Thursday

25th Aug 2016

Gambling in the EU: A long way from harmonised rules

  • Harmonised EU rules for the gambling industry are still a distant prospect (Photo: Flickr.com)

Decisions on who can open and shut down a casino, a lottery or an online gambling site remain at national level, but there is a trend to more unified rules across EU's 28 member states.

The gambling sector is a very profitable business, with revenues of over €80 billion a year.

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Online gambling is the fastest rising sector with revenues expected to reach €13 billion next year, compared to €9.3 billion in 2011. Despite its cross-border nature, the licensing system and specific rules governing online gambling remain national.

Neither is the EU involved in specifically regulating the activity of casinos or lotteries. The only cases it can pursue and take governments to court for are breaches of the single market legislation by state-owned lotteries or other gambling outfits that abuse their dominant position.

Some members of the European Parliament and the umbrella association for the gambling industry – the European Gaming and Betting Association – have made the case for harmonised legislation across the EU, in order to increase transparency and revenues that are currently hindered by the fragmentation into 28 smaller national markets each with its peculiarities.

Jurgen Creutzmann, a German Liberal MEP who drafted one of the Parliament's reports on online gambling, told this website that the move towards a more harmonised system is still far away.

"The subsidiarity principle applies. So states can still have monopolies or move towards a license system – a trend that can be seen in most EU countries in the past few years. But then they have to abide by the rulings of the European Court of Justice in terms of transparency when giving licenses and a level playing field," Creutzmann said.

But he also noted that several member states who scrapped their state monopolies have not done much to allow for competition on the gambling market. Germany for instance moved to a licensing system, but said it will only hand out about 20 licenses, despite there being nearly 100 interested operators and the German market the largest in Europe.

"I am sure the German law will be proven in breach of EU law," Creutzmann said in reference to an inquiry launched by the EU commission which may end with Berlin being taken to the ECJ.

"Match fixing, money laundering, fair competition – you can't solve all these things unless you have European solutions. When all member states will have licenses – and almost all have moved to that – then Europe can play a better role," Creutzmann said.

With the Barroso commission coming to the end of its term this year, it is unlikely that the European executive will move on proposing binding legislation on harmonising gambling rules.

The commissioner in charge of internal market, Michel Barnier, has come up with "soft legislation" – non-binding proposals and studies aimed at encouraging national governments to streamline their legislation according to the ECJ rulings.

On one aspect of gambling – possible money laundering – the EU is moving to a single set of rules as part of an overhaul of the anti-money laundering directive, which the EU commission and the European Parliament want to expand to online and offline gambling services.

Countries with a high stake in gambling, such as Malta, already have signalled opposition to the revised rules.

Five out of Malta's total of six MEPs voted against the proposed rules after having consulted with the government on the matter.

Maltese Labour MEP Marlene Mizzi said she voted against these "draconian rules" for fear of its "repercussions on Malta’s financial services".

Even if the majority of MEPs voted in favour of these rules, a deal with member states is still pending and only likely to be achieved towards the end of the year, once the new EU Parliament and commission are in place.

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