Working toward a safer, cross-border digital gambling environment
As the new EU term begins, much attention has already been given to the importance of making Europe’s digital economy work better for European consumers. Ensuring the EU single market embraces the digital reality and is less impeded by national barriers is a major challenge, but one that EU policymakers must grapple with to prevent Europe’s economy being left behind by global digital transformation.
And while much progress has already been made in terms of the EU digital single market rules, it is vital to ensure these rules harmoniously intersect to safeguard the rights of consumers and promote the interests of online businesses. Because today the online economy goes far beyond music streaming, or buying a book online, and includes almost anything you could imagine — including placing a bet on the outcome of your favorite football team’s next match. EU regulation needs to keep up. Here are five reasons why:
1: Online gambling is popular and inherently cross-border
Like any other activity, the emergence of the internet also transformed gambling. Beginning less than 20 years ago, one-fifth of Europe’s gambling is now conducted online. Today, EGBA’s member companies have over 12 million European customers, living across 19 EU countries, and who are now able to find the best offers online. The challenge in today’s borderless, digital world is to ensure that these citizens only use gambling websites licensed in the EU and are fully protected by European consumer protection rules when they play online.
2: There is a patchwork of national rules and no single market
Although some EU regulation applies to online gambling, such as the GDPR and the anti-money laundering directive, it is a sector almost entirely regulated by national policies. The result: 28 different sets of national rules working in isolation to each other – leading to policy fragmentation and divergence. In an era when Europeans can easily access websites operated from anywhere in the world, policy inconsistencies can lead to its citizens being exposed to different rules or websites that don’t protect their rights or interests.
3: Current EU consumer protection standards are inadequate and diverge significantly
Recognizing this problem, in 2014, the European Commission outlined a list of safeguards for online gambling – and for responsible advertising and sponsorship – that EU countries should adopt to ensure a high level of protection for European consumers and minors. The Commission committed to review its implementation by January 2017, but recently acknowledged it isn’t prepared to measure the effectiveness of its own proposals. A recent study, however, found only one EU country has fully implemented the safeguards, and that big gaps exist in how gamblers are protected across Europe, which is solely dependent on where they live. For example, only 14 EU countries have a gambling self-exclusion register — recommended by the Commission — which allows citizens to block themselves from accessing gambling websites and is an important safety net for those who gamble too much. A recent European Parliament study found that closing these gaps would also save €6 billion per year. To ensure a safer online gambling environment across EU countries the incoming Commission should start by enforcing its existing consumer protection proposals.
4: There is no formal framework for regulatory cooperation between EU countries
Every major European consumer market is served by regulatory cooperation between market authorities, with the exception of online gambling. The Commission previously facilitated a national expert group of gambling regulators which it disbanded in 2018 despite regulators considering it to be a great success and a valuable platform for information exchange. There is now no formal framework for regulators to even communicate, let alone to jointly tackle the big issues affecting the sector, which are cross-border and require common solutions. In the absence of policy consistency, more cooperation between regulatory authorities is a vital necessity to encourage exchanges of best practice and better alignment of national policies. The incoming Commission should reinstate regulatory cooperation between national gambling regulators to ensure better policy consistency.
5: EU rules are not being enforced in the sector
The Commission made these matters worse, in 2017, when it decided to stop enforcing EU single-market law in the sector. Since then, it has systematically disregarded any complaint about the application of EU law in EU countries. The effect: national authorities know they don’t need to worry about whether their policies comply with EU law and consumers and business are being treated differently than in other EU countries. The application of EU law should not be optional. Any serious legal complaint should get a fair consideration, irrespective of the sector it pertains to.
You might find it seem strange to hear of an industry calling for more EU regulation, not less. But the truth is the existence of 28 different sets of rules, each with their own compliance requirements, means significant administrative and regulatory costs for companies. We need one set of rules providing better regulation of Europe’s online gambling activities, better-protected citizens and clear rules for gambling companies to comply with.
That’s why we urge EU policymakers to work together in this new EU term to establish a better standard of protection for all Europe’s online citizens and single-market policies fit for the digital age.
By: Maarten Haijer, Secretary General, European Gaming and Betting Association (EGBA)
*This article appeared in Politico.eu on 25 Sept 2019.