DESPITE BEING the source of some anxiety across the remote gaming industry, the adoption in March by the European Parliament of Danish MEP Christel Schaldemose’s report on the integrity of online gaming will have a limited effect.

Unsurprisingly, the measures it proposes to safeguard the integrity of sporting events are highly protective of gambling monopolies across the EU. But while its adoption by a majority vote is a clear statement of a dominant bias within the Parliament towards monopolies, its practical effect on regulation at the European level will be limited.

The first reason for this is that the report is not intended to lead directly to a legislative initiative. Thus while the Council of Ministers has established a working group to debate these issues and the European Parliament intends to follow suit, it is unlikely substantial proposals regarding the regulation of remote gaming will emerge in the short term.

This leaves conclusive legislation in the gambling sector at EU level some distance off but does leave the door ajar for European operators and trade associations to step up dialogue with politicians and regulators to influence future legislation.

Lobbying efforts on this front should be helped by the unsubstantiated nature of several of the main claims made by Schaldemose in her report, and the array of compelling evidence to present to the contrary.

In fact, beyond justifying member states protecting their monopolies, it is the unfounded assertions that online gaming provides increased potential for fraud, fixing games, illegal betting cartels, money laundering and gambling addiction than its land-based form, that are most damaging.

One such claim is that online gaming presents a threat to the integrity of sports events. The evidence to support this claim is flimsy at best. The Memorandums of Understanding Europe’s leading operators have in place with leading sporting organisations means they’re able to rapidly identify when large sums of money have been placed on a particular outcome.


Unsubstantiated claims

Another claim made by the report is that online gaming sites are more prone to identity fraud and credit card fraud than other types of e-commerce site. Not only is this unsubstantiated, its proposal to oblige operators to make greater use of pre-paid card solutions would actually open the way for increased money laundering activity, which is virtually impossible under the existing system of retaining detailed credit card data on customers.

Further, the report’s recommendation that the increased risk to consumers from what is an inherently cross-border industry means its regulation should be subject to Member State laws, and not to the free market principles enshrined in the EU Treaty, renders several of its key proposals unworkable. These principles as applied to remote gaming were clearly upheld in the Gambelli and Placanica cases, and another judgement is expected in the Bwin-Santa Casa case.

There’s also the matter of the 36 MEPs who voted against and 66 who abstained from adopting the report. While far outweighed by the 544 who voted in favour, it does represent a softening up of Member States’ firmly entrenched positions of just a few years ago.

As Tom Lippiett, betting and gaming lawyer at Berwin Leighton Paisner observed, the fundamental question again raised by these developments is how long the European Parliament can sustain its position of effectively setting aside key principles of EU law “in order to protect national monopolies from competition under the guise of calling for ‘integrity’ in the market”.

Source: eGaming Review.

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