Tuesday

31st Mar 2020

Spanish charity fears liberalisation of online gambling

  • Around half of EU member states allow charity gambling with Spain’s National Association for the Blind (ONCE) having a monopoly in the area. (Photo: Sini Merikallio)

The European Commission opened a legal, political and cultural can of worms when earlier this year it said it would take a closer look at the murky waters of online gambling in the EU.

The announcement sparked a flurry of interest around the EU, not least from a Spanish charity for blind people which fears its charity gambling model will be undermined by any drive to deregulate the sector.

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Around half of all EU member states allow charity gambling but Spain’s National Association for the Blind (ONCE) has a monopoly in the area.

Set up in 1938, and working with a licence from the government, ONCE derives around 80 percent of its revenues – last year €1.86bn - from selling lottery coupons.

But it fears that a blithe deregulation of the online gambling sector could potentially decimate its profits.

Angel Sierra, managing director at ONCE, says that allowing gambling operators to set up shop in Spain would "cannabalise" the potential profits it makes from its lottery.

He admits that less than one percent of last year's revenue came from online gambling but points out that the sector is about to explode in growth. The commission itself backs up these growth projections, suggesting that online gambling services accounted for 7.5 percent of the overall gambling market in 2008, a figure that is expected to have doubled by 2013.

"There is a danger of liberalising the market. In Malta, for example, there are more than 500 gambling licences. If all of them operated in Spain, then they would cannabilise the income of ONCE," says Sierra.

He adds: "If they sell, let’s say €1 billion, then of course that billion euros will eat into ONCE sales."

ONCE, which expanded its umbrella to cover all persons with disabilities in Spain in 1983, prides itself on being unique in Europe for ploughing back all of its profits into helping people with disabilities.

It has been lobbying in Brussels to keep its status on social-service grounds.

"I think they understand the uniqueness of ONCE, a lottery totally devoted to the social service of integrating people with disabilities into Spanish society," says Sierra.

The commission published its green paper in March and allowed interested parties to comment on it until the end of July. It is expected to publish plans for the sector in 2012.

In a sign of the interest the area, a short report by German liberal MEP Juergen Creutzmann voted on in parliament on 15 November, attracted hundreds of comments by MEPs. While it says there is a need for more co-ordinated regulation in the EU, the report also suggests that the “traditions and cultures" of member states need to be taken into account.

The commission, for its part, has said that its examination of the area is not simply about liberalising the market.

Rather, says internal market commissioner Michel Barnier: “It is about ensuring that the market for on-line gambling services within the EU is well-regulated for all."

A study by the Swiss Institute of Comparative Law looking into the situation across member states shows the commission could clamp down on restrictive gambling laws even if member states say they are for social reasons.

All member states have restrictions in place for public-interest reasons, but these vary considerably, says the Swiss study, and often result in restrictions in the fundamental internal market freedoms of providing services and the right to establishment, breaching EU law.

But the EU's highest court has in the past upheld national rights to impose restrictions to online gambling under certain narrow conditions.

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