New initiatives from the EU Commission towards a European framework for online gaming

Yesterday, Tuesday, October 23 2012, the EU Commission published a communication to the European Parliament, the Council, the Economic and Social Committee and the Committee on the Regions called:

Towards a comprehensive European framework for online gambling

Currently, the text of the communication is only provisional, but the final text will be available soon.

According to the communication, the purpose of the communication and the accompanying Commission Staff Working Document is to identify the key challenges posed by the co-existence of national regulatory gaming frameworks within the EU internal market. Furthermore, the communication’s purpose is to propose answers to these challenges in the form of actions to be taken both at national level and at EU level.

In light of the identified challenges, the communication highlights five priority areas for the member states and the EU to address:

  1. national regulatory frameworks’ compliance with EU law,
  2. enhancement of administrative cooperation and efficient enforcement,
  3. protection of consumers and citizens, minors and vulnerable groups,
  4. prevention of fraud and money laundering, and
  5. safeguarding of the integrity of sports and prevention of match-fixing.

The background for the communication is the growth of online gaming within the EU. According to the communication online gaming has an annual growth rate of almost 15 % within the EU. For 2015 the annual revenues from online gaming are expected to be in the region of $13 billion, compared to $ 9.3 billion in 2011.

Regulation of gaming

One of the issues which the communication addresses is of course the many different gaming legislations within the EU. In regards to the member states’ gaming legislations’ compliance with EU law, the Commission intends to accelerate completion of its assessments in all pending cases on member states’ gaming legislations compliance with EU law and take enforcement action wherever necessary.

The Commission will also take actions to help the member states better understand each other’s gaming regulations, share good practice and improve convergence in tackling common problems. On this basis the Commission will during 2012 establish an expert group on gaming of representatives from the member states, to among others exchange experiences and good practices. Also, the Commission will explore the possibilities for an exchange of personal data between the gaming authorities of the member states.

Furthermore, the Commission sees a need for assessing the benefits and possible limits of enforcement measures, such as ISP-blocking and payment blocking. Pursuant to the communication, there is a need for effective enforcement measures in respect of illegal gaming. However, payment blocking and ISP-blocking will have to be assessed in the light of the fundamental rights and freedoms of EU law.

In regards to consumer protection, the Commission states that a member state shall take different measures to ensure that the consumers play with gaming operators, who are authorized in that member stats, and are not lead to seek more attractive offers with unauthorized gaming operators.

Pursuant to the communication, the Commission will in 2013 adopt a set of recommendations for the member states on common protection of consumers and on responsible gaming advertising. These will include recommendations for the member states in regard to how to regulate inter alia advertising of gaming, player registration and verification, transaction, protection of player funds, consumers support and efficient handling of complaints, prevention of fraud and money laundering, etc.

Prevention of match fixing

Pursuant to the communication, the Commission sees a need for more cooperation between betting operators, sport bodies and authorities. On this basis, the Commission intends to launch a number of initiatives, including promotion of international cooperation and dialogue in the prevention of match-fixing.

The Commission intends to develop a set of recommendations for anti-match fixing measures applicable across the member states and sport disciplines. It is the intention that this recommendation shall be made in cooperation with different stakeholders. The Commission expects the recommendation to be adopted in 2014. The purpose of this recommendation will be:

  1. to promote a more efficient exchange of good practices in the prevention of betting related match-fixing, including initiatives on awareness raising and training for actors in the field of sports,
  2. to ensure mutual reporting and follow-up actions of suspicious activities by sport bodies, operators and regulators, including gathering reliable figures on the scale of the problem,
  3. to establish minimum conflict of interest provisions, for example betting bans for sport people and sport officials as well as the exclusion of youth events from betting, and
  4. to introduce hotlines and other reporting or whistle-blowing alert mechanisms.

Comments

Although the Communication does not present a plan for harmonization of the regulation of gaming on an EU level, the communication is a step toward a more homogeneous regulation of gaming within the EU. The Commission’s intention of drafting these new recommendations for the member states’ national regulation of gaming may be the first step toward a harmonized regulation of gaming. Regulation of gaming on an EU-level may be way out in the future, but I believe that slowly we will go toward more and more community regulation of the gaming market.

It will be interesting to read the Commission’s recommendations and see if this communication will increase the cooperation between the authorities in the member states and in the EU.

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