European Commission’s detailed opinion on the French bill regarding the opening of the remote gambling market

The European Commission has urged France to review the bill regarding the opening of the French remote gambling market.

Following the notification of the French bill regarding the opening of the remote gambling market, the European Commission rendered a detailed opinion on the 8 of June, 2009.

The French authorities are urged to clarify and amend some of the provisions of the bill in order to ensure the bill’s compatibility with European law.

* The first objection relates to article 16 of the bill and the system put in place for issuing licences. According to the Commission, this rule restricts the freedom to provide services (Art 49 EC Treaty). To be compatible with European law the French authorities are requested to clarify to which extend they will take into account the requirements of the legal system under which the operator is already licensed (country of origin).
* The second objection pertains to Article 52 of the bill which provides for an obligation for all licensed operators to obtain consent from the operating right owner of the sport event. According to the Commission, such a requirement could constitute a restriction to the freedom to provide services, as the betting offer would become less attractive.
* The third remark questions the justification of article 8 of the bill: French Government has to prove the necessity of this restriction. According to this provision, a maximum payback ratio is foreseen, whereby the Commission considers this might constitute an infringement to the freedom to provide services. In this respect, the French authorities are urged to adduce evidence concerning the link between the rate of return and fight against addiction.
* The last objection is related to article 39 of the bill which states for an obligation to have a fiscal representative established in France. This might constitute a restriction to the freedom to provide services, even despite the argumentation given by the French Government according to which this disposition is meant to ensure an effective fiscal supervision. Such an argumentation is not accepted (see Commission v. France judgement C-334/02) considering that such an obligation is disproportionate and can be replaced by a less restrictive measure.

This opinion obliges France to postpone the adoption of the law for one additional month. The new deadline ends on the 8 of July.

If the French Government does not modify the bill by the 8 of July, 2009 or ignores the EC opinion, it takes the risk that the Commission decides to launch an infringement procedure.

Discriminatory practices against EU operators highlighted

The European Union has urged the United States to open talks on scrapping the ban on foreign online gambling companies.

The Commission has issued a report that finds U.S. laws on Internet gambling are legally not justified and are discriminatory against foreign Internet gambling operators.

The European Commission’s investigation found that US’ laws on remote gambling and their enforcement against EU companies constituted an unacceptable trade barrier that put it in breach of WTO rules.

The European Commission report, instigated by a Trade Barrier Regulation complaint filed by the Remote Gambling Association (RGA), concludes that the treatment of foreign Internet gambling operators by the U.S. under existing domestic law constitutes a barrier to market access for European companies. Further, the report found that the U.S. is in violation of international trade law by threatening and pursuing criminal prosecutions, forfeitures and other enforcement actions against foreign Internet gambling operators, while allowing U.S. online gambling operators, primarily horse betting, to flourish.

Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative, said that the Obama Administration should seek to forge a new direction on Internet gambling, rather than keeping in place a protectionist trade policy that hypocritically discriminates against foreign online gambling operators.

It added that legislation recently introduced by Rep. Barney Frank (D-MA), the Internet Gambling Regulation, Consumer Protection and Enforcement Act (H.R. 2267), would resolve this trade dispute by regulating Internet gambling and creating a level playing field among domestic and foreign Internet gambling operators.

The legislation also mandates a number of significant consumer protections including safeguards against compulsive and underage gambling, money laundering, fraud and identify theft.

According to a report filed by AP, the EU says it could seek compensation from the World Trade Organization because the 2006 ban unfairly prevents foreign Internet gambling sites from operating in the United States. But it said it would hold off launching legal action until it had the chance to negotiate a solution with President Barack Obama’s administration.

Italy to open remote gambling sector: report

The Italian government has reportedly initiated a drive to further liberate the country’s remote gambling sector by framing new legislation extending licensing to online poker cash games, casino games, betting exchanges and betting on virtual events.

According to a report filed by Recentpoker.com, the goal is to submit the proposed laws to the European Commission within the next few months in the hopes of having the law in place by the end of 2009. The development has been attributed to the head of remote gaming at regulator Amministrazione autonoma dei monopoli dei Stato (AAMS), Francesco Rodano.

According to another report filed by eGaming Review, the failure to block unlicensed gaming sites and the reconstruction of the Abruzzo region devastated by a major earthquake in April this year are the two reasons behind the Italian government’s push to license online poker cash games, casino games, betting exchanges and betting on virtual events in the next few months. Italy has had a list of sites blocked by the major Internet service providers since it started licensing online poker tournament games and fixed odds sports betting nearly two years ago. However, according to Rodano, a quick search for information was all it took for players to get around the block.

EC seeks changes in France’s draft law

The European Commission has responded to the French Government’s notification of draft law, which allows for a “controlled opening” of the French market for online gambling.

The Commission has asked for the clarification and modification of several points in France’s draft law for opening up online gambling to competition.

The reply questioned the legality, under EU law, of the French government’s intention to impose regulations as part of their licensing system, if EU based private online gambling operators are already under similar regulations in other jurisdictions.

French Budget Minister Eric Woerth said his ministry will supply additional information on the way in which the future regulator created by the law will verify criteria already applied to operators with licenses to operate in other E.U. member states. Woerth also said the ministry will supply analysis regarding the necessity of imposing a limit on the maximum proportion of bets paid back to players.

According to the Remote Gambling Association (RGA), the Commission also questioned the limitation on pay-outs for online gambling operators, including potentially raising the point that no evidence has been offered on the link between pay-out and the propensity to gamble, and that the actual policy is severely contradicted by the French policy on minimum payouts for slot machines.

The Association further stated that it expects amendment in the French Government’s law in order to take into account the failings of the draft bill in terms of EU law.

“We understand the French government’s desire to control their gambling markets, but the measures contemplated in the draft bill were not just about EU law, they also failed to create a viable market,” said Clive Hawkswood, chief executive of the RGA.

Discriminatory practices against EU operators highlighted

The European Union has urged the United States to open talks on scrapping the ban on foreign online gambling companies.

The Commission has issued a report that finds U.S. laws on Internet gambling are legally not justified and are discriminatory against foreign Internet gambling operators.

The European Commission’s investigation found that US’ laws on remote gambling and their enforcement against EU companies constituted an unacceptable trade barrier that put it in breach of WTO rules.

The European Commission report, instigated by a Trade Barrier Regulation complaint filed by the Remote Gambling Association (RGA), concludes that the treatment of foreign Internet gambling operators by the U.S. under existing domestic law constitutes a barrier to market access for European companies. Further, the report found that the U.S. is in violation of international trade law by threatening and pursuing criminal prosecutions, forfeitures and other enforcement actions against foreign Internet gambling operators, while allowing U.S. online gambling operators, primarily horse betting, to flourish.

Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative, said that the Obama Administration should seek to forge a new direction on Internet gambling, rather than keeping in place a protectionist trade policy that hypocritically discriminates against foreign online gambling operators.

It added that legislation recently introduced by Rep. Barney Frank (D-MA), the Internet Gambling Regulation, Consumer Protection and Enforcement Act (H.R. 2267), would resolve this trade dispute by regulating Internet gambling and creating a level playing field among domestic and foreign Internet gambling operators.

The legislation also mandates a number of significant consumer protections including safeguards against compulsive and underage gambling, money laundering, fraud and identify theft.

According to a report filed by AP, the EU says it could seek compensation from the World Trade Organization because the 2006 ban unfairly prevents foreign Internet gambling sites from operating in the United States. But it said it would hold off launching legal action until it had the chance to negotiate a solution with President Barack Obama’s administration.