European Commission Releases Internet Gambling Action Plan

Today the European Commission released an action plan for internet gambling in the European Union. (EU) The plan contains a series of initiatives to clarify the regulation of internet gambling and encouraging cooperation between member states. Internet gambling is one of the fastest growing sectors in the EU. Figures show an annual growth rate of about 15%. Estimates show that by 2015 internet gambling in the EU could generate an estimated 13 billion Euros. The commission has adopted an action plan because internet gambling services are widely available in the EU and the economic significance of the internet gambling sector continues to grow.

So far the process has been largely independent from the level of restrictions imposed on the industry by some member nations. By 2008 four out of five of the largest European internet gambling markets were characterized by highly restrictive environments. Germany, Italy France and Sweden have regulations in place to protect state monopolies. In recent years the EU’s top court has heard cases brought by several internet gambling operators including Bwin.Party digital entertainment Plc (BPTY), Ladbrokes Plc (LAD) and Betfair Ltd. (BET). The companies are asking the court to decide whether it is legal for state monopolies to ban them from operating. The companies also say there are unjustified national restrictions on cross border internet gambling.

The Commission has received complaints from internet gaming companies about market access denial in 20 member states. Nations justify the bans saying they are necessary to protect citizens from gambling addiction, fraud and crime. Michel Barnier, the EU’s financial services chief, said that EU efforts to remove market barriers must not conflict with consumer protection and law enforcement objectives. Barnier also told reporters “Consumers, but more broadly all citizens must be adequately protected, money laundering and fraud must be prevented, sport must be safeguarded against betting-related match-fixing and national rules must comply with EU law. These are the objectives of the action plan we have adopted today.”

Online technology is developing at an astounding pace and includes distribution channels like the internet, mobile phone technology or digital TV. Internet gambling services can operate across borders and in many cases is beyond the control of member states. The European Commission hopes to address consumer protections and cross border gaming operations. An increasing number of EU nations have started a review of their national online gambling regulations and restrictions and it is hoped that EU members can achieve common ground on internet gambling regulation.

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