The European Commission took a decision last week which came as something of a surprise to the gaming industry across Europe: it decided to close all infringement proceedings and treatment of complaints related to gambling. The reasoning behind the decision, as outlined in their press statement, concerned “prioritising cases in a strategic manner”. It further notes that is it not a priority of the EC to use its powers to “promote an EU Single Market in the area of online gambling services” and reaffirms its recognition of member states’ “rights to restrict gambling services where necessary to protect public interest objectives”. Amongst these, it cites protection of minors, gambling addiction, and combating fraud as examples of such aims. Those with complaints are recommended to resort to “national remedies” and courts for resolution.
The Remote Gambling Association (RGA), which represents about thirty firms in the industry, have since stated that they view the decision as “highly questionable”, noting that they believe there are cases where the provision of services has been unlawfully restricted within certain jurisdictions. Their complaint is that the EC has “effectively abandoned” the entire sector and given a “free pass to non-compliant regimes” as stated by the CEO of the RGA, Clive Hawkswood.
European Gaming & Betting Organization (EGBA) Secretary General Maarten Haijer also spoke out this week, calling the EC’s decision “unhelpful” and suggesting that the view expressed by the EC that member states can manage online gambling affairs individually showed a “baffling lack of understanding of the digital consumer”.
This decision may well ultimately restrict the access to European markets which operators out of gambling industry hubs such as Malta and Gibraltar have enjoyed thus far. The issue now is how individual jurisdictions choose to interpret the offerings of non-domestic operators to their residents. There are also concerns in the industry that this step back by the EC will result in certain nations maintaining anti-competitive restrictions on online gambling in favour of their own national lotteries.
The fact is that the EC is giving up on enforcement in an area in which it had proved intractably difficult for them to achieve any substantial enforcement against individual member states. They are washing their hands of a taxing challenge in European law, while hanging on tight to any actual taxes generated from regulated gaming which does take place.
