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Online Gambling in EU - Legal Issues

Posted by: SharpGambler on Tue, 06 November 2007 14:32:38 (325 Reads)
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One year after UIGEA was approved in the US, online gambling companies are shifting their operations and efforts toward Europe. In fact it is a reasonable approach since EU is going a very different route than US, and there are many market opportunities being opened.

EU Commission has been giving several EU countries clear signs that State gambling monopolies will not be tolerated, and moral and social reasons given by some countries to protect their gambling monopolies will not be accepted.

The Treaty of European Union states in Article 43 the freedom of establishment, and the freedom to provide cross border services in Article 49. Several EU countries have gambling monopolies and put restrictions in gambling. Given the freedom of establishment, several companies and individuals have been trying to fight these restrictions and to force member states toward a free gambling market.

In fact there is no sense in protecting a gambling monopoly with national laws since this is against the main principles in which the EU construction is based. No one should have such an advantage given by a national law. Member states have tried to justify these restrictions saying gambling is an issue of national interest and that hey need to monopolize gambling in order to protect their citizens, o control potential problems, and for security reasons.

These moral and social arguments could be accepted as reasonable justification at first sight. But, if we look inside, we see this justification is completely flawed and is only a trick to protect profits.
Countries like France make billions of Euro each year with their national lotteries. In fact, France (and other EU member States) has a very aggressive marketing plan, with lottery advertisements elsewhere. The lottery business has been growing at a flying pace to such a point is which it has crossed its country borders. Justifying gambling restrictions on national security and moral concerns is not reasonable in this case. Gambling monopolies as of today are managed as any other business conducted by a private company. Why do they have national law protection?

Many people has been asking this same question, and is fighting against these monopolies. The EU has tried to delay any decision regarding gambling monopolies until they could, but now it is reaching an end, because there are numerous complaints filed with EU Commission against Member States. Growing profits and active marketing plans are not compatible with security, moral, and social arguments given by member states.

Commissioner Charlie McCreevy has always been pushing for action against member states for not complying with Articles 43 and 49, and in March 2006 the EU Commission officially questioned seven member states (Finland, Germany, Italy, Hungary, Denmark, The Netherlands, and Sweden) on their national restrictions imposed on gambling. In October 2006, Austria, France, and Italy received letters of formal notice from EU Commission. The EU Commission went deeper on the issue, and on March 2007 requested Finland, Denmark, and Hungary to modify their legislation regarding gambling restrictions or be referred to the European Court of Justice. In June 2007, France and Sweden were formally requested to amend their laws, following their replies to the letters of formal notice sent by EU Commission. At this time Greece was also notified.

The letters of formal notification and the requests made by EU Commission show that the Commission is pushing for a regulated gambling market, with free access to all, and no national protection to State owned monopolies. Given EU rules and the high number of member states EU has, it will be impossible to keep any gambling monopoly within EU borders. Any company operating in Malta will fight hard for its right to offer services in Spain and France based on Article 49. The first countries to legalize and open the gambling market will have a clear advantage here attracting some extra capital inside their borders. Delaying a law amendment will only result in extra costs, and will most certainly result on an advantage thrown by the window. Let's wait and see the developments, with one important thing in mind: EU is not going the same route as US, and is giving important steps toward a free, organized, and legalized gambling market.

For more information:European Gaming and Amusing Federation

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