IMGL Magazine: The future of online gambling regulation in the EU: From fragmentation to functional governance

EFFECTIVE HARMONIZATION IN EUROPEAN GAMBLING REGULATION MAY BE CLOSER THAN IT
SEEMS ARGUE WULF HAMBACH, STEFANIE FUCHS-RAICHER , AND CHRISTINA KIRICHENKO

Europe’s patchwork of regulation has long been a
bugbear of licensed operators. They point to the
unjustified cost and friction of doing business across
27 member states who each insist on creating their own
legal environment. Harmonization seems like a political and
practical impossibility, but is that actually the case?

Experience across diverse sectors shows that top-down
legal harmonization in the European Union (“EU”) is often
necessary, but it is neither sufficient for, nor the sole driver of,
meaningful convergence. This article explores the possibility
of a viable path towards harmonization for the EU’s online
gambling industry which may lie in incremental, bottom-up
functional convergence. By examining successes and failures
of EU harmonization efforts in other regulated industries, the
authors argue for a gambling law harmonization model based
on mutual collaboration, technical standards, third-party
conformity assessments, and market-facing clarity.

Introduction
The European experience across regulated industries
shows that regulatory harmonization rarely succeeds
through top-down political acts alone. Although single, top
down legislation has recently gained more popularity as
a harmonization tool, the maximum harmonization often
develops through incremental convergence that combines
law, implementing instruments, technical standards, and,
most importantly, coordinated supervision and enforcement.
This would suggest that legal harmonization is necessary
but insufficient. Convergence only becomes effective when
supervisory expectations, enforcement practices, and
operational standards and interpretations are aligned.
Otherwise, even highly harmonized legal frameworks can
magnify significant differences in national regulatory culture.

This realization is equally critical for the online gambling
industry, as full legal harmonization from “above” is neither
politically nor legally realistic, given the wide national
discretion over moral policy, public health, fiscal interests,
and enforcement efforts. Simultaneously, continuous reliance
on national rules in a borderless online market has already
proven ineffective. The most viable path for the gambling
industry is therefore incremental, functional convergence.
This involves building a shared technical and operational
understanding before even attempting to build a shared
political one.

Read the whole article here.