Stanleybet Newsletter - Issue 16 | January 2010
Legal and political developments in Europe
Commissioner Barnier, please make the Single Market a reality
"The Commission has been, and will continue to be, a determined defender of the Single Market through the full use of its enforcement powers, particularly in the areas of the Internal Market and Competition policy, including State-aid control".
This public statement by European Commission President José Manuel Barroso in his letter to Professor Mario Monti, on 12 October, commissioning him to prepare a report on how to re-launch the Single market, is to be welcomed.
We at Stanleybet have consistently supported the European Commission in fulfilling its mandate as guardian of the EU Treaty, in particular concerning the principles of freedom of establishment and the freedom to provide services. We therefore fully endorse President Barroso's commitment under this new Commission mandate.
This fresh political determination is badly needed: one cannot fail to notice that some Member States have maintained their restrictions in the provision of sports betting services by openly disregarding the EU Treaty, using the fight against fraud and consumer protection as a pretext to protect their national incumbents and related state revenues while providing no evidence whatsoever to show the existence of such problems.
Furthermore, a recent report published by Professor Mark Griffiths of Nottingham University shows that there is no link between levels of gambling addiction and the degree of regulation or restriction in a market.
The gaming and betting sector is undeniably one of the areas "where the Single market is far from being completely in place" as President Barroso puts it. The lack of proper enforcement of Internal Market rules in our sector has had a significant economic impact in terms of lost tax revenues and lost job opportunities. We will therefore continue seizing every occasion to stress this through our fairplayforsportsbetting campaign.
Member States, who blatantly choose to ignore the law and jurisprudence of the EU when denying the rights of EU licensed and regulated businesses within their jurisdictions, must be publicly called to account. In particular, I would invite Commissioner Barnier and his services to remain vigilant towards Member States which publicise the opening of their sports betting market while adopting halfway or cosmetic measures. Otherwise, the internal market will remain little more than a myth for responsible European sports betting companies.
New Internal Market Commissioner
On 27 November 2009, Commission President Barroso announced the list of portfolios for Commissioners. Michel Barnier (France) has been confirmed as Commissioner for Internal Market & Services. This portfolio includes financial services. To counterbalance an excessive French/continental influence, a British Director General for DG Internal Market & Services has been appointed: Jonathan Faull, who was previously Director General for DG Justice, Freedom and Security, and former Commission spokesperson.
Monti to prepare a report on Single Market
On 12 October 2009, President Barroso entrusted Mario Monti, former Commissioner for the Internal Market, Financial Services and Tax policy and for Competition, to prepare a report containing options and recommendations for an initiative to relaunch the Single Market as a key strategic objective of the new Commission. In his letter, President Barroso confirmed that "the Single Market has been and remains the cornerstone of Europe's integration and sustainable growth". Mario Monti will hold consultations with the European Parliament, with the relevant Commissioners, with the competent authorities of Members States and with other stakeholders.
Study on funding of sports
On 10 November 2009, a consortium was contracted by DG Internal Market to carry out a study on the funding of sports in Europe. Coordinated by the consultancy Eurostrategies, the consortium consists of Amnyos (author of a French study on funding of sports), Deutsche Sporthochschüle Köln and the University of Limoges (Centre de droit et d'économie du sport - CDES). The European Olympic Committee (EOC) is a strategic partner, providing advice and access to its membership network. The contract will run for a 14 month period and its conclusions should be released by the end of 2010/beginning of 2011. Questionnaires will be sent to stakeholders at the beginning of 2010. As far as betting is concerned, the EOC is planning to send a questionnaire to the European Lotteries, European Gaming and betting Association (EGBA), the Remote Gambling Association (RGA) and the European Sports Security Association (ESSA). Interviews will be organized on the basis of the responses to questionnaires.
No intergroup on gambling
On 10 December 2009, parliamentary political groups have agreed on a list of 27 intergroups. The intergroup on gambling, whose creation was initiated by MEP Mario Mauro (EPP, Italy), it did not get enough political support and did not appear in the final list.
For the record, at the beginning of each parliamentary term intergroups are required to (re)submit their applications for establishment. Applications must be submitted by Members for signature by at least three political groups. Each group has a limited number of signatures as follows: EPP: 21; S&D: 21; ALDE: 10; Greens/EFA: 8; ECR: 8; GUE/NGL: 6; EFD: 5.
Stanleybet hosts policy seminar on problem gambling
Mark Griffiths, Professor of Gambling Studies at Nottingham Trent University, UK presented on 17 November 2009 a new report on Problem Gambling in Europe during a policy seminar hosted by Malcolm Harbour MEP and Stanleybet in the European Parliament. Professor Griffiths drew attention to the stark lack of quality, consistent and reliable data about problem gambling in the majority of European countries and highlighted the need for a more evidence-based approach to gambling policy formulation.
Professor Griffiths' research is a country-by-country analysis of existing evidence about the prevalence of gambling and problem gambling in 31 countries across Europe. It acknowledges that in Europe gambling is a diverse concept that incorporates a range of activities undertaken in a variety of settings and giving rise to differing sets of behaviours and perceptions among participants and observers. Despite the complexity of gambling activity, however, only one third of countries surveyed have carried out rigorous research into gambling and problem gambling.
Nikolaos Chountis (GUE/NGL, Greece)
On 7 December 2009, MEP Nikolaos Chountis (GUE/NGL, Greece) tabled an oral question entitled "match-fixing in football - a bad example for young people". In his introduction, Mr. Chountis refers to the UEFA investigation, announced in 2009, into match-fixing. "Such incidents clearly give a bad example to young people and distort the ethos of sport, which is being undermined by the huge amounts of money changing hands in betting and gambling operations", he commented. That is why he intends the Commission the following questions during the January plenary session (18 – 21 January 2010):
"Has it looked into this matter and, if so, what view does it take about it?
What measures does it expect UEFA to take vis-à-vis the federations, the teams, the managers and the players involved in this scandal?
Given the huge sums gambled every year in legal or illegal betting operations which are a permanent incentive to 'fix' sports events, what measures does it intend to take?"
IMCO committee oral question on online gambling
On 18 November 2009, an oral question on "Online gambling in relation to recent ECJ rulings" was tabled "on behalf of the Internal Market & Consumer Protection (IMCO) committee" and therefore co-signed by its Chairman Malcolm Harbour (ECR, UK) as well as the IMCO coordinators from the main political groups: Andreas Schwab (EPP, Germany); Evelyne Gebhardt (S&D, Germany); Cristian Silviu Bu?oi (ALDE, Romania); Heide Rühle (Green/EFA, Germany) and Adam Bielan (ECR, Poland). Initially scheduled on 17 December 2009, the question was removed from the provisional agenda of the December plenary session (from 14 to 17 December).
Liam Aylward (ALDE, Ireland)
On 5 November 2009, MEP Liam Aylward (ALDE, Ireland) tabled the following written question: "Has the European Commission any plans to introduce regulations to protect and limit the ability of underage persons or vulnerable person from engaging in online gambling?". Commissioner McCreevy delivered its answer on 4 January 2010 stating that the Commission has no plans for the near future on this issue. Moreover the Commission specifies that "Member States have the right to establish their own national provisions when it comes to gambling, including measures aimed at protecting consumers from addiction, but they must do so in conformity with the EC Treaty."
Mitro Repo (S&D, Finland)
On 19 October 2009, MEP Mitro Repo (S&D, Finland) tabled a written question on quick loans granted via text messaging or on the internet, which are popular in the Nordic countries. The average interest rate for these loans can be over 500%. Repo deplored the absence of a proper regulation at EU level and stressed that "those with drug and gambling problems (...) are at particular risk of falling an inescapable cycle of debt as a result of accumulated quick loans". Therefore he asked the Commission if it had "up-to-date statistics on the use of quick loans, and what measures it proposes to take to regulate activity in this area".
In her response, Commissioner for Consumer Protection, Meglena Kuneva, stressed that consumers who conclude a loan contract via internet or SMS are protected by the directive on Distance Marketing of Consumer Financial Services and by the new directive on Credit Agreements for Consumers, which is being transposed into the national laws. Commissioner Kuneva added that both texts provide that creditors have to provide the consumers with a set of information "in good time before the contract is concluded". She finally indicated that, according to the directive on Credit Agreements for Consumers, this information includes "the indication of the annual percentage rate of charge representing the total cost of the credit" and that "creditors are obliged to assess the consumer's ability to repay the loan before granting the credit".
Council of the EU
Progress report by the Swedish EU Presidency
On 4 December 2009, the Swedish Presidency presented its Progress Report on the Legal Framework for Gambling and Betting in the Member States of the European Union to the Competitiveness Council. The Presidency report gives particular attention to the socio-economic problems of gambling, gambling responsibility measures as well as national bans on promotion of "crimes" related to gambling and betting. The forthcoming Spanish EU Presidency (1st semester 2010) will be holding a series of Council Working group meetings.
Belgian Presidency plans
On 10 November 2009, the Belgian Gaming Commission outlined the priorities of the Belgian EU Presidency (2nd semester 2010), during an international seminar held in Leuven. The key objectives will be to improve the protection of players and to fight against criminality and fraud.
European Court of Justice (ECJ)
Latest developments and next steps
Oral hearings in the Austrian Ernst Engelmann (C-64/08) and Swedish (C-447/08 and C-448/08) joint cases will take place on 14 January 2010.
Advocate General's joint Opinion in the ‘Betfair' and ‘Ladbrokes' cases (C-203/08 and C-258/08): on 17 December 2009 Advocate General Yves Bot pointed out that holders of exclusive gaming licenses may be authorised, in "certain circumstances" to make their offer attractive by introducing new games as well as by using advertising. Mr. Bot also noted that when granting exclusive gaming rights to an operator, the competent authorities must ensure an adequate call for tender under the licensing procedure or as part of the renewal of that licence.
Hearings in German cases: oral hearings took place on 8 and 9 December 2009 for the ‘Winner Wetten' case (C-409/06), 6 joint cases (joint cases C-316/07, C-358/07, C-359/07, C-360/07, C-409/07 and C-410/07) as well as the Carmen Media case (C-46/08). The Advocate General is expected to deliver his Opinion on 3 March 2010.
New reference for a preliminary ruling: an Austrian Court, Bezirksgericht Linz, lodged a reference for a preliminary ruling with the ECJ. Published in Official Journal of the EU on 21 November 2009, this reference was lodged in the framework of a criminal case involving Bet-at-home.com co-founders Jochen Dickinger and Franz Ömer. It deals with:
§ (i) The EU compatibility of Austria's licensing system for lottery games and casinos;
§ (ii) The conflict between a member state's criminal law and the freedom to provide services;
§ (iii) The consideration of conditions and rules European operators already respect when they are licensed in another EU country, according to the principle of proportionality.
Judgment in the ‘Commission v. Spain' case (C-153/08): on 6 October 2009 the ECJ delivered its judgement on the ‘Commission v. Spain' case regarding a discriminatory taxation regime against other operators than lotteries organised by the Spanish Red Cross or the Organización Nacional de Ciegos Españoles (Spanish national association for the blind). The Court ruled that the Spanish practice to exempt from taxation winnings from certain Spanish lotteries and games while imposing taxes on winnings coming from similar bodies and entities established in another member state are in breach with Art. 49 EC and Art. Article 36 of the Agreement on the European Economic Area.
Judgment in the bwin v. Santa Casa case (C-42/07): on 8 September 2009 the Court handed down its judgement on the ‘bwin v. Santa Casa case', in which it ruled that the Portuguese state monopoly on betting may comply with EU law and quashed the principle of mutual recognition in the gaming sector. The Court points out, however, that restrictions on the freedom to provide services may be justified by overriding reasons relating to the public interest.
Gaming reform almost achieved
The House of Representatives (Lower Chamber) adopted on 3 December 2009 the project law on games of chance (by 82 for, 33 against and 16 abstentions) as amended by the Senate (Upper Chamber) and without adding any amendment. This vote put an end to a rather swift bicameral examination, which started in June 2009. Secretary of State Carl Devlies' project law is now definitely adopted by Parliament. His text was submitted to the King for signature at the end of December 2009 and will come into force as soon as it is published in Belgium's Official Journal.
The main change brought by the Senate in November deals with bets on horse races: offering pool betting on (Belgian and foreign) horse races is now also authorised in shops other than class IV gaming establishments (betting agencies). In addition, pool betting on foreign horse races can only be organised by the organiser of these races or with its authorisation.
Meanwhile, the Belgian government is also working on the Royal implementing Decrees. Initially drafted by the Gaming Commission, the Royal Decrees should be submitted in January 2010 for examination by a number of ministerial cabinets, and parliamentarians (as promised by Mr. Devlies during the debates). Some of the Royal Decrees will also have to be notified to the European Commission.
France: final adoption of law postponed
The French National Assembly voted on the online gaming bill on its first reading on 13 October 2009. The bill passed with a majority of 302 votes against 206.
As expected, President Sarkozy's UMP centre right party voted in favour, while the Socialist, Communist and Green parties voted against. The bill has now been sent to the Senate for further examination. It should be noted that the UMP and its allies also holds the majority of seats in the Senate, which gives the bill a strong chance of approval.
The text adopted by the National Assembly maintains the tax rates as they were presented in the first version of the draft: 8.5% for sports betting, 15.5% of horse-race betting and 2% of online poker.
Despite the National Assembly passing the bill, further hearings must be held before the Senate approves the bill.
For the new framework to be operational by the start of the 2010 World Cup in June, the Senate would need to vote on the issue by February at the latest. However, the current financial crisis and the March regional election, seen as a referendum on the government's handling of public financing, may push the gambling debate to the background in the Senate.
In addition, a significant number of French MPs believe that in the wake of the bwin v Santa Casa decision, an important issue such as the monopoly of state-owned operators should not be rushed.
Germany: gambling restrictions could be lifted
On 17 October 2009, the newly formed Christian Democratic Union (CDU) and Free Democratic Party (FDP) coalition in the state of Schleswig-Holstein announced its intention to contest the German online gambling ban and introduce a new licensing system.
The leader of the coalition party in Schleswig-Holstein, Jurgen Koppelin, has already outlined the state's plans to introduce an intrastate licensing system should other German states fail to make changes to the current laws.
The 2008 ban and other provisions of the German Interstate Treaty on Gambling had led to a 30% reduction in gambling tax revenues, according to the Deutscher Lottoverband (DLV), a German gambling industry body.
The German gambling monopoly has been contested on several occasions by the European Commission and in the German courts. Currently, only horse-racing bets are permitted online in Germany. The Interstate Treaty lapses by the beginning of 2012 if the German states decide not to extend it.
Poland: Parliament Backs Gambling Shake-Up
In November 2009, the Polish parliament backed a bill that would effectively impose significant tax rises on sports betting operators and casinos as well as make slot machines illegal.
This followed Prime Minister Donald Tusk's response to a gambling corruption scandal that forced several members of his cabinet - including Poland's minister for sport - to resign following allegations that they had agreed to back away from plans to impose a new gaming tax as a result of lobbying on the part of casino operators.
Taxes on sports betting are intended to rise from 10 to 12%t. Furthermore, all gaming machines would be restricted to licensed casinos under the future regime.
The legislation now requires only the signature of President Lech Kaczynski to become law.
This regulatory development is likely to impact on Poland's gambling sector significantly.
Combating Underage Gambling
The UK's major bookmakers have made "considerable progress" in stopping underage gamblers betting in their shops, according to a survey by the Gambling Commission published on 3 December 2009.
The Commission met with the five major bookmakers, accounting for around 80% of betting shops, after the nationwide survey showed that in test purchase visits, two-thirds refused to allow an under-18 tester to place a bet. This was a significant improvement on the most recent figures released in May.
The Gambling Commission is undertaking a rolling programme of test purchase visits to determine that adequate and effective controls are in place to prevent under age gambling across the UK.
New Sports Betting Integrity Panel
The new Sports Betting Integrity Panel that reports to the UK Government recommended this month that a single unit should be created to investigate corruption in sports betting. The review panel, headed by former Liverpool FC chief executive Rick Parry, consists of representatives from the betting industry, the police, players, fans, sports governing bodies, the legal profession and the Gambling Commission.
Creating a single integrity unit with investigative powers was said to be the only appropriate response to the growing threat. It has not be decided yet if the new unit will be housed within the Gambling Commission or established as a standalone unit based on the British Horseracing Authority's operation.
The Panel is tasked with assessing current sports betting rules to ensure that they remain robust, as well as working towards what they see as a need for improved communications between sportspeople and those tackling sports betting corruption.
New OPAP management
On 30 December 2009, OPAP S.A elected a new Board of Directors. Mr. Charis Stamatopoulos, former president of the Athens International Airport, was elected president. Mr. Ioannis Spanoudakis, former Managing Director of the Athens 2004 Olympics Organising Committee, was elected OPAP Chief Executive. The new management of OPAP has to face three major issues: the expansion to new markets abroad, the battle against illegal betting in Greece and the modernisation of its offer. The new management has already met with the Minister of Culture who controls the organisation and received clear guidelines for the first steps. One of the guidelines is to cut wages that are above market average along with their own.