The urgency for harmonisation of EU i-gaming is nothing new. Certain countries, such as Malta and the UK, take an open-market approach to the issue on EU i-gaming regulation and have always held that i-gaming is a service in terms of the EU Treaty. In fact, the Treaty does not make a distinction between i-gaming and other services and it requires that all services must be treated in the same manner.
Indeed, Malta's stance has been bold and unique with regards to i-gaming. The country's positive and continuing growth in the i-gaming sector shows no sign of diminishing. Since its inception in 2004, the LGA has processed over 600 applications for a i-gaming licence. I-gaming is one of Malta’s major revenue earners. Today Malta hosts around 405 licensed i-gaming companies.
Cross-border Gaming
I-Gaming is a mainstream activity. It is a service just like any other service and should be treated like one. Therefore, EU i-gaming should be subject to the freedom of establishment and the freedom to provide a service in all EU countries. However, based upon the principle of subsidiarity, most member states held that the regulation of EU i-gaming is an exclusive issue for the sovereign state and claim that they should have the right to allow, prohibit or restrict their citizens from gambling on the internet.
In the absence of reaching a harmonised decision of the EU i-gaming regulations, the European Court of Justice delivered a number of rulings upon the compatibility with European law of domestic laws in the field of EU i-gaming activities, which allow limitations based on public interest. However, what public interest covers, is to date, unclear.
EC Green Paper
In March, 2011 the EC published the long-awaited Green Paper on EU i-gaming services in the internal market, in response to calls from the European Parliament and its Member States to clarify the confusion. The EC identified that the primary aim of the Green Paper consultation is to “obtain a facts-based picture of the existing situation in the EU online gambling market” while investigating the “different national regulatory models.”
Since it had been left to each individual state to decide on a standpoint towards regulation in the absence of such, it is evident that on the issue of EU i-gaming there are many conflicting views which need to be taken into consideration when drafting an EU-wide legislative framework. In fact, the EC identified that the primary aim of the Green Paper consultation is to “obtain a facts-based picture of the existing situation in the EU online gambling market” while investigating the “different national regulatory models.”
The Challenges Facing Internet Gambling
Keeping in mind that the i-gaming sector is of substantial economic importance to the EC, each country, understandably, would like to benefit from such a profitable sector.
However, i-gaming involves a high risk of crime, corruption, money laundering, underage gambling, addiction or fraud, given the scale of the earnings and the potential large winnings on offer to gamblers. Therefore, it needs to be ensured that consumers are protected from these risks that are associated with i-gaming.
It is argued by many (and proven throughout the years) that whether i-gaming is regulated or not, it will still exist and people will still keep on playing online – banning sites is not an option, as people will still find a means of playing. The only solution is to regulate i-gaming - as Malta decided to do. It is essential to provide consumers with a set of serious but reasonable regulations by which they will feel sufficiently protected. On these lines, harmonisation of EU i-gaming regulations would establish mutual consumer protection rules regardless of where they play within the EU. This would definitely promote greater cooperation among EU countries and those risks associated with i-gaming will be better tackled.
Conclusion
Since the internet challenges “classical patterns of regulation” because of its borderless nature, taking a national approach is clearly ineffective. Since i-gaming is an international concept, then the laws governing it should also be international. In absence of such, gamblers within Europe have a tendency to shift their business to operate from non member states. The net outcome is that revenues will drift out of the EU to jurisdictions where gambling may be unfair, control on criminal infiltration are not extensive and there is minimal regard for the well being of consumers, therefore, the optimal option is to grant gamblers well regulated alternatives within Europe. Even if there is no uniform legislation on EU i-gaming, the internal market freedoms enshrined in the EU Treaty are directly effective and grant access to the national markets.
The difficulty is that national governments still impose limitations on EU i-gaming activities involving their nationals, for the most part, to protect state monopolies. Therefore, it will not be an easy task to persuade EU countries to decide in favour of a Community-wide legislation, but the debate promises to be an interesting one.