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Brussel Sprouts Nonsense

In October, the European Commission set out its action plan for online gambling in a Communication entitled ‘Towards a comprehensive European framework for online gambling’. It was the result of what Jocelyn Wood of www.pokerfuse.com described as ‘an interminable period of debate and consultation over the last three years’.

Throughout that period of debate, what was clearly apparent was the inconsistency within law. On the one hand, the Belgian authorities feel it is within their remit to detain Norbert Teufelberger, Co-Chief Executive of Bwin.party for two hours of questioning over whether his company had contravened local Belgian laws, while, on the other, they have failed to respond to a direct complaint from the EU, which was lodged in 2010, over the fact that they are blatantly not complying with the Treaty of the Functioning of the EU (TFEU). This is something that Michel Barnier, the European Commissioner responsible for the internal market and services, described as ‘the prerequisite of a successful EU policy on online gambling’. Indeed, as EU law currently stands, French, Italian and Spanish players should be allowed to play on PokerStars.com because it is regulated by Denmark (amongst other countries), Belgian players should be allowed to play on PartyPoker.com and operators outside Belgium should be able to apply for a Belgian license. The status quo of legal uncertainty is no longer sustainable.. As Sigrid Ligne, Secretary-General of EGBA, said in the weeks running up to the announcement ‘we deplore the situation where we see 27 ‘mini-markets’ for gambling in Europe. We are calling for the introduction of European rules to ensure proper protection for consumers and maintain a crime-free environment throughout the EU, while affording open, fair and transparent licensing conditions for EU regulated operators.’

The Commission’s deliberations could not, therefore, have come at a more opportune moment. There are currently dozens of on-going legal disputes amongst operators and Member States as countries increasingly flout EU Trade Law to protect the incumbent land-based industry under the guise of player protection and safety. Currently, those Member States considered to be at an advanced stage of infringement to existing laws are Finland, Greece, Hungary, The Netherlands and Sweden, while Germany has been sent a ‘letter of notice’ about its federal gambling treaty. The Creutzman Report, approved by the European Parliament in 2011, had argued strongly for an EU-wide approach to online gambling and had urged the European Commission to adopt a more active approach in investigating inconsistencies between TFEU and Member States national gambling legislation and pursuing infringement cases to eliminate such inconsistencies where necessary. After all, some cases, outstanding as far back as 2008 have still to be resolved and, to date, no Member State has been referred to the European Court of Justice. Michel Barnier publicly endorsed these findings and the direction for EU policy that it implied. Indeed, he was quoted in a letter to the Financial Times, from 14 CEO’s of online gambling companies on November 19th as saying ‘if blatant infringements persist I will not hesitate to propose to my colleagues that the appropriate proceedings be taken or launched’.

In short, the European online industry need a revolution to break the stalemate and a revolution was what we were promised. However, most emphatically, a revolution was not what we got.
Rather, in the spirit of Ledru-Rollins, one of the leaders of the 1870 revolution in Paris, who was heard to say: ‘let me pass. I must follow them. I am their leader’, we got vague commitments to possibly do something at some future date. Indeed, the title should have alerted us that the issue was effectively being kicked into the long grass. ‘Towards a comprehensive European framework for online gambling’, does not claim to have a solution or even to have an idea when a solution, if there were one, would actually happen. Like everything to do with the EU, it is just part of a journey.
A little nudge, along with a few re-iterations of unquestionable principles, such as protection of consumers and citizens, prevention of fraud and money laundering and prevention of match fixing, thrown in to give it some purpose. It is an action plan containing absolutely no plans for action. And all that remains to be done is for the EEC to issue a directive, standardising how long the grass, into which the issue is being kicked, has to be to qualify to be called ‘long’.

As Jocelyn Wood points out, the preamble to the document indicated early on its lack of ambition or bite. ‘It does not appear appropriate at this stage to propose sector specific EU legislation’ despite that being, we’d been led to believe, the raison d’etre of the document itself. Moreover, there are plenty of other services provided across borders, so while the EU may say it is inappropriate to introduce specific measures for specific industries, it never seems to have thought it inappropriate to exclude online gambling from the consequences of TFEU in the first place. Moreover, it is because of their reluctance to introduce legislation to harmonise the provision of online gaming in the first place that the confusion exists and that any EU law intervention has had to rely on the so-called ‘fundamental freedoms’ of the EU Treaty; in other words, that national gambling legislation infringes either article 49 and/or 56 of the Treaty by imposing unjustified restrictions on the freedom of establishment of nationals of one Member State in the Territory of another or imposing unjustified restrictions on the freedom to provide services throughout the EU.

This is an important ‘freedom’ and one which the document steers well clear of, announcing in its introduction that ‘it is not possible for Member States to effectively address these challenges [of developing online gambling] alone to provide individually a properly regulated and sufficiently safe offer of online gambling services’. In so far as the so-called Action plan proposes anything, it proposes fudge and compromise. Even its language is irredeemably feeble. The Commission is ‘encouraging’ the development of better age-verification tools, it will ‘promote’ faster information exchange, whistle blowing mechanisms, and overall cooperation at national and international level; and its Member States are ‘urged’ to carry out surveys and data collection on gambling disorders. It never actually orders, instructs or requires anybody to do anything other than to set up another group of experts to ‘ensure respect for the rules’, something the authors of this document quite palpably failed to do themselves.

Why does this matter? Why, when Europe is in the throes of an economic meltdown and national voices are once again daring to be heard, should we even be contemplating greater union when the whole thing is in danger of falling apart: firstly, because, for the EU to prosper, it must do so on the back of its trading capability and its role in unlocking economic opportunities for all Member States to prosper in. If it fails to do that, its raison d’etre begins to fade away; secondly, we are in a digital age where the ability to cross borders, legally or illegally, has never been so easy. Not to even acknowledge the power of the internet when dealing with an online industry beggars belief; and, thirdly, online gambling (whether anyone likes it or not) is one of the fastest growing service activities in the EU, with annual growth rates of almost 15% and an estimated €13 billion in annual revenues in 2015. It continues to develop alongside the fast-paced progress of online technology and covers a range of games of chance, including sports betting, poker, casino, bingo and lotteries, with nearly 7 million customers participating in one or more types of gambling. It is no longer a minnow that can be ignored and therefore should be harmonised to secure the adequate protection that is needed with a level playing field for regulatory approved operators from throughout Europe. It is now too big an industry and it is posing too fundamental a question about how the EU operates to wish that it will just go away. They say that the other man’s grass is always greener. For the EU, however, I suspect they just want it to be longer.

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