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Online gaming and betting: French draft legislation fails EC law test
The European Gaming and Betting Association (EGBA) welcomes the European Commission’s detailed opinion against the French proposal for online gaming and betting. The draft legislation is supposed to regulate the online gaming and betting market in France, but is under increasing criticism for only serving to protect the French monopolies Française Des Jeux and PMU.
Maarten Haijer, EGBA Director for Regulatory Affairs said: “Today’s action by the Commission underlines that online gaming and betting is a cross border economic activity where EC legal requirements prevail. It makes no sense to create a local Internet market in France. We welcome the Commission’s action and are confident that France will reconsider its proposal to avoid litigation”.
The French draft law was notified to the European Commission and the other Member States on 5 March. At the time EGBA already flagged a number of key provisions that are highly questionable under EC law. These include:
- Limiting the opening of the gaming market to the online segment only
- Limiting the opening of horse betting to pool betting only - justified by the government because it is ´French tradition´;
- Limiting the average pay back ratio (percentage of stakes paid back to players) to the same level of those currently applied by historical operators. There is no evidence or known impact of such a measure on the protection of consumers;
- The proposed license system fails to take into account securities and controls already offered by other EU jurisdictions, in conflict with well known jurisprudence of the European Court of Justice;
- The creation of a ´sports betting right´ in favor of sports federations which hardly can be called a credible means to prevent match fixing, especially when operators already have developed early warning systems to prevent those risks.
This is the third detailed opinion from the Commission against recent draft legislation aimed at creating a local internet market in France. The first was issued July 2007 against a draft decree obliging Internet Service Providers to discourage consumers from accessing non French licensed operators (see here). The second was issued in March 2008 against the draft decree on payment blocking (see here). Both decrees have not been adopted since. “It is clear that the French proposals fail to set the standard for legislating the sector” added Maarten Haijer.
Today’s detailed opinion extends the standstill period until 8 July 2009, during which time France cannot adopt its draft legislation. If France subsequently decides to adopt this text without taking into account the Commission’s objections, the Commission can immediately launch infringement proceedings.
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For further information or comment please contact:
Maarten Haijer: +32 (0) 2 256 7527 maarten.haijer@egba.eu
The EGBA is an association of leading European gaming and betting operators Bet-at-home.com, bwin, Digibet, Expekt, Interwetten, PartyGaming and Unibet. EGBA is a Brussels-based non-profit association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union. Online gaming and betting is a fast growing market, but will remain for the next decades a negligible part of the overall European gaming market in which the traditional land based offer is expected to grow from € 78,5 Billion GGR in 2008 to € 82 Billion GGR in 2012, thus keeping the lion’s share with 88,1% of the market. Source: H2 Gambling Capital, January 2009.
The Notification Procedure Under Directive 98/34/EC, Member States must notify to the Commission and other Member States draft regulations regarding products and Information Society services such as online gaming and betting, before adopting them. This procedure is aimed at preventing Member States from creating new barriers to the internal market freedoms by giving the opportunity to the Commission and Member States to evaluate the content of a draft law before it is adopted. The notification of a text to the Commission opens a three month standstill period during which the draft text must not be adopted. This period allows the Commission and Member States to ascertain whether the draft text presents any unjustified barriers to the internal market. The Commission and/or Member States may then issue:
- a detailed opinion, if they consider that the draft text would, if implemented, create barriers to trade, services or establishment within the EU;
- comments, if they consider that the text raises issues of interpretation or requires further details; or
- no response, if they consider that the text is compatible with EU law.
A detailed opinion attempts to prevent Members States from adopting a text, which contains barriers to the internal market, or to urge them to remove the restrictive provisions, thereby avoiding unnecessary legislative work and future EU infringement proceedings.
Once a detailed opinion had been issued, the standstill period, during which the draft text must not be adopted, is extended by one month. If, after this time, the draft text is adopted without modification, the Commission can immediately commence an infringement procedure against the Member State’s newly adopted legislation. On 31 January 2008, the Commission launched an infringement procedure against Germany after it failed to respect the detailed opinion issued against it in March 2007: Link to Commission press release.
To access the TRIS database and search for other draft laws see: http://ec.europa.eu/enterprise/tris/pisa/app/search/index.cfm?lang=EN
