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On on-line gambling in the European Union

poker-159973Broadly speaking there are currently two models of national regulatory framework applied in the field of gambling in EU: one based on licensed operators providing services within a strictly regulated framework and the other on a strictly controlled monopoly (state owned or otherwise). These two models co-existed within the internal market given the relatively limited possibilities of selling gambling services across borders in the past.

The online gambling market is the fastest growing segment of the overall gambling market, with annual revenues in excess of € 6,16bn in 2008 (There is limited data available for on-line gambling. These figures provided by H2 Gambling Capital, are estimates primarily based on public information provided by regulators, monopolies and companies. Further guidance and data have also been supplied on a confidential basis. H2 Gambling Capital has also assessed the Member States serviced by operators where not primary information is available). Thus monopolies have often been authorized to develop on-line activities and certain Member States with monopoly regimes have gradually opted for an opening of their on-line gambling and betting market. It is important to note that sports betting as against other forms of gambling in certain national regulatory regimes are subject to relatively lighter licensing regimes. In summary, the development of internet and the increased supply of on-line gambling services have made it more difficult for the different national regulatory models to co-exist.

The challenges posed by the co-existence of differing regulatory models is illustrated by the number of preliminary rulings in this area as well as by the development of significant so called “grey”(The notion of “grey” market is often used to describe a factual or legal situation in the context of EU law (regarding for instance, i.a., the parallel imports of goods). Here it is used to describe markets consisting of operators duly licensed in one or more Member States providing on-line gambling services in other Member States without having obtained an authorization to do so under the corresponding national legislation. In contrast, illegal or black markets are used to describe markets on which unlicensed operators seek to provide on-line gambling services.) and illegal on-line markets across the Member States. Enforcement of national rules is facing many challenges, raising the issue of a possible need for enhanced administrative co-operation between competent national authorities, or for other types of action. Furthermore, out of 14,823 active gambling sites in Europe more than 85% operated without any licence (Cyber-criminality in Online Gaming, White Paper by CERT-LEXSI, (Laboratoire d’Expertise en Securite Informatique), July 2006).

Credit © European Union

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