European Debate on Gambling
26 Jun 2008
Countries such as Germany, Sweden, Greece, Netherlands and Hungary, to name just a few, are currently being put under increasing pressure as their national laws continue to confine the gaming industry in a state monopoly. The European Commission has issued infringement proceedings against these States to force them to open up their markets.
In Greece for example the Commission is concerned by the fact that providers lawfully licensed in another Member State are not allowed to provide sports betting services and other games of chance. Restrictions also extend to the promotion or advertising of the services and to whether Greek nationals can participate in the games. The Infringement proceeding is based on article 226 of the EC Treaty and is a legal mechanism or option given to the Commission to ensure that Community law is correctly applied.
When a member state fails to comply with community law, or fails to transpose community law into national legislation within the given time; the European Commission has the power to try and bring the infringement to an end and, if need be, refer the case to the European Court justice. Lobby groups across Europe and the world are rallying together to push these states to start making their gaming markets open to competition and place them under the rule of the market economy. Some success has already been achieved as France announced that it will be issuing betting and gambling license to legitimate operators as the mid 2009, and it looks as if Poland will do the same, following a press statement in April from the finance ministry that it will be legalizing online betting. Further success has also been noted in the Netherlands, after the Senate voted down a law which would extended the monopoly of Holland Casino, a state own company running the gaming industry in the Netherlands, to online gambling.
There is a lot going on in the EU on the issue, but it comes down to the essential question of whether state monopoly on gambling can still be justified by the social protection argument. Are these governments truly trying to protect their society from the vice of gambling, and can only the government ensure a moral and responsible environment for gambling?
Continental European thought on this issue follows their traditional argument- regulation, regulation, and more regulation. What these governments fail to realize is that a market economy does not develop in complete anarchy, and the industry has a commercial interest in keeping Gambling safe in the public sphere and they support any code of best practice and conduct. The current initiative on responsible gambling declarations are a prime example of the industry promoting a clean betting environment. European States have overstretched their argument that concentrating gambling in state monopolies ensures consumers protection, reduces levels of problem gambling and prevents criminal activities. This is simply not the case. State betting monopolies have evolved into very large business enterprises that do not serve the common good any more than any other private company. They have become a significant player in the market economy and function as any other business; only with the distinct advantage that legislation ensures that they maintain an absolute monopoly over the sector. Furthermore they are moving into other business sectors, such as online gambling and are expanding into foreign markets.
Therefore protectionist policies by Member States, ensures their hegemony in the local market, and limits their risk when expanding and diversifying, as seen in the Greek and Dutch case. Private companies are at a distinct disadvantage when competing against State monopolies. This results in a distortion of competition, which is the very basis of the European market economy. The existence of these regimes need to be considered as a violation of European law and a specific breach of Article 49 of the ECT which guarantees the right to free movement of services, one of the 4 fundamental freedoms of Europe. This over regulation also cradles the consumer and robs him his freedom to choose.
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