The European I-Gaming Roller Coaster

It’s rare that a day goes by without some major development in the online gambling regulatory landscape in Europe.

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.