Online Gambling Integrity Under Scrutiny in EUInternal Market and Consumer Protection Committee to Debate Integrity Report Next Week |
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The European Parliament Committee on the Internal Market and Consumer Protection is set to meet next week to debate a controversial report on the integrity of online gambling with in EU. The report, drafted by Danish MEP Christel Schaldemose, is seeking to get the European Parliament to adopt a resolution which would then stand as the parliament ‘opinion”. Although the opinion would not be legally binding on the European Commission it would act as a negative drag on the debate surrounding regulation and fair competition.
The report states that online gambling accounts for about 5 percent on overall gambling (around €3 billion in 2004) in 
the EU and focuses on the integrity of the industry in the areas of fraud, money-laundering, addiction, and fixed games.
In its current form the draft report states that, in accordance with the principles of subsidiarity, member States have a legitimate interest in monitoring and regulating their gambling markets in order to protect consumers
The report:
• calls on the Commission to clarify the competences of the Member States and the EU in
the field of online gambling
• is of the opinion that the Court of Justice should not define the European gambling market
• considers that online gambling creates an increased potential for gambling addiction
• is alarmed by the increasing cross-over between interactive television, mobile phones and
internet sites in offering remote or online games
• is of the opinion that online gambling is likely to give rise to risks to consumers and that
Member States may therefore legitimately restrict the freedom to provide online gambling services in order to protect consumers
The latter point is of most concern to advocates of free and fair competition within the EU as it effectively recognizes government monopoly as a legitimate policy option within the EU.
The report also suggests the establishment of a common code of conduct across the EU but points out that this should only be a concurrent measure to regulation as it is self-regulation which the report deems insufficient.
The report points out that in 20 EU Member States online gambling is allowed, whereas seven Member States have prohibited online gambling. Thirteen Member States have a liberalised market, while six have state-owned monopolies and one Member State has licensed a private monopoly.
The report rightly points out the unsatisfactory position that 50 percent of all cases currently before the European Court of Justice relate to gambling. It says that in these cases the European Court of Justice has stated that freedom of movement (Article 49 of the EU Treaty) applies to gambling services while recognizing the risks involved.
Crucially it concludes that restrictions on online gambling may be justified if they are necessary for consumer protection, for maintenance of the public order (prevention of fraud and crime), for maintaining of the social order (culture or morale) and for preventing gambling from being a source of private profit.
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