EU's decision to halt infringement procedures 'political'

EU's decision to halt infringement procedures 'political'

Tuesday, January 2, 2018 Posted by Andy McCarron
European law
Stephen Ketteley concerned about development of EU gambling laws
Stephen Ketteley

The coincidence of the Scotus PASPA hearing beginning in the US and the European Commission officially calling a halt to its long list of infringement proceedings would appear to be pulling in opposite regulatory directions.

The hearing in Washington DC holds out the prospect of legal sports-betting becoming a thing in more US states, whether land-based, casino-based, online or a mixture of the three. It is surely an enticing prospect. A study conducted late in 2017 from GamblingCompliance.com, for instance, predicts that up to 20 states would opt to take up sports-betting in one form or another and that the combined markets would be worth up to $2bn within five years of opening.

Set against that the seeming backward step on the part of the European authorities. The running battles between what Stephen Ketteley, lawyer at Wiggin and longstanding gambling law expert, called an “innovative, entrepreneurial and somewhat aggressive industry” and recalcitrant, largely monopoly-driven European gambling regimes has been a feature of the sector since the famous Santa Casa decision in 2009.

In case after case over the course of the intervening decade, the European Court of Justice (ECJ) has ruled against jurisdictions which have sought to protect their existing monopoly structures in favour of more open online markets. Naturally, then, the decision to bring to an end the pursuit of the cases is a blow to the industry.

Maarten Haijer, secretary general of the European Gambling and Betting Association (EGBA), said the news was “unhelpful,” suggesting the Juncker-led Commission wasn’t taking its role as guardian of Europe’s treaties “seriously.” He added that the idea that the regulatory and legal challenges of the online gambling sector can be resolved by member states individually “shows a baffling lack of understanding of the digital consumer by the Juncker Commission.”

Ketteley said the decision was clearly “political”. The Commission’s press release points out that the ECJ has consistently recognised the right of member states to organise their own gambling markets as they see fit, which is true. But as Ketteley points out, the Commission fails to note at the same time the many instances where the ECJ has found fault with various national regimes.

The Commission throws back issues around national regimes and complaints to national courts and for sure they will be cognisant that for all member states, domestic law must follow EU law. Yet, without the stick of potential Commission action, individual governments may find that – at the least – they have little incentive to press any further ahead on market liberalisation.

“One might expect certain Member States (who no longer have infringement proceedings against their names) to feel somewhat emboldened and enforcement risk may, in theory at least, increase,” says Ketteley. “Assuming the courts continue to observe the rule of law, one hopes such risk won’t necessarily manifest itself in anything tangible.”

There are solid hopes that this will be the case. In the weeks following the Commission news, for instance, the Swedish government unveiled details of its long-awaited licensing regime that will finally, officially, allow previously offshore licensed operators to enter the online market officially.

Hopes for progress elsewhere, though, might be more damaged by the Commission decision. The progress of liberalisation in Germany has been painfully slow to date, and as much as the infringement case wasn’t acting as much of a spur, even that has now been removed.

Elsewhere is no less complex. Debates in Poland, Spain and France continue to revolve around the potential lessening of applicable tax rates, but hopes rest on governments making decisions that would likely mean less revenues.

In Austria the new conservative, right-wing coalition has put forward a proposal that would radically shake up the sector, categorising sports-betting as a game of chance, thus moving oversight from the regional to federal authorities. In Norway, the payments blocking instigated by the gambling regulators got an official seal of approval from an independent complaints committee and the government is likely to impose new rules on gambling adverts from overseas in the new year.

Totally Gaming says: The ending of infringement proceedings won’t change any of this. But it does mean the European gambling operators have lost one argument. Their counterparts on the other side of the Atlantic will hope for better luck.

 

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