EU sports ministers want games of chance out of services directive

Whether games of chance remains in the services directive or is taken out completely is likely to have major implications for sports funding in the EU. EURACTIV looks into the state of play in this debate.

Games of chance are exempt from the Commission’s proposed services directive for a ten-year transitional period.

Rapporteur Evelyn Gebhardt has put forward an amendment whereby “the directive shall not apply to gambling activities which involve wagering a stake with pecuniary value games of chance, including lotteries and betting transactions”.

Member states and the sports community say that games of chance are a substantial source of income used to maintain and support the basic sporting structures in EU countries.

The counter-argument is that member states are overly protecting state lotteries.

All games of chance in Germany and Luxembourg are state-run monopolies whereas in the UK games of chance refers to both state lotteries and private electronic online gambling activities.

A European Union sports ministers meeting in April 2005 came up with a declaration asking for games of chance to be excluded from the scope of the services directive. Their bottom line is that the final solution ensures that sports funding in member states can be guaranteed.

The UK was unable to sign up to the declaration as 'games of chance' may be interpreted as referring to both state-run lotteries and electronic online gambling activities.

"It is better to have a services directive with carefully thought through and well drafted derogations and exceptions (as for games of chance) than not to have a directive at all. By sticking rigidly to the position that games of chance must be taken out of the directive, you run the risk of not having rules or regulations for the field of gambling or games of chance at all," Luxembourg Sports Minister Jeannot Krecké told EURACTIV.

The European Non-Governmental Sports Organisation ENGSO plus sports federations from Germany, Denmark, Finland and the Netherlands all want gambling excluded from the services directive to safeguard the existence of the unique sport structures and their valuable contribution within the EU.

During a hearing in September 2004, most MEPs said that they did not want lotteries/games of chance included in the directive and especially not covered by the 'country of origin' principle.

The Association of Remote Gambling Operators (ARGO), an alliance of remote gambling operators based mainly in Britain, Gibraltar and Ireland, has produced a report arguing that in some member states restrictions are being enforced primarily to protect domestic gambling providers and/or tax revenue and not, as claimed, for acceptable public interest reasons.

"Under EU law, ARGO thinks that it should be possible to provide cross-border gambling services in another member state and is therefore against the proposal by Evelyn Gebhardt to exempt gambling from the services directive. ARGO says that national governments are exaggerating the argument of protecting consumer interests to block access to the markets. In reality, they are protecting state gambling monopolies," says Clive Hawkswood, the director of ARGO.

"We accept that state lotteries are always going to be treated differently from other forms of gambling so we would not object to whatever they wanted to do in relation to the directive, as long as remote gambling is included," he added.

In a related development, at a conference of German Länder federations and German sport federations in early May, the sports federations DSB and NOK have produced a resolution calling for the monopoly on sports betting activities to stay with the German federal government and Länder.

The underlying idea behind the services directive is to reduce bureaucratic barriers between member states in the cross-border provision of services. Currently the principle of mutual recognition leaves room for manoeuvre for member states to put up de facto barriers as it is the country to which a service is imported that has the ultimate say on whether minimum standards have been observed.

The Commission wishes to introduce the concept of 'country of origin' whereby mutual recognition would be truly automatic (and not subject to bilateral talks between EU countries) and there would be a switch from checks being undertaken by the member state importing the service to the member state exporting the service.

Rapporteur Evelyn Gebhardt's proposal reverts to the 'mutual recognition' principle.

The precise definition of 'games of chance' is also a potential issue. The Commission's proposal refers to 'games of chance, including lotteries and betting transactions'. No distinction is made between state sector and private sector operators.

According to European Lottery Association estimates, in 2002 over 1.5bn euros in state lottery funds were distributed to amateur sport. A total of 15bn euros was estimated to have gone to good causes ranging from culture, education, welfare and amateur sport.

  • Rapporteur Evelyn Gebhardt is expected to produce a 2nd draft of proposed amendments to the services directive by the end of April/early May
  • The EP's Internal Market and Consumer Protection Committee is expected to vote on the amendments in June/July
  • A plenary vote is expected to be held around September/October

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