Each European state traditionally had its own legislation for online gambling (many still do), but the formation of the European Union (EU) created uncertainty for online punters. The EU has specific legislation guaranteeing free, fair competition between companies of member states, and these rules apply to non-EU companies wishing to trade in the EU. Theoretically, online gambling is completely legal within the EU. However, online betting has been an extremely contentious issue. The EU has had to deal with a host of challenges from companies attempting to operate within other EU states. EU members can enact their own laws to prohibit access to foreign online gambling. There are currently 10 EU members, among them France and Germany, who have introduced restrictive laws to protect their own state monopolies.
France

All forms of online gambling are illegal in France, which is in direct violation of EU free competition directives. France has defended its legal position vigorously, arresting visiting executives of foreign online gambling companies. However, France cannot remain in contravention of EU law indefinitely and change is imminent. In 2008, France announced that it was working on new legislation to safely open up the online gambling market.
Germany

Online gambling is also illegal in Germany. A total ban prohibits all online casino games, sports betting and bingo. The government can order German Internet service providers to block customers` access to gambling sites and prevent banks from doing business with online betting firms. Purportedly to safeguard Germans from the “hazards” of online betting, this legislation conveniently protects the state-controlled gambling monopoly.

Several online betting firms have commenced legal challenges. Online Australian operator, B-win Interactive, has already lost two actions against Germany. However, the European Commission can sue member states to ensure compliance and B-win will continue to appeal, in the belief that the threat of serious sanctions will force Germany to comply with EU online gambling directives.

Responsible Sports Betting

Responsible betting is crucial. A “professional” punter, known to your author, recently lost thousands playing the Euro 2008 betting odds, exhausting his betting bank and a lot more besides.The majority of online layers are committed to promoting responsible wagering as well as encouraging recognition of problem gambling. Many online bookmakers have incorporated tools into their websites to prevent problem gambling. These include limits on daily and / or monthly spending, self-exclusion tools and protection against underage access. Help and advice on responsible sports betting can be found at www.gambleaware.co.uk.

The press release says :

“(…) the previous instances had held that the prohibition of illegal gambling, enforced by penalties, does not violate European Community law nor German Constitutional Law. (…) The Bundesgerichtshof has not assented to this evaluation. The landmark decision by the Bundesverfassungsgericht (Federal Constitutional Court) dated 28 March 2006 (1 BvR 1054/01) is said to mean that the state betting monopoly in Germany, in the legal and actual form it had taken during the decisive period of time before 28 March 2006, represented a disproportionate interference with the freedom of profession of persons interested in professional activities of this kind, this therefore being inconsistent with Art. 12 paragraph 1 GG (Grundgesetz – German Constitution). At the same time, it represented an unjustified restriction of the freedom of establishment and the free movement of services guaranteed under Art. 43 and 49 EC. Due to the state betting monopoly’s inconsistency with the Constitution and with Community law during the period of time before the judgment of the Bundesverfassungsgericht on 28 March 2006, Section 284 StGB (Strafgesetzbuch – German Criminal Code) could not be applied to the offering of sports bets in the cases to be decided here, where acts carried out in the years 2003 to 2005 are to be considered (so-called “old cases”).”

Gaminglaw.eu comes with more details and explains :

This means that, while the BGH in the “Schöner Wetten” decision in 2004 expressly demanded a German betting licence in order to exclude the applicability of Section 284 StGB, it now abandons this principle and turns to Community law.

Thus, if the new state treaty on gambling also violated Community law, an EU licence would be sufficient to exclude the applicability of Section 284 StGB, and thus a violation of competition.Â

what if I say AC Milan ?

Via casinowire

The Civil Court of First Instance in France has ruled that Unibet and William Hill were guilty of “counterfeiting” when they used the trademarked word “Juventus” on their websites in either comments or slogans to promote their betting action.

Both companies have been ordered to pay a €1 fine to Juventus as a token and €10,000 in legal fees each.

The court ruled that if the online sports betting operators are permitted to use brand names of sports teams to advertise games for which they are offering bets, this must be strictly limited to being used only when a bet is being placed.

Unibet’s mrbookmaker.com website carried a French slogan which translates as:

“Two giants of European football meet Tuesday night at 8.45pm. Real Madrid with its nine UEFA champions league victories will receive Juventus from Turin. This will be a special game for French player Zinedine Zidan who played in the Italian colours before joining the Spanish team.”

Both operators expressly denied trying to use the name as a brand and implied that their intention was only to inform what betting options were available.

This new inquiry focuses on a number of provisions of the new legislation which entered into force on 1.1.2008. Some of the key restrictions that are questioned in terms of their compatibility with the EC Treaty’s Internal Market provisions are as follows: the total prohibition of games of chance on the Internet; notably sports betting, on which the Commission sent to Germany in March 2007 a detailed opinion; advertising restrictions on TV, on the Internet or on jerseys or billboards; and the prohibition on financial institutions to process and execute payments relating to unauthorised games of chance. In addition, questions are raised regarding the authorisation regime to be granted to intermediaries as well as the criminal sanctions or administrative fines provided for in cases of organisation, advertising and participation in on-line games of chance.

However, it should be noted that in Germany horse race betting on the Internet is not prohibited and slot machines have been widely expanded. Moreover, advertising of games of chance by mail, in the press and on radio is still permitted.

Sweden joined Germany on the chopping block for similar problems :
The European Commission has decided to send an official request for information on national legislation restricting the supply and promotion of certain gambling services to Sweden. In April 2006 the Commission sent a similar request for information to Sweden concerning sports betting (IP/06/436). In this new case the Commission wishes to verify whether all national measures relating to poker games and tournaments are consistent and therefore compatible with Article 49 of the EC Treaty, which guarantees the free movement of services. The Commission’s decision relates only to the compatibility of the national measures in question with existing EU law. It does not touch upon the existence of monopolies as such, or on national lotteries. Nor does it have any implications for the liberalisation of the market for gambling services generally, or for the entitlement of Member States to seek to protect the general interest, so long as this is done in a manner consistent with EU law i.e. that any measures are necessary, proportionate and non-discriminatory. The letter of formal notice is the first step in an infringement procedure under Article 226 of the EC Treaty. Sweden has two months in which to respond. The Commission hopes that the answer it receives will lead to an early and satisfactory resolution of the matter.

This latest inquiry into Swedish national gambling restrictions focuses on various issues relating to poker games and tournaments.

Poker games and tournaments are today offered in Swedish international casinos and, since 2006, the state-owned company also offers such services online on a large scale. However, the national legislation prevents online poker games and tournaments offered by operators licensed and regulated in other Member States. Also, it provides for restrictions and criminal sanctions on the promotion both of online poker offered by a licensed service provider in another Member State, and of poker organised within licensed premises in another Member State.

Is the main result of these decisions the fact that Italian market is open for every new competitor ? Well, things are more complicated than it seems – Simon Banks has an interesting article that describes the present situation :

The liberalization of European gambling markets is proving long and somewhat tortuous as state monopolies struggle desperately to hang on to their privileged positions, despite the European Court of Justice consistently ruling in favor of operators trying to break into potentially lucrative markets. … Nowhere has the process been more fractious than in Italy, where two landmark rulings by the ECJ appear to have finally persuaded the Italian authorities that a system of licensing and regulating foreign operators is preferable to attempting prohibition.

(…)

With a relaxation of the regulatory regime thanks to pressure from Brussels, the Italian market would appear ripe for exploitation. However, an understanding of the Italian market and sports betting culture will be crucial for any operator seeking to take advantage of developments. While European operators, with their sports betting expertise, are leading the first wave of new entrants to the Italian market, it will probably be casino companies that will profit in the long term if, as expected, Italy eventually opens up its gaming market as it has its wagering market.

Moreover, the Commission says it wasn’t informed properly.  The online gambling market regulation seems one of the few areas in the economy where the EU members states seem to play hide-and-seek with the Commission..

“The Commission is expected to open a new legal action with a letter of formal notice against Germany over the new law and could well drop the old legal action it started last year,” the gaming industry source said.

EU Internal Market Commissioner Charlie McCreevy wants to crack down on hurdles to cross-border competition in services, a core part of the 27-country European Union’s single market. McCreevy started a legal action against Germany last year over its gaming laws.

The European Gaming and Betting Association said the German ban directly contravened EU law on the free movement of services and urged the Commission to take swift action.

McCreevy has launched proceedings against about 10 EU countries for stifling competition in their gaming or lottery sectors. He has drawn support from several rulings by the European Court of Justice, the bloc’s top court.

 “After careful assessment of their representations against the published criteria, the Secretary of State has also decided not to white list Kahnawake (Canadian reservation) or Antigua.”

That means that now gambling operators licensed in European Economic Area countries, which include Gibraltar and Malta, as well as those in Alderney, Isle of Man and now Tasmania can lawfully advertise gambling in the UK.

 His report could lead to a change in the Finland’s gambling law in 2008 and 2009, but also to comply with the EC decisions, although other seem to undermine it :

 Here are some important ides of his report :

In his white paper, Professor Määttä suggests that it could be impossible to regulate foreign online gambling companies serving Finland, but says that gambling problems could be reduced by making it difficult for such companies to offer services there.

Professor Määttä offers three ways in which the government could achieve this:

 The first would be to restrict the flow of funds to and from foreign gambling providers. The second would be to require internet service providers to block access to foreign gambling sites. The third would be to give consumers a legal right to recover their losses from foreign gambling sites if they were deemed illegal.

On the question of whether Finland would offer state-controlled online gambling in the event of foreign operators being banned, Mr. Paaso was unequivocal. “There will be no opportunities. The government will not offer something like the Swedish online poker site. It does not seem right, on the one hand offering online poker to your citizens, and on the other hand blocking others from doing the same.”

The decision, although it is not a final one, was praised by EGBA :

EGBA welcomes the decision of the Court of Appeal of Versailles, which relies on the consistent jurisprudence of the ECJ and in particular the Placanica ruling of 6 March 2007. This decision is in line with the ruling of the Cour de Cassation, France’s Supreme Court, in the Zeturf case of 10 July 2007, with which it is fully in line. The French Supreme Court quashed a decision of the Court of Appeal which condemned private operator Zeturf in proceedings brought by the PMU.

Sigrid Ligné, Secretary General of the EGBA comments: “We are delighted with this decision. It is an important one and comes in the general context of the commitment taken by the French authorities to propose a controlled opening of the French gaming market by March 2008.”

The Commission has adopted on 28 December 2007 a Guidance document for online and offline casions on how they shoudl comply with the new UK regulation – Anti-Money Laundering Regulations (AML), which come into effect on 15 December 2007, and the Proceeds of Crime Act (POCA).

This document is a must read for casinos – not only for the ones in UK - The Prevention of Money Laundering and Combating the Financing of Terrorism. Guidance for remote and non-remote casinos. Guidance to remote and non-remote casinos concerning their responsibilities under the Money Laundering Regulations, which came into effect on 15 December 2007, and the Proceeds of Crime Act.

The document also received seven answers during the period of public consultation, that are also available online.