European Gaming Harmony or Discord?

Regardless of the September European Court of Justice (ECJ) findings in Germany and Austria favour online casino operators. It still doesn’t give most European operators the peace of mind they so desperately need.

Articles 56 and 49 stipulates the Freedom to trade and the freedom of establishment rights of the Treaty on the Functioning of the European Union applicable to gambling, in contrast to this it’s lost its momentum and there is a lot of ill-favoured political undercurrents on the go.

The UK who’s been hailed as a staunch advocate for the free gambling market has indicated the chances are slim that it would introduce a local licensing system that will enable foreign operators to enter the UK market. However, there is still light at the end of the tunnel referring to the German and Austrian cases and the EJC’s assessment that there could not be an inconsistent approach which what services were to remain the preserve of a monopoly, in addition to this tendering for any monopoly licences must be an open and transparent process.

At this point in time it’s rather difficult to ascertain whether this would impact positively on the internet casino industry:

• In Austria the Engelmann case only applies to a bricks and mortar supply.  The ECJ stated in the German cases that monopolies should be seen as a sensitive case and it has various social responsibilities that it must address at the same token.

The good news is that the German decision will encourage the federal government to revise its ban on internet gambling which has been implemented by the Interstate Gambling Treaty and endeavour to introduce a limited licensing regime.  Regardless of the EJC case rulings the Netherlands, has ruled in favour of its present monopoly in the Ladbrokes/Betfair cases and announced it will contemplate whether or not to introduce an internet poker regime.

Casino operators presently find themselves in a “catch 22” situation.   The majority of governments in the larger EU feel that the consumer right should be protected and that internet casino vendors should be controlled by means of issuing limited domestic gaming licenses, this in turn will ensure a steady influx of much need casino tax revenue. Governments in turn must ensure that proper measure are in place and are properly policed to prevent not only stagnation but to prevent casino players from being exploited.

Local licensing

Let’s hope local licensing does not became a serious problem and if it does what next?  It’s imperative that EU vendors do not became embroiled in polarisation like the US market. The Unlawful Internet Gambling Enforcement Act (UIGEA) divided vendors into two categories: licensed and non-licensed operators.  Lawmakers must avoid falling into this trap by implementing proper procedures that governs online gambling sites properly.

What are the advantages of local licenses? For one it indicates consistency.  Irrespective of any unfairness, the European Commission is reluctant to challenge even the very limited licensing regimes such as France.  Also, by staying close to the newly elected regulator the chances are better to establish a working relationship.  The last but not least the licensing system fosters value from an investor perspective.

The prevailing mood in Europe it gives scope to operators revise hedging their bets with B2G supplies even in advance of a licensing regime opening up. Presently very few EU member states t forbid all forms of outsourcing.  It would pointless if a monopoly cannot competitively source some support services from third parties.

However, it does not justify the current situation be it fair or right.  The chances are reasonably good for a fairly ludicrous regime enabling casino operator to require a whole bunch of licences to operate in a single economic region, this could be surmised at the end of the day as fiscal driven rather than morally inspired.

Governments in the EU must get the proper message across to operators. The consumer’s choice must be properly championed and the US lobbying profile had a significant impact on formalised and high-profile consumer lobby groups.  Hopefully the EU will follow the US’ example when it comes to the implementation of gambling laws and in turn protect player interests as well.