The European Online Gambling Market

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The outlook for the European online gambling market has changed over the last few months. Though Articles 43 and 49 of the European Union Treaty are supposed to ensure a uniform online gambling market across Europe, online gambling operators have realized that this will not be achieved in the foreseeable future. According to experts in the industry online gambling operators are now willing to settle for the regulatory regimes offered by individual countries even though these are loaded against private enterprise. After all half a loaf is better than no bread.

The death knell to the unified European market was pronounced by none other than the European Court of Justice (ECJ) in three high profile cases. In the Netherlands ECJ ruled in favor of De Lotto’s monopoly against Ladbrokes and Betfair. In Portugal ECJ ruled in favor of the state monopoly against Bwin and gave a similar verdict in Sweden. The crux of the rulings was that the EU provisions are subservient to public interest. Therefore if state owned monopolies are required to protect public interest then so be it. This has become s screen that is being used by all European nations to protect their own state owned monopolies even while the put in place a regulatory mechanism that is far from being fair and competitive.

Prominent gaming lawyer Quirino Mancini of SCM Partners has pointed out that all the big online gaming operators have accepted “licensing country by country because they cannot afford to lose market share and local authorities are not allowing them to cross borders. That is the only realistic approach they can take in the circumstances.” Tom Lippiett, associate at law firm Berwin Leighton Paisner, has put it very succinctly by stating that the legality of the issues has been consumed by political pressure.

Chief executive of Remote Gambling Association (RGA), Clive Hawkswood, points the way forward. He said that the online gambling industry should first focus on some form of harmonization between the different regulators and then get the regulators to accord partial recognition at least to other regulators. Malcolm Graham, chief executive of PKR, pointed out that the most important thing for the industry was to ensure that they do not have to replicate the large infrastructural investments in each jurisdiction but can work from a single hub.

Apparently the new European Commissioner for the Internal Market and Services, Michel Barnier is seized of the issue and has indicated that he would initiate pro harmonization moves. A green paper on the matter is expected and the industry is hoping that it would be adopted and followed by legislation and an EU directive.

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