European Commissioner plans immediate Steps to open Gambling Markets

Rechtsanwalt Dr. Wulf Hambach

Hambach & Hambach Rechtsanwälte
Haimhauser Str. 1
D - 80802 München
Tel.: +49 89 389975-50
Fax: +49 89 389975-60
A report by RA Dr. Wulf Hambach and Sarah Madden, Hambach & Hambach

As a result of the plenary vote on the 1st reading of the EU Framework Services Directive, which took place in the European Parliament on the 16th of February 2006, gambling is no longer contained in the Directive. It is now more likely that countries will be forced to recognize that current European law already permits cross-border gambling within the EU, ultimately through European Court of Justice rulings and infringement proceedings by the Commission.

When it was initiated in January 2004, the scope of the Services Directive did cover gambling but with an ultimate implementation date of 2010. The current proposal may be a somewhat „watered down“ version of the original Directive but the reality of reaching a broad consensus had to be faced – this consensus now excludes the service of gambling from the scope of the Directive. The Commission will now take on board amendments adopted by the European Parliament by a large majority and will hopefully come forward with a revised proposal, with a view to a common position from Council by the end of April. However, the Commission does consider this date optimistic.

At a talk on globalization by EU Commissioner for Internal Market and Services Charlie McCreevy in Dublin on the 23rd of February 2006, the Commissioner said that the Directive, as initiated, was never going to go through. In its present form, it will take significant time for the Directive to become law and some risk remains that it may not. It is, however, as suggested in Betting Law News 07/05, highly unlikely that gambling will come back within its scope. In both the EU sub-committees and the working groups, nearly every member state wanted gambling excluded.

As a result of this, McCreevy is fairly certain that gambling will not be in the next proposal nor will it come within its scope in 2010.

There have been a series of gambling judgments by the European Court of Justice concerning gambling, the most renowned of which is Gambelli. With the exception of Ireland and the United Kingdom, there are major restrictions in the gambling sectors throughout Europe – Most member states are subject to a state monopoly on gambling services. As a result of the ECJ decisions, member states are entitled on public policy grounds to restrict gambling but can now no longer promote their services while preventing anyone else accessing their markets.

As reported in Betting Law News 06/05 and 07/05, the Commission has received a number of infringement complaints against member states using restrictive policies on gambling to shut off their markets (Sweden, Hungary, Finland, Denmark, the Netherlands, Germany and others).

Commissioner McCreevy has stated that the implementation of infringement proceedings against those non-compliant member states is imminent.

This is consistent with the view previously expressed by Swedish MP Christofer Fjellner that the Commission will have no other choice than to launch these infringement proceedings following the Parliament vote to exclude gambling from the Framework Services Directive.

Although the exclusion of gambling from the Services Directive superficially appears to support restrictive practices by state monopolies, in practice, it is likely to result in more immediate regulation of the industry through direct action from the Commission.