EU Passes Online Gambling Resolution

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A non-legislative resolution by Creutzmann was passed by Internal Market Committee MEPs of the European Union on Thursday October 6 with 30 votes in favor, 1 against and 3 abstentions. It sets out the EU's initial position on the consultative European Commission Green Paper of March 2011.

Briefly the resolution states that EU member states should be free to maintain their own rules on online gambling, but at the same time should step up EU-wide cooperation to counter the unregulated black market and protect children and vulnerable consumers. A statement from the committee pointed out that about 10% of all gambling in Europe is done online, via mobile phones or interactive TV platforms. The estimated market volume is in excess of €10 billion.

Though there has not yet been any response from the online gambling operators or their representatives, this resolution will not do anything to bring cheer to the industry. The biggest drawback of the resolution is that it rejects the concept of a common EU law leading to a harmonized online gambling market in Europe, which is something that the online gambling operators have been pressing for all along. Instead, the resolution proposes that EU member states are free to control their own online gambling activities, and this would imply the continuance of state monopolies and even total ban on Internet gambling.

The only recognition that has been given to the cross-border nature of online gambling is in an EU-wide coordinated approach in areas of the fight against illegal gambling and preventing addiction. The resolution calls for more cooperation among the national regulatory bodies, with the EC acting as coordinator. The role of the EC would be to develop common standards for taking joint action against unlicensed online gambling providers and blacklisting offenders. The resolution suggests the involvement of the Internal Market Information System, which is an electronic network linking public authorities within the EU.

The most alarming part of the resolution from the point of view of the industry is the call to consider a legally binding instrument obliging financial services providers to the online gambling operators to block transactions between their clients and blacklisted gambling providers. This is the clause in the UIGEA in the United States that has been troubling the online gambling industry there. The resolution also ignores the present statistical evidence and wrongly concludes that online gambling may involve a greater risk of addiction due to increased ease of access and the absence of social control.

The Committee's report on online gambling is scheduled for a plenary vote in Strasbourg in November 2011. The online gambling industry is sure to press hard for the removal of the objectionable clauses. The question is will they succeed.

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