An upcoming EU-wide public consultation on the future of Europe's rapidly-growing online gambling market must create a "competitive landscape" for betting firms, Khalid Ali of the European Sports Security Association (ESSA), told EurActiv in an interview.
EU Internal Market Commissioner Michel Barnier is poised to launch a public consultation on online gambling services in the internal market later this month.
The consultation will seek to address "all relevant public policy challenges and possible internal market issues resulting from the rapid development of both licit and unlawful online gambling offers directed at citizens located in the EU," according to a draft copy of the Green Paper, seen by EurActiv.
The Green Paper is due to be finalised at a meeting of the College of Commissioners next Wednesday ahead of its launch "between 23-30 March," Commissioner Barnier's spokesperson, Chantal Hughes, told EurActiv yesterday (15 March).
Different national regulatory models for gambling co-exist across the EU as the European market is currently regulated by EU governments at national level. National markets tend to be dominated by strictly-controlled monopolies or licensed operators operating within strictly-regulated frameworks.
However, "the development of the Internet and the increased supply of online gambling services have […] made it more difficult for these different national regulatory models to co-exist," reads the draft Green Paper, which invites stakeholders to consider whether "greater cooperation at EU level might help member states to achieve more effectively the objectives of their gambling policy".
"Top of my list is really ensuring a competitive landscape, because this is what will give European bookmakers the edge over their international rivals," said Ali, who is secretary-general of ESSA.
According to him, online gambling will also help to support Europe in today's climate of innovation and competition, as EU companies "are leading the way" in coming up with new standards and new technologies, including security measures and online streaming facilities.
"We need to support and protect that, especially if we want this to fit into the EU's [growth and competitiveness] objectives for 2020. That's vitally important and it's exactly what this Green Paper should be doing – helping to give our operators a supportive climate," Ali explained.
Should the Green Paper produce calls for any EU-wide regulation, Ali believes that given the experience of other sectors, it will take several years for this to emerge.
"If you do have an open market [with] some sort of harmonisation, then the benefits for sport will be great, because there will be a lot of commercial agreements in place between operators and sports federations," Ali said, explaining that the Internet and online gambling have opened up a whole new audience eager to watch live streaming of games.
ESSA monitors irregular betting patterns in Europe, investigates whether they are suspicious or not, and alerts the relevant sports federations if necessary.
Ali explained that betting companies are the first to lose out in cases of match-fixing, but if the phenomenon persists in Europe, it will also have a negative impact on sports federations and potentially, funding for grassroots sport.
"In the long term, if match-fixing is persistent in sport, what you'll find is that there's a financial consequence for sports federations and a reputational consequence for betting operators, because people will not want to bet on fixed outcomes," he added.
Ali also drew attention to the industry's efforts to put in place regulations and procedures to tackle the problems faced by online gambling firms, including money laundering, data protection and underage gambling. "Private industry is really working hard to put in place standards that benefit consumers," he said.
Asked whether efforts by the online gambling industry to regulate itself meant that companies were keen to avoid legislation from Brussels, Ali replied: "No, absolutely not. The reason we've had to do this is that there hasn't been any consistent regulation across Europe."
"Many industries don't want regulation. But the online gambling industry actually does want regulation: it just has to be the right type," Ali explained, adding: "What we really want is an internal market that works. The Internet is borderless, and likewise, we need to have a landscape within Europe where there these companies can flourish."
Ali agreed that debate on EU sports policy was overly dominated by large organisations like the IOC, FIFA and UEFA, which can afford to maintain a permanent presence in Brussels, but stressed that the European Commission, and especially its sports unit, has fostered – or is trying to foster – a dialogue with all stakeholders.
"From sports betting point of view, that's very important," he concluded.
The EU online gaming and betting market represented 45% of world market share in 2010, according to figures from the European Gaming and Betting Association (EGBA).
EGBA data also reveal that the EU online gaming and betting market represents 11% of the total European gaming market and was worth €10 billion GGR (Growth Gaming Revenue: stakes minus winnings) in 2010.
The sector is expected to account for 13% of the total market by 2012 (€2.5 billion GGR), putting it among the fastest-growing industries in Europe. But this growth is not detrimental to the traditional offline segment, which the EGBA expects to retain the lion's share of the total European market with 87% in 2012 and continue to grow in revenue terms, from €79.6 billion GGR in 2008 to €83.7 billion GGR in 2012.
The European Commission will launch a public consultation on the EU online gambling market later this month.
- By end March: EU Internal Market Commissioner Michel Barnier to launch public consultation on online gambling services in internal market.