At least it’s better than the Schaldemose Report

17th November 2011 9:17 am GMT

The industry’s trade bodies (and Stanleybet) were falling over each other yesterday to proclaim the virtues of Jürgen Creutzmann’s report on online gaming after it was adopted by the European Parliament.

The press releases came through thick and fast after the Parliament vote. First came the European Betting & Gaming Association (EGBA), whose response arrived almost an hour-and-a-half before the others came flooding in in quick succession. (Speedy work, well done guys.)

However, in their eagerness to praise, almost all avoided talking of the two clauses we highlighted in last week’s blog. The first was the call for the establishment of a sports betting right to be paid to sports’ organising bodies. It is understood that very early in the process French MEPs threatened to withdraw all support for the report unless this was included.

The second point is this little beauty: para 20 suggests “the introduction of a regulatory principle whereby a gambling company can only operate (or bid for the required national licence) in one Member State if it does not operate in contravention of the law in any other EU Member State”.

“All that will do is create more work for lawyers,” a lawyer told me. (No, he wasn’t particularly cheerful about it.)

That same lawyer, DLA Piper’s Stephen Ketteley, went on to say: “It is not a regulator’s role to determine what the laws in another jurisdiction say or mean. They are making a judgement call they are not qualified to make.”

This bizarre proposition has also cropped up in the draft of the German State Treaty. Its only purpose can be to prop up a member state’s gambling monopoly.

“They will use that provision to go hunting for reasons not to grant licences,” UK MEP Ashley Fox told Gaming Intelligence yesterday morning.

Fox, whose constituency includes Gibraltar, has been working on the report together with Creutzmann but has been one of the few to really speak out on the report’s defects such is his dismay at the concessions the report has made to conservative (small ‘c’ but normally socialist in political terms) colleagues.

Despite his criticisms, even Fox felt moved to describe the report as a step in the right direction. The hosannas from the industry are thankful for one thing - it’s better than the Schaldemose Report.

That seems like a fairly low bar to set. But the industry has to show willing. Operators and consumers alike need some clarity. The current patchwork of laws and grey markets might be good for lawyers. And to a large extent it might have created the conditions that have allowed the industry to flourish. But the industry has matured and regulators and politicians cannot and will not ignore or shun a sector that generates substantial revenues and creates jobs.

Many are recognising that this regulatory path is going to be a long one but such patience does not come naturally to an industry so young and dynamic. (“It needs to get used to it,” says Fox.)

The onus now goes back to the European Commission to digest all the responses to its Green Paper. The natural next step should be legislation but this is in no way guaranteed.

“Their attitude to this subject is that they would rather do nothing at all. They regard it as too difficult,” says Fox.

The only evidence needed is the lack of movement on infringement proceedings.

“The Commission should uphold the law,” continues Fox, “otherwise the law is not respected and it is clearly not respected in this sector.”

By member states or many operators, he might have added.

So, how long might we muddle on? Well, those informed sources in Brussels and Strasbourg say the industry’s best hope is that the EC comes back from its consultation with legislation on consumer protection, combating fraud and addiction. Optimistically, that could come a year from now.

The industry will then be able to show how good it is at that.....for, say, three years. Then we might be able to up the ante towards some sort of harmonised regulatory environment, which would probably take another two or three years of discussions, consultation, reports and whatever else. So at best we’re talking seven years down the line. Might as well call it a decade to be conservative. Blimey...

The irony of all this is that the Green Paper and the European Parliament’s response are aimed at addressing the industry’s biggest wish - harmonisation. But taken as a whole, the Parliament’s response destroys that dream by granting member states the power to do pretty much as they please. And then paragraph 20 gives everyone licence to bicker about it.

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