Will there be uniform regulation of igaming in the EU?

It is with no small sense of irony that I sit in London this week, writing about the potential for greater harmonisation of trading policy across the European Union (EU).

Nonetheless, it is an issue high on the agenda of the Brussels-based European Gaming and Betting Association (EGBA) and, despite what may be unfolding on my own doorstep, the ramifications for gaming operators across the continent are interesting.

The EGBA has long argued that igaming should be part of the digital single market (DSM), suggesting that a more uniform approach across the EU would enhance player protections. But the trade body rarely publicises the benefits that would provide to its members, who include giants of the online gambling industry such as Bet365, Betsson, GVC Holdings, Kindred, and Zeal. One can only assume those companies, in exchange for enhancing player protection, would be grateful for the opportunity to trade freely across the EU without encountering any of the regulatory pitfalls that at present threaten to befall them.

Kindred, for example, can testify to the challenges posed by EU states that prohibit igaming products offered by anyone other than their monopoly operators. For much of this year, with help from the EGBA, the operator has been defending its right to operate a number of sites under its Trannel International brand, after Lottstift, the Norwegian Gaming Authority, accused it of illegally targeting Norwegian players.

Separately, Kindred has filed a lawsuit against the Norwegian Ministry of Culture, taking umbrage against Norway’s decision to close a legal loophole that allowed advertising by foreign operators. The crux of the operator’s argument is that as a regulated entity – albeit regulated in another part of the EU – it should be free to trade without risk of sanctions from a different regulator.

Last month, a court in Oslo ruled against the EGBA on claims regarding two blocked payments, stating that there was sufficient basis in Norwegian law for the country’s banks to block transactions to operators licensed outside of Norway. However, a third claim by the trade body is still being assessed. That one relates to whether it is legal to block such payments under EU law, which it argues defends the freedom to provide services across the European Economic Area.

The EGBA has made clear it is sceptical about Norway’s motivations. The EGBA’s secretary general Maarten Haijer commented last month: “We believe payment blocking measures are being enforced by the Norwegian authorities to ensure the survival of the country’s gambling monopoly.

“A more fundamental rethink of Norway’s gambling regime is needed and we continue to advocate for a highly-regulated and safe online betting regulation which follows the example of Sweden and other European countries.”

The Norwegian case feeds into arguments the EGBA has been making since late last year, when it stepped up its attempts to convince the European Commission to introduce a common rulebook for igaming across the DSM. It commissioned a report, published by City University London, which found that Denmark was the only country fully meeting standards, introduced by EU in 2014, for consumer protection in igaming.

The report highlighted that the EU had no plans for further harmonisation of the rules and implied that such a stance posed unnecessary risk to consumers. “The legal regulation of online gambling and their practical interpretations continue to substantially diverge between member states exposing online players to varied levels of protection”, the report argued.

The report broke down the various conflicting policies across EU member states, including differences in how players’ identities were verified, the ways that minors were protected, and how self-exclusion policies were operated in each jurisdiction. It noted that Norway only permits online gambling through its monopoly operators Norsk Tipping and Norsk Rikstoto (although this is set to change) and that Ireland and Slovakia were yet to set any regulations for the industry.

Last week the EU parliament’s Internal Market and Consumer Protection Committee was presented with research suggesting that the inclusion of igaming in the DSM could save EU consumers and businesses €5.6bn per year. The study argued the potential benefits would come from addressing gaps in consumer protection and reducing the number of players betting with operators entirely outside the jurisdiction of the EU.

Responding to the study on 4 September, Haijer said: “Introducing a single set of rules for online betting in the EU makes perfect sense – it would improve the regulation of the sector, save significant money for both consumers and companies and help better protect consumers. That is why EGBA is calling on EU policymakers to ensure that the digital single market benefits the 12 million Europeans who bet online.”

There is weight to the argument for a unified approach, but it is difficult to imagine that EU member states – particularly those with monopolistic regimes – will readily jump at the chance to waive their sovereignty over gambling laws. It is here that the outcome of the EGBA’s efforts in the Norwegian courts are of particular interest. If the EGBA can establish a legal precedent enabling free trade by online operators across all EU jurisdictions, the case for standardised regulatory policy will become more compelling.

In the short-term the EGBA may have to compromise on a move towards greater take up of the EU’s 2014 recommendations for best practice, which would at the very least start to offer more consistent player protections across Europe and set a general standard for any future policy making.

Meanwhile, back in Blighty, talk of the EU remains contentious. And in these uncertain times, discussing increased EU (centralized) regulations is imprudent, so I doubt we’ll see the UK Gambling Commission wade into this debate any time soon.