EC eyeing Sweden, Germany net gambling laws

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The European Commission is taking another step into the online gambling restrictions imposed in Germany and Sweden.

The Commission announced today it has decided to send Germany and Sweden official requests for information on national legislation restricting the supply of gambling services, and for restrictions on the promotion of gambling services as well in Sweden.

In Germany's case, the EC wants to verify whether the online gambling ban recently implemented in the nation is compatible with Articles 43, 49 and 56 of the EC Treaty.

Some of the key restrictions that the EC is questioning in terms of their compatibility with the EC Treaty's Internal Market provision are:

  • The total prohibition of games of chance on the Internet - notably sports betting, which the Commission already sent Germany a detailed opinion on in March 2007
  • Advertising restrictions on TV, on the Internet or on jerseys or billboards
  • The prohibition on financial institutions to process and execute payments relating to unauthorized games of chance

"In addition, questions are raised regarding the authorization regime to be granted to intermediaries as well as the criminal sanctions or administrative fines provided for in cases of organization, advertising and participation in online games of chance," said the EC in a press release.

The EC also noted that in Germany horse race betting on the Internet is not prohibited, and slot machines have been widely expanded. Advertising of games of chance by mail, in the press and on radio is also still permitted.

The European Court of Justice has previously stated that any restrictions which seek to further general-interest objectives, such as the protection of consumers, are permitted but must be consistent and systematic in how they seek to limit activities.

"A Member State cannot invoke the need to restrict its citizens' access to these services if at the same time it encourages them to participate in State games of chance," the EC said in the press release.

The EC's action on the German online gambling ban comes just one month after it was activated Jan. 1, 2008.

"By commencing these broad proceedings only 30 days after the treaty entered into force, the Commission shows its determination to fight restrictions and in particular prohibitions, which are not backed by genuine consumer protection or public order interests," said Sigrid Ligné, European Gaming and Betting Association secretary general.

The EC's decision to inquire into the German online gambling laws is based on complaints raised by the EGBA and a number of service providers and on information gathered by Commission staff. Germany has two months to respond to the inquiry.

In Sweden's case, the EC is inquiring about the nation's online gambling laws to verify whether all national measures relating to poker games and tournaments are consistent and compatible with Article 49 of the EC Treaty, which guarantees the free movement of services.

"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," the EC said.

"However, the national legislation prevents online poker games and tournaments offered by operators licensed and regulated in other Member States."

The EC also pointed out that the legislation 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 organized within licensed premises in another member state.

As is the case with Germany, stakeholders have raised concerns, because a member state can't invoke the need to restrict its citizens' access to betting services while at the same time encouraging them to participate in state lotteries, games of chance or betting which benefits the state's finances.

Sweden has two months to respond to the EC's inquiry. In both Germany's and Sweden's case, the EC said it hopes the answer it receives from their respective representatives will lead to an early and satisfactory resolution to the matter.

"This decision is an important development for EU-licensed operators as it confirms the support of the Commission to guarantee our members' right to a fair market access both for sports betting and poker services," Ligné said.

"This decisive action against the German Interstate Treaty and Swedish poker monopoly sends a clear message to all EU countries maintaining or instigating antiquated protectionist gaming regulations. We applaud the commencement of infringement procedures and encourage the Commission to extend these proceedings against other countries that are also contravening EU law."

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