Online gambling laws are pretty confusing in most countries around the world. Effectively legislating how, with whom, and under what circumstances players can gamble over the internet is apparently a difficult thing to do. Governments that have tried have at best been moderately successful and at worst have failed miserably. Some have tried to apply old laws drafted before the Internet was conceived, and others have simply put the whole issue of net gambling regulation in the ‘too hard basket’.
Even where a clear single policy or objective exists, effectively legislating and enforcing this objective is difficult due to the ubiquitous nature of the Internet combined with jurisdictional limitations of national laws. Clear, unambiguous laws in this area are rare, and this is particularly so across Europe.
Conflicting EU member approaches
In Europe the above difficulties are exacerbated by the added complexity of applying umbrella EU law to a group of EU members pushing different cultural and political agendas and wishing to take a legal approach of their very own, often inconsistent with EU law.
The approach taken by the United Kingdom is very different to that of Germany. The former sought to regulate and license online gambling operators and open its doors to all operators licensed in accepted (Gambling Commission ‘White List’) jurisdictions, including all EU members. The latter has tried to ban all non-German operators from taking bets from German residents, while sanctioning local monopoly operators.
The European Commission (“EC”) is trying to enforce a consistent approach across Europe but it seems to be fighting a losing battle to do so. The approach they are trying to enforce is has its roots in the European Communities Treaty (“the Treaty”). Specifically, Article 49 of the Treaty which provides that “restrictions on freedom to provide services within the Community shall be prohibited…”. In simple terms, the law renders it illegal for an EU member to enact laws banning services (including online gambling) provided by foreign (ie from another EU member) corporations to its residents where that same service is able to be provided by local corporations. EU members are well within their rights to ban the provision of any service to its residents on any grounds, so long as the ban applies equally to local service providers.
The EC has issued reasoned opinions to a number of EU members that it considers to be in breach of EU law in this regard. Most, (understandably) are reluctant to change their approach and history has shown that the EC’s power to force change is limited. This hasn’t been helped by the recent European Court of Justice’s Santa Casa decision. Here the ECJ opined that it was alright for a government to enact laws that protected a local monopoly gambling operation and banned foreign online gambling firms provided it was in the public interest to do so.
What does all this mean for European operators and players?
The interesting thing is most operators take the position that if they have a valid online license (eg Malta, Gibraltar, UK etc) they will continue to accept bets from any EU country, regardless of local laws there. Only where they are trying to position themselves for newly available licenses where new regulatory regimes are put in place does this position change.
Take the new French online gambling regulations as an example. Up until recently, French law technically prohibited foreign operators from the market, and yet all major operators accepted bets from French players. Now that French online poker and sports betting licenses are up for grabs, companies that are applying for a license have closed the door to French players while their applications are pending.
By Milton Shaw
Live casinos by European jurisdiction are considered at Livedealer.org’s regional pages including its French live casinos page and Polish live casinos page