Norbert Teufelberger: egaming regulation - the only way is up

ON 8 SEPTEMBER THE European Court of Justice (ECJ) published its judgement in the preliminary ruling proceedings in the case between Bwin and Liga Portuguesa de Futebol Profissional versus the Portuguese monopoly Santa Casa da Misericórdia de Lisboa. In these proceedings, the ECJ assessed whether the Portuguese sports betting and lottery monopoly and its extension to include the internet was compliant with EU law.

In particular, the ECJ examined “whether the freedom to provide services precludes the Portuguese legislation in so far as the latter prohibits operators such as Bwin, established in other member states where they lawfully provide similar services, from offering games of chance via the internet in Portugal.”

The ruling was very specific to the Portuguese situation and the ECJ did not decide on the legality of Santa Casa’s monopoly but only rejected an automatic mutual recognition. Therefore, the consequences of the judgement are limited and the ECJ judgement also has no effect on previous rulings such as Gambelli or Placanica.

The judgement also cannot be generalised to serve as a precedent for future ECJ rulings on gaming, including on the legality of monopolies and prohibitions of other member states. It should not have any impact in other member states as a result.

The statement contained in the ruling that bricks-and-mortar betting and gaming are better suited for customer protection or fraud control is absurd. The reality is that the internet warrants greater security than land-based gaming because of the audit trail and transparency made possible by digital distribution channels: highest security standards can be met to warrant customer protection and fraud control in particular.

As founding member of the European Gaming and Betting Association (EGBA), Bwin helped develop the compulsory Code of Conduct for private online gaming providers. This code stipulates strict controls which, given the transparency of the internet, have proven more efficient in the internet than in traditional land-based gaming and, in particular, conclusively prevent any type of fraud. The European Sports Association (ESSA), whose efforts also serve to prevent betting manipulation, has successfully been able to implement this.

Once again the need for a contemporary regulation of online gaming becomes clear. A legal vacuum exists in the European gaming sector because of the rapid pace of technological progress. Among other things, this is borne out by over a dozen preliminary ruling proceedings still pending before the ECJ as well as numerous infringement proceedings against EU member states.

Court rulings will not be able to fill in for a regulation in the medium and long run. It is now widely recognised that online gaming is a market reality and that there is an urgent need to develop a legal framework in tune with the times to warrant the interest of consumers, the state and operators. As a consequence we are seeing an unprecedented trend towards regulation and away from prohibition: for example Italy has recently further expanded the scope of its licences, France is preparing for an opening of the market, and Denmark and Spain are planning to introduce regulation for online gaming.

It is also encouraging to see that initiatives to repeal the Unlawful Internet Gambling Enforcement Act are gathering momentum in the US. There is no doubt in my mind that the future looks bright for responsible online gaming operators

Bwin co-chief executive Manfred Bodner is speaking at EGR Live, eGaming Review‘s free-to-attend conference and exhibition for operators next month. This article first appeared in the October issue of eGaming Review.

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