Online gambling and consumer protection

07.04.14 @ 16:33

  1. By Maarten Haijer

BRUSSELS - In the coming weeks, the European Commission is expected to unveil its recommendations on consumer protection and advertising for online gambling.

  • The current lack of outright legislation has resulted in self-regulation initiatives. (Photo: Amy the Nurse)

  • (Photo: EGBA)

These recommendations are foreseen in the European Commission’s Action Plan for online gambling which was published in October 2012. Later this year, another recommendation on betting-related match-fixing is expected.

As it is generally the case in consumer goods and services sectors, the industry’s expectations regarding such recommendations are high. Member States share the common objective of protecting consumers. However, the many gambling reforms at national level have yielded different results.

Through its recommendations, the European Commission could unstitch this patchwork of different national approaches and construct a new uniform, European approach able to provide the appropriate levels of protection.

The current lack of outright legislation coupled with the fast evolving environment of online gambling has resulted in self-regulation initiatives.

The European Committee for Standardization (CEN), which is in charge of developing and defining voluntary standards at European level, set up a workshop agreement in 2011 on “Responsible Remote Gambling Measures”.

This agreement, to which EGBA contributed, is the first Pan-European agreement aimed at providing a high level of consumer protection for online gambling players.

Where do we go from here?

With almost 7 million European consumers gambling online and Europe’s online gambling market set to represent 15% of the total gambling market by 2015, EGBA hopes the Commission’s recommendations will take stock of these self-regulatory initiatives and pool together a common set of principles which provide for a high level of protection for all EU consumers.

As stated by Commissioner Barnier, encouraging the development of an attractive regulated offer is key to effectively channel consumers away from unregulated gambling websites.

This implies that, regardless of the nature of the regulatory regime, there should firstly be measures in place covering all aspects of player protection and, secondly a regulator ensuring the correct implementation of the rules (ie: protecting minors, preventing problem gambling, encouraging responsible advertising).

Multi–licensed operators are, in that context, very helpful as they can draw on their experiences in the different Member States.

Drawing from the industry’s experience

Know your customer (KYC) measures play a central role. KYC obligations allow operators to verify the identity and age of their players, crucial in helping to prevent underage gambling. Several measures can be considered, from introducing a visible label on gambling websites making it clear that no underage gambling is permitted, to detailed identity check requirements. However, the recommendations should also balance the need between the mandatory information that a consumer must provide to an operator (name, date of birth, payment details etc) and to avoid burdening the consumer so much that he will turn to unregulated websites.

Last but not least, the use of electronic verification systems (which the European Parliament supported in its 2013 report on online gambling) greatly facilitates the identification of a player and is both beneficial for the consumer and the operator.

Electronic verification systems are considered very effective in diverting the public away from unregulated online gambling offers.

The prevention of problem gambling should also be a central point of the recommendations. Evidence has shown that, regardless of the type of regulatory, rates of problem gambling are very similar across different markets. While the type of measures that may serve as best practices can vary between Member States, consumers should be able to make informed choices about how much and how often they want to gamble.

The recommendation should recognise that players should be given the possibility to limit their spending and the option to exclude themselves from gambling. In addition, the regulatory authority should keep track of all banned players.

The EGBA looks forward to the publication of the recommendations. The effect of this set of best practices on Members States should be closely monitored by the European Commission to bring to light implementation gaps and shortfalls, as these are detrimental for consumers and operators alike.

If the recommendations are not sufficiently followed upon, the European Commission should consider proposing legally binding measures.

Maarten Haijer is the Secretary General of the European Gaming and Betting Association, representing the leading online gambling operators licensed and regulated in the EU. The EGBA advocates consistent online gambling regulation based on fair competition in accordance with EU law.