MEPs divided over online gambling

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In an unusual move, the European Parliament is set to vote on two different reports regarding online gambling next month. A minority of MEPs strongly disagree that member states should be allowed to regulate online gambling, calling for internal market rules on freedom of services to be applied instead.

The Parliament’s internal market and consumer protection committee adopted, with 32 votes for and 10 against, an own-initiative report by Danish MEP Christel Schaldemose on the integrity of online gambling on 11 February.

The report, which focuses on the integrity of the industry regarding fraud, money-laundering, addiction, underage gambling and fixed games, is not binding and will not immediately lead to any legislative initiatives.

Subsidiarity principle vs. internal market rules

While the report highlights member states’ right to regulate the industry at national level under the subsidiarity principle, it also calls on the Commission to clarify the competences of the member states, and on the Council to seek “a potential political solution” to the problems of gambling and betting. MEPs also underline that the European Court of Justice should not define the European gambling market. 

Protecting consumers, fighting fraud

MEPs back the idea of setting age limits for online gambling and banning credit and bonus schemes to protect vulnerable gamblers. They are also exploring the possibility of introducing maximum amounts that a person can spend on gambling activities per month. Another possibility would be to oblige online gambling operators to make use of prepaid cards for online gambling. They also call for more and better information about the potential addictiveness of certain games and where to get help.

Regarding potential criminal activities, the report calls for better national cooperation to address data misuse and payment card fraud, which can occur if a player steals someone else’s identity by hacking into an IT system or using stolen credit cards.

Funding of sport

MEPs are concerned about the deregulation of gambling, which they say is “by far” the most important source of income for sports organisations in many member states. 

They also note that bets taken by private operators are “a form of commercial exploitation of sports events” and recommend governments to protect sporting competitions from any unauthorised commercial use and take steps to ensure fair financial returns for the benefit of all levels of professional and amateur sport. 

An alternative report

A number of MEPs are supporting a minority opinion that will be attached to the text, soon to be developed into an alternative report to be submitted to the plenary, because they are “concerned that the content of the report goes beyond the remit of the initiative which intended to focus on the transparency of the online gaming market, the integrity of online gambling operators and the possible consumer detriment caused by the online gaming industry”. 

The minority opinion, initiated by British Conservative MEP Malcolm Harbour, argues that the report underlines single market principles and does not adequately reflect the situation across the EU 27, as “well-functioning and well-regulated markets already exist in certain member states that allow consumers to play in a safe and secure online environment”. 

Danish Socialist MEP Christel Schaldemose, draftswoman of the report, said she was very happy with the result of the vote (32-10) on this "sentitive issue". "The report is important because the consequences of growing on-line gambling activities must be adressed and dealt with. I think the report gives responsible answers to the new challenges." 

Finnish MEP Eija-Riitta Korhola (EPP-ED) welcomed the vote, which acknowledges member states' right to decide on their gambling policy. "Dealing with this issue has been extremely challenging," she said, referring to a debate which she says is dominated by two totally different views. The UK and Malta have long been pushing for gambling to be liberalised based on the EU single market. 

Others back a model which considers that the risks related to gambling are such that no single authority can control gambling over the Internet, and therefore the market should continue to be governed and controlled by national authorities.

Korhola also underlined the benefits of the current system, which helps fund civil society organisations in the fields of sport, the arts and science.

Dutch MEP Toine Manders (ALDE) welcomed the adoption of his oral amendment calling on the Commission to give sports organisers intellectual property rights for their competitions, so that they can share income with gambling operators. "This is very good news, especially for football competitions," he said.

Gambling activities have traditionally been strictly regulated at national level to protect consumers against addiction, fraud, money-laundering and fixed games. 

After gambling activities were excluded from the EU's Services Directive, there have been an increasing number of complaints from sports betting service providers regarding access to national markets. 

The Commission subsequently launched several infringement procedures against member states to verify whether national measures limiting the cross-border supply of online gambling services are compatible with Article 49 of the EC Treaty, which guarantees the free movement of services.

The European Court of Justice (ECJ) has stated that a member state cannot restrict its citizens' access to betting services if, at the same time, it encourages them to participate in state lotteries and games of chance (EURACTIV 08/03/07). 

Meanwhile, many member states are holding on to their national monopolies, arguing that the revenue generated is widely redistributed to society, for example by the public financing of sports federations. 

Online gambling is allowed in twenty EU countries, and prohibited in seven others (see European Parliament report).

  • 2 Dec. 2008: A French EU Presidency report on the legal framework and the policies adopted in EU member states on gambling and betting was discussed at the Competitiveness Council. The report identified a number of common challenges making "new reflections at EU-level appropriate".
  • 10 March 2009: EP plenary vote on integrity of online gambling. 
  • By July 2009: The Czech EU Presidency may hold an expert meeting on gambling.
  • After June 2009: Swedish EU Presidency may put gambling on its agenda. 

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