban.

Sweden are one of the EU countries that take a protectionist approach to net-gambling, seeking to prohibit foreign (including EU licensed) operators while allowing local State-run operator Svenska Spel to promote betting services to Swedish players.  It’s an approach that operators and their representative associations (EGBA, RGA, etc) are not surprisingly unhappy about and which the European Commission is (or was) trying to stamp out.

Recent decisions by the ECJ beginning with the Portuguese Santa Casa case and now this one are making the European Commission’s job decidedly more difficult.

At issue in Sweden was the right of local newspapers Expressen and Aftonbladet to run advertisements for an online bookmaker.  Svenska Spel maintained the advertisements breached their exclusive right to advertise gambling services in Sweden.  The papers contended this approach (ie protectionist online gambling ban) was not consistent with EU community (freedom of services) laws and they therefore had the right to run the ads.

After years of legal to-ing and fro-ing the issue made its way to the ECJ who said that Swedish authorities could ban online gambling operators that are based (& licensed)  in other EU countries on cultural, moral or religious grounds.  The court said,

“Swedish legislation which prohibits the promotion of gambling organised on the Internet by private operators in other member states for profit is consistent with Community law.”

It’s another blow to the industry and comes on the back of a similar ruling in the Netherlands last month.

They certainly like to keep the industry on its toes over in Europe!

You can read about Sweden and live casinos here.

A local casino group is launching legal action against a bunch of online casinos, Unibet and 888.com among them, alleging their current participation in the French market is not strictly legal.  They are asking a French court to issue a ruling preventing said online operators from being eligible for internet gambling licenses when they come up for grabs later this year.

The local casino group bringing the action consists of Barrière,  Tranchant and the Casinos de France Trade Union and they are running the high-moral-grounded arguments of national interest and player protection as central to their case.  They assert that the online operators are,

“depriving the State of substantial tax revenues, and not upholding the principles of player protection and fighting against problem gambling, fraud and money laundering”.

These are the usual arguments that local gambling operators run against competing online offerings, along with claims that the future of their industry is at threat from ‘illegal’ online operators; that they can not compete with the broad range of gambling offerings and in the case of wagering and sports betting, the competitive odds that are attracting punters business.

It always amuses me when local monopoly or duopoly gambling businesses take this high moral ground. Why can’t they just be honest and tell it how it is.  They’re pissed that their once captive market now has options and those options invariably are more compelling.  Are they truly concerned about problem gambling and the national interest?

I find it very hard to believe that Barrière,  Tranchant or the Casinos de France Trade Union have any sincere concern for the welfare of gamblers.  I’m sure that, just like Australia’s Tattersalls and Tabcorp (that country’s duopoly slot machine operators) these French companies’ revenues rely heavily on the losses of addicted gamblers. It’s common knowledge that in Australia, the busiest slot machine venues are located in lower socio-economic areas – and the busiest day of the week in these venues are pension and welfare payment days.

I strongly suspect that  Barrière and Tranchant’s concern about problem gambling is that they are losing a share of problem gambling business, not that it exists at all.

And their concern for the national interest?  Give me  break.  The only interest they are concerned with is that accrued on their bank balances.

Am I being over cynical here? Maybe.  But just once I’d like to hear a little more honesty and a little less grand standing from aggrieved local operators.

The EU consists of almost 30 Member States, all wanting to apply laws consistent with their own cultural and political agendas and understandably protect local operators in the national interest.   Then you have the the European Commission (EC), set the impossible task of trying to enforce adherence by all members to overarching EU law, and uphold the single market approach to trade and discourage protectionist practices.

So I guess a clear and undisputed path to a unified approach to online gambling regulation is a bit much to ask for.  And the reality is something altogether different from this.

There is a real divide between the ideals of the EC and preferred approaches many of its members want to take with respect to online gambling regulation.  The EC, and no doubt most operators and their member associations like the European Betting and Gambling Association (EGBA) and the Remote Gambling Association (RGA) want national restrictive or protectionist laws removed in the online gambling space.   They trumpet Article 49 of the EU Treaty and the ECJ’s Gambelli ruling that freedom of service provisions apply to online gambling services as they do to all others.

On the other side of the divide sit a long list of influential EU members stubbornly wanting to frame laws protecting local monopoly gambling operators and restricting foreign operators from accessing their markets.

The EC issues reasoned opinions and threatens ECJ action against infringing states, but this doesn’t seem to have them jumping to change their laws.  And to complicate matters further, every now and then a major ECJ decision on the interpretation of EU law in this area seems to shake things up even further.

First there was Gambelli, the landmark case that held that freedom of service provision laws applied to online gambling as they did all others…operators rejoiced and it looked like the path to open internet gambling markets had been paved.  Then, just last September the ECJ ruled (Santa Casa case) that laws protecting state monopoly gambling operators were legal, provided where those laws were in the public interest…operators thought the sky had fallen in and the door had opened to ECJ sanctioned protectionist laws across Europe.

Just yesterday, the EU Advocate General, ruling on a German online gambling dispute opined that national laws inconsistent with the EU freedom to provide services as interpreted in the Gambelli case are illegal, and further there is no exception to the direct application of the Treaty to the gaming and betting sector.  He went on to say that it was not in the interest of consumers to maintain non EU compliant legislation that does not offer consistent and systematic protection.  Here he was referring to the German authority’s justification for restrictive laws as being problem gambling prevention – while sanctioning a monopoly gambling operation.

His comments suggest that monopoly protection is not of itself a ‘public interest’ referred to in the Santa Casa case.

Again operators and the EGBA have rejoiced and hailed the decision as one paving the way for open future markets.  That is until the next case I guess.