MAGAZINE OF THE EUROPEAN LOTTERIES, 2011, SEPTEMBER ...

GAMBLING TECHNOLOGIES
Gambling Technology is a fundamental
topic today, especially in the light of
the ongoing debate in the EU. Various
notifications by Member States
refer to IT aspects while also the EU
Commission Green Paper consultation
on the sector of online gambling is
paying a particular attention to it.
The actual debate on gambling
technologies is driven by the way
technology is used in a proper regulated
environment in order to avoid the abuse
of the principles of the Internal Market.
Technology is often used to circumvent
the principles of Internal Market rules,
to avoid taxation and the application of
anti-money laundering rules.
In this regard, Advocate General P.
Mengozzi, in its Opinion in the Stoß
case, has highlighted the existence
of some practises which do not allow
mutual trust between the EU Member
States (i.e. off-shore licenses) and
therefore result as a violation of Internal
Market rules.
P. Mengozzi clarifies that the
application of the principle of mutual
recognition presumes a certain balance
to be found between the different
conditions imposed in the Member
States. Consequently, the Member
State in which the service is provided
cannot impose on the operator the
same conditions and controls to which
he was already subject in his country of
origin.
According to AG P. Mengozzi,
extraterritorial licenses do not fulfil
these conditions. Since the authorities
of the country of origin do not allow the
provision of gambling services within
their territory, it cannot be argued that
the general interest objectives pursued
by another Member State are already
sufficiently protected.
The Court of Justice did reject in several
cases the possibility in the current
status of EU law the application of the
mutual recognition. According to the
Court “a Member State is therefore
entitled to take the view that the mere
fact that an operator such as Bwin
lawfully offers services in that sector via
the Internet in another Member State,
in which it is established and where it is
in principle already subject to statutory
conditions and controls on the part of
the competent authorities in that State,
cannot be regarded as amounting to
a sufficient assurance that national
consumers will be protected against the
risks of fraud and crime, in the light of
the difficulties liable to be encountered
in such a context by the authorities of
the Member State of establishment in
assessing the professional qualities and
integrity of operators.”
It is clear that this does also apply to the
technology requirements which vary
among the different Member States.
Member States do rightly believe
that, in order to be able to uphold a
proportionate and consistent gambling
policy technology, means used should
be subject to regular inspections and
controls. This requirement is also
foreseen in the Third Anti-Money
Laundering Directive. Various systems
are currently explored from a full
(operational) server approach to a
frontal system or a portal under control
of the regulator. All those system
are complemented by ISP and other
blocking mechanisms to assist with the
enforcement of the licensing regime.
In the Dickinger case the question of
mutual recognition and the difficulties
LEGAL
Philippe Vlaemminck
18 NEWS 37 SEPTEMBER 2011
relating to controls by the country of
origin were again debated.
In its opinion AG Bot expressed a rather
critical view towards Malta regarding
the abuse of Internal Market rules.
According to Bot, Member States can
impose strict requirements, including
having a social seat within the territory
of that Member State and a server to
properly track and control the online
gaming operations, in order to ensure a
strict and more efficient control by the
government of the operator’s policy.
Consumer protection emerges here
as the main issue in the debate. The
absence of cooperation between
Member States and of certain common
IT standards creates some specific risks.
In practice, self exclusions systems set
up by a Member State, remain without
effect in other Member States.
More in general, a lack of understanding
about technology can be detected,
including at the level of the EU
Commission.