Online Gambling Access Brings European Legal Skirmishes

A complaint to the European Union over access to the German online-gambling market, a French court decision recognizing the need for compatibility between French and European Union law, and a curious Finnish 'think tank' paper proposing an ultimate non-responsibility toward gambling debts as a way of short-circuiting the online market all highlighted European headlines in recent days. As always, the stories made it plain that online gambling remains one of the most contentious of all Internet-based business markets, with no easy solutions at hand.

The formal complaint filed by the European Gaming and Betting Association [EGBA] with the European Union last week is a direct challenge to the recently passed 'German Interstate Treaty', a law banning virtually all forms of online gambling excepting horse racing. That law went into effect on January 1st but is expected to face legal challenges within Germany as well. EGBA, a not-for-profit association created by eight of Europe's largest online-gambling providers (PartyGaming, bwin Group, Unibet, bet-at-home.com, The Carmen Media Group, Expekt, Interwetten Gaming Ltd and digibet), assailed the new law in its complaint with the EU.

The EGBA noted in its complaint that the German Interstate Treaty was "in direct contravention of European law." The EGBA also stated that the new law was enacted despite standing EU objections over a like ban previously enacted by individual German states. The complaint noted that "[the law's] adoption shall not only restrict the activities of EU operators but directly challenges the Commission's clear position under the notification procedure itself."

The EGBA's Secretary General, Sigrid Ligné, put it even more directly: "The German Interstate Treaty is incompatible with EU law, and its adoption has left us with no other choice but to make a formal complaint to the EC. We urge the Commission now to fast track our complaint and launch infringement proceedings against Germany."

A decision in a relatively unknown French case not directly connected to online poker nonetheless drew attention across the online-gambling spectrum. In the case, the Court of Appeals of Versailles ruled on a request by Didier Dewyn, the former CEO of Mr Bookmaker, to have French proceedings against him annulled due to the legality (as alleged by Dewyn) of the Mr Bookmaker services under EU accord. Those services were described as "illicit lottery" and "clandestine betting on horse races" in Dewyn's April 2007 indictment.

The Versailles appeals-court decision, however, instructed the French government to provide proof that the French regulatory framework was in accord with recent EU decisions regarding online gambling and the free trade of services across borders within the 27-nation EU bloc. France, as with at least nine other EU member countries, has struggled to find a way to protect monopolistic, government-controlled revenue streams derived from 'legal' (state-authorized) forms of gambling while steering clear of EU mandates for free trade.

Elsewhere, a 'white paper' commissioned by a department within Finland's Ministry of Social Affairs and Health offered the suggestion that simply declaring all online gambling debts legally null and void at the whim of the losing party would be an effective deterrent to the evils of gambling, as a means of protecting children and problem gamblers.

The paper was created by Kalle Määttä, a law and economics professor at Finland's University of Joensuu. Määttä was asked to explore possible legal avenues for restricting access to online gambling. Määttä duly noted two possible ways of restricting access that have already been incorporated into other nations' laws, that of blocking online-payment processing and of implementing ISP-centered bans on online gambling sites. It was Määttä's third proposal, though, that drew notice: Simply grant gamblers who lost money the legal recourse to recover that money, whether from the site itself, the payment-processing company, or even the individual player who won, if the venue where the gambling took place was deemed illegal under Finnish law. Such a solution, of course, would render as meaningless the concept of gambling itself, and perhaps be the ultimate in 'nanny state' protectionism.

The possibilities inherent in such a solution were first explored in a story in the Finnish newspaper Helsingin Sanomat, and then quickly picked up in gambling-media circles. Some reports quickly veered into the sensational, asserting that online-gambling companies would quickly exit the Finnish market. Other, more reasoned stories noted that the proposal was offered in a 'vacuum' of sorts, as part of a much larger government study within a decidedly anti-gambling agency. The concept is not a part of any current Finnish legal proposal, and a law such as this would raise constitutional questions and almost certainly cause a direct challenge within the European Union, which includes Finland as a member. In any event, no legal changes to Finnish laws regarding online gambling are expected in the near future.

• 
• 
• Email to a friend
• Print