EGBA concerned at EC Green Paper on online gambling

Brussels, 24 March 2011

The European Gaming and Betting Association (EGBA) welcomes today’s publication of the Green Paper on online gambling that will allow for a factual discussion at EU level. At the same time, the EGBA expresses its concern with the apparent lack of commitment to curb further fragmentation of the common market and ensure that consumers throughout the EU enjoy consistent standards of regulated, safe and high-quality products.

Without clear EU framework rules, the European online gambling market, estimated at € 9.08 billion in 2011 (1), risks being driven underground into the hands of black market operators to the detriment of consumers, legitimate EU licensed operators and State finances.

Secretary General of EGBA Sigrid Ligné said: “We welcome the Commission coming forward with a Green Paper and a factual discussion on all aspects of online gambling. We are deeply concerned though that the focus of the paper seems to be on a national rather than an EU approach despite the clear cross-border nature of this sector. What we expect is the Commission to propose an EU regulatory framework for online gambling, as it has done for other inherently highly regulated sectors such as telecoms or pharmaceuticals. In parallel, the Commission in its role as guardian of the Treaty should vigorously and systematically pursue infringement proceedings against those Member States that continue to violate EU law.”

The EGBA’s main comments on the Green Paper are the following:

• The Commission rightly devotes much attention to the questions of consumer protection and prevention of fraud. Indeed as confirmed by the Commission, the Internet offers unique opportunities ‘as it provides the operators with more sophisticated possibilities to track the transactions of each player compared to off-line gambling formats’. Valuable initiatives have been developed in these areas, most recently by the European standards body CEN, which issued a workshop agreement on ‘Responsible Remote Gambling Measures’ on 24 February, setting out a list of 134 concrete measures that ensure responsible gambling and provide greater protection for consumers throughout the EU.

• Unfortunately the Commission is silent on the need for hard EU rules to combat the increasing fragmentation of the Internal Market through uncoordinated national prohibitions and restrictions. Yet, as the Commission itself admits: ‘The development of internet and the increased supply of online gambling services have made it more difficult for the different national regulatory models to co-exist.’

• The cost of this fragmentation and duplication of national requirements is particularly high. A study conducted in 2010 by Price Waterhouse Coopers shows that, for France alone, the administrative and technical costs for obtaining and maintaining the national licence to operate on the French market are € 8.7 million for a single EU operator, already licensed in one or several other Member States. National licensing regimes imposing such burdens on the service providers only benefit non-EU licensed black market operators to the detriment of player protection.

• Go-it-alone national rule-making risks being at odds with the jurisprudence of the CJEU, which sets clear limits to restrictions that can be imposed on legitimate EU operators, and may infringe competition rules. Between 2006 and 2010, over 150 national draft acts and laws have been notified to the Commission for single market screening, and many have received a formal warning from the Commission for not complying with EU law. Infringement cases have been commenced against several national laws put in force despite the Commission’s early warning. However, since early 2008 no developments have taken place in the pending infringement cases and no new infringement proceedings have been opened.

Sigrid Ligné concluded: ´The launch of this Green Paper should under no circumstances cause the Commission to freeze pending or avoid opening new infringement cases against national regulations that are in violation of the Treaty.´

---------------------------------------------------------
(1) H2 Gambling Capital March 2011 (EU 27)

For further information or comment please contact:
Sigrid Ligné: +32 2 554 08 90
Sigrid.Ligne@egba.eu

About EGBA
The European Gaming and Betting Association is an association of leading European gaming and betting operators Bet-at-home.com, BetClic, bwin, Digibet, Expekt, Interwetten, PartyGaming and Unibet. EGBA is a Brussels-based non-profit association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union. Online gaming and betting is a fast growing market, but will remain for the next decades a limited part of the overall European gaming market in which the traditional land based offer is expected to grow from € 79.6 Billion GGR in 2009 to € 83.7 Billion GGR in 2012, thus keeping the lion’s share with 87% of the market. Source: H2 Gambling Capital, April 2010.