• Commission Publishes Green Paper on Online Gambling In the Internal Market
  • May 30, 2011 | Author: Axel Clerens
  • Law Firm: Crowell & Moring - Brussels Office
  • In our newsletter of [newsletter 11], we announced that Internal Market Commissioner Michel Barnier planned a European-wide dialogue in view of reaching a political agreement with regard to the regulatory framework on betting and gaming. On March 24, the European Commission published its 'green paper on online gambling in the Internal Market', a first step in this direction.

    Purpose and contents of the green paper

    The announced green paper on online gambling in the Internal Market is now a fact. Its purpose is to 'launch an extensive public consultation on all relevant public policy challenges and possible Internal Market issues resulting from the rapid development of both licit and unauthorized online gambling offers directed at citizens located in the EU'. In other words, at this stage, the Commission merely seeks to gather information from the various Member States on how they view the societal and public risks associated with both legal and 'unauthorized' online gambling, as well as on which regulatory and technical means these Member States use, or could use, in order to protect consumers, preserve public order and prevent fraudulent activities.

    The paper goes on to describe and/or ask questions with regard to the following topics :

    • the current market situation, recent developments and challenges with regard to online gambling in the EU (annual revenues, categories of transmission channels/devices, dominant markets, stakeholders, etc.);
    • the applicable Treaty rules and the evolution of the Court of Justice's case law;
    • the secondary EU legislation relevant to online gambling;
    • the key conceptual/organizational, societal, public order and economic/good causes policy issues associated with an efficient and fair regulation of online gambling, namely :
      • definition of gambling
      • licensing requirements (white listing or double licensing regime)
      • related services (commercial communications, sales promotions, direct marketing, sponsorship)
      • public interest objectives (consumer protection, prevention of fraud and money laundering, financing of benevolent and public interest activities, etc.)
      • enforcement and related matters.

    Timeline and next steps

    Member States, the European Parliament, the European Economic and Social Committee and all other interested parties are invited to submit their views on the suggestions set out in the green paper. Such contributions should be sent to the Commission by July 31 2011 at the latest (by mail or email at [email protected]) and will then be published on the internet. The Commission will also organize consultations of national authorities and targeted stakeholder meetings and expert workshops.

    On the basis of the conclusions drawn from the results of this consultation, the Commission will consider the next steps to be taken in follow-up to this green paper.

    Analysis and conclusion

    Although many - if not all - private stakeholders hoped that the Commission would soon be taking a European-wide regulatory initiative, this green paper unfortunately does not seem to be it. Indeed, the Commission states that the present consultation 'should help identify if the current rules applicable to online gambling services at EU level are fit to ensure the overall coexistence of the national systems and determine if greater cooperation at EU level might help Member States to achieve more effectively the objectives of their gambling policy'.

    This national-oriented instead of pan-European approach is unfortunate, as the Commission itself states in its green paper that the differing models of national regulatory framework could only coexist well in the past 'given the relatively limited possibilities of selling gambling services across borders in the past'. This is no longer true, as the online gambling market is the fastest growing segment of the overall gambling market, with annual revenues in excess of EUR 6,16 bn in 2008, now estimated at EUR 9,08 bn in 2011. In this model, the further coexistence of, on the one hand, restrictive, strictly controlled monopoly or even prohibitive models and, on the other hand, 'private licensed operator' models seems impossible. This is amply demonstrated by the fact - also mentioned in the green paper - that in 2006, out of 14, 823 active gambling sites in Europe, more than 85% operated without any license. This incompatibility between contradicting regimes in cyberspace, the increasingly important "grey market" and the number of preliminary rulings referred to the Court of Justice of the European Union concerning the compliance of national gambling regulations with Treaty provisions clearly show the urgent need for Union regulation.