DLA Piper at European Responsible Gaming Day

by DLA Piper
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On November 28,  a round table on the role of the European Union in online gambling was organized by the European Gaming and Betting Association (EGBA) during the sixth Responsible Gaming Day in Brussels.

Patrick Van Eecke, partner at the Brussels’ IPT department of DLA Piper and member of DLA Piper’s Gambling team recaps some of his statements made at the round table in Brussels.

Moderated by Jacki Davis, table representatives were:

  • Claire Bury (DG Internal Market, EC)
  • Christofer Fjellner (MEP, EPP, Sweden)
  • Benjamin Jansen ( Deputy Director, Dutch Ministry of Justice and Security)
  • Henrik Tjärnström (CEO, Unibet)
  • Andrew Beveridge (CEO, eCOGRA)
  • Simon Holliday (Director, H2 Gambling Capital)
  • Philippe Vlaemminck (Partner, Altius)
  • Thaer Sabri (CEO, Electronic Money Association)
  • Simon Moores (Managing Director, Zentelligence Ltd)
  •  Maarten Haijer (Secretary General, EGBA), and
  • Patrick Van Eecke (Partner, DLA Piper)

Several topics were discussed, including market developments over the past months, key challenges facing operators, industry and regulators and which direction Europe should take after the European Commission’s action plan and several European Parliament reports. 

Commission official Claire Bury, Director for Internal Market and Services at the European Commission shared her insights on the implementation of the European Commission’s action plan on online gambling to date and the policy actions that are in the pipeline in 2014.

Henrik Tjärnström, CEO of Unibet and board member of the EGBA, mentioned that: “The big challenge facing the EU, Member States and the licensed industry alike is how to make sure that regulation is capable of channeling consumers to safe and attractive online gambling products.”

Any significant developments in the online gambling market?

With respect to market developments during the past 12 months, Patrick Van Eecke mentioned that a strong tendency to consolidation on several levels has taken place due to ever increasing regulatory burdens and tax initiatives.

First, smaller players in the market regrouped in order to face these regulatory and other challenges. Secondly, due to the same reasons, big players absorbed some smaller players in the market. A third consolidation wave identified was that land based operators and online operators started partnering increasing the convergence between off line and online gaming. A last consolidation activity we saw happening in the European market, is that US operators are more and more interested in acquiring or entering into commercial partnerships with local operators. As a result we may expect to see less gambling operators being active on the European market, but they will be bigger and will operate on a cross border level.

Are online gambling operators acting in compliance with consumer protection, data protection and other e-commerce related laws?

Patrick mentioned that online gaming and gambling operators seem to take into account general legal compliance issues (e.g. consumer and data protection regulations), even more seriously than traditional market players. The reason for this is that online operators indeed tend to comply with these rules as some of them may feel that they are being watched closely by the authorities, and wish to at least exclude that their operations can be challenged on legal compliance issues.

In an environment where there still seems to be much legal uncertainty on allowing the operations as such, these firms seem not to take any chance that non-compliance with legal requirements could be raised to question their conduct.

Can the online gambling market learn from any initiatives in other online industries?

On the question whether the online gaming and gambling industry could learn something from other industries, Patrick mentioned the example of the content industry. Indeed, the music and film industry has been confronted for several years with the distribution of illegal content to consumers. By providing a legal, user-friendly and cost-effective alternative, the content industry has however been able to turn a majority of the consumers to a well-controlled, secure and legally compliant provision of legal content.

Pulling consumers out of a grey zone into a fully regulated environment has shown that this industry can more easily offer certain standards to consumers (e.g. security-wise) and innovate further which increases competition.

Are there any new developments in the online gambling industry policy makers should be aware of?

Patrick mentioned that new fields of attention are the already much debated social gaming industry. Belgium for example is taking a leading role by introducing draft legislation on social gaming.

Further, and less debated, Patrick also mentioned peer-to-peer gaming and betting services which should get on the radar screen of not only the operators but also the regulators. As P2P initiatives in the financial sector, such as peer to peer lending, are becoming more popular, we may expect peer to peer gaming and gambling platforms to come into play as well. Interesting to note is that where peer to peer lending has until recently not been regulated, some jurisdictions like the UK have taken regulatory initiatives.

Regulators should be aware of these new developments and take them into account when issuing legislation.

The way forward?

Responding on the question how the future European online gambling market should be regulated,  Patrick noted that it remains remarkable how gaming and gambling services are looked upon as a completely different and special sector. Without in any way denying that there are certain risks involved in the offering of these services (addiction, fraud, etc.), risks are also connected with other services which are harmonized on a European level (see e.g. financial services but even the use of children’s toys). The question should therefore be asked whether it is logical to maintain in the long term that gaming and gambling remain excluded from the scope of legal instruments that could easily also be applicable to these services (e.g. see the recent exclusion of gambling services from the scope of the Consumer Protection Directive 2011/83; see also the exclusion in article 1, 5 (d), 3rd dash of the eCommerce Directive 2000/31).

Patrick therefore advocated a stepped approach where Member States, on a voluntary basis, could join a list of Member States recognizing the licensing conditions of other Member States, as such establishing a mutual recognition between licenses issued by these States. Patrick referred to the draft eID and Trust Services Regulation, where Member States also agreed on the principle of trusted lists of operators in the area of identification and electronic authentication, areas which are traditionally also in the domain of the national legislator.

A “Eurozone” of trusted and licensed online gambling operators, providing services in line with stringent but transparent common criteria would enhance the internal market of regulated online gambling services, and would subscribe to the principles of the European Digital Agenda.

 

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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