Wednesday, October 11, 2006
European Commission inquiries into gambling restrictions

The European Commission has asked Austria, France and Italy to provide information on national legislation restricting the supply of certain gambling services.

Earlier this year, the Commission made similar requests to Denmark, Finland, Germany, Hungary, Italy, the Netherlands and Sweden. None of these requests for information has lead to any further action by the EU executive. In each of these cases, the European Commission wants to ascertain whether the countries' restrictions are compatible with EU law.

The Commission's latest initiative adds to the confusion created by fierce lobbying and litigation of the private gambling industry. This confusion is possible because there is no specific EU law on gambling. In 1992, the Heads of State decided that the EU should not harmonise gambling law.

However, the Internet has made it easier for companies to offer off-shore gambling services to citizens of EU members states where this is unlawful. Private gambling companies have subsequently started to create an illegal market while challenging the legal restrictions in an attempt to make their unlawful business lawful.

In the absence of specific EU law, these operators call upon the general principles of the EU Treaty on the free movement of services. This Treaty also allows exceptions to such free movement, for example to protect public order or health. However, the inprecise nature of the/any Treaty has resulted in different legal judgements and has allowed political interests in the European Commission to drive a free trade agenda.

The matter of fact is that the national monopolies or restrictive regimes have all been upheld following legal judgements and Commission inquiries. The matter of fact is also that the European Parliament and the Council of EU Member States have both thrown out Commission proposals to harmonise gambling law under this year's Services Directive.

What has changed compared to 1992, other than the introduction of Internet, is that Member States have become concient that they can only uphold gambling restrictions for justified reasons, such as mentioned above, and not for fiscal reasons.

The Internet's short role in the matter has just been confirmed by the US government that confirmed their online gambling ban last week by prohibiting credit card companies to take gambling transactions. After all, the Internet is not bounderless.