This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
There remains a varied and fragmented approach to the regulation of online gambling across EU Member States and while an increasing number of EU countries are individually reviewing their gambling laws, the challenges faced by both consumers and operators cannot be resolved by individual countries acting alone. There remains scope for a pan-European review of online gambling regulation given the industry's inherent cross-border nature, with consumers opting to use sites outside of their national borders, although the trend has instead been for increasing individual country regulation.
For several years now online gambling operators have voiced a need for harmonisation across the gambling regulation of EU member states. What may appear to be small differences in the approach to regulation can result in duplication of compliance measures and the need for operators to spend time and resource on significant technical changes to their systems. From a consumer point of view, the different approaches to online gambling regulation do not necessarily increase their protection and they may benefit from resources being more efficiently deployed.
In 2012 the European Commission Communication "Towards a comprehensive European framework for online gambling" identified administrative cooperation between regulatory authorities in the EU countries as an area warranting attention. More recently the Commission published a study focusing on the role of regulators for online gambling, which encourages Member States to engage in the sharing of information and best practice to promote greater consistency across EU territories.
One example of the information sharing solution stems from the lack of commonality in the licence application procedures for each Member State, and the fact that operators frequently have to go through the separate and lengthy procedures of each Member State when wishing to operate in multiple EU jurisdictions. The European Commission has proposed that Member States who have already licensed an operator in their territory could issue a certificate of good standing to the regulator in another Member State to which an operator has applied for a licence. This would signify that the operator has met the regulatory requirements of the issuing territory. This approach would benefit both the operator and the regulatory authorities,who would avoid duplicating effort and be able to focus resources elsewhere.
Technology is central to a gambling operator's business and is expensive to commission and run. Having the correct technology in place to remain compliant with regulations is a costly exercise for operators, made more complicated and expensive by the need to accommodate the regulations of each Member State. The European Commission has proposed that Member States share information regarding technical standards and their implementation, as well as providing information on testing methods and recognised standards. Member States may also benefit by contributing to and maintaining a directory of approved testing houses across the EU/EEA.
The Commission has flagged a range of other data sharing initiatives that may help the industry. These include regulatory authorities agreeing to share information when an event triggers an inspection or audit, and informing authorities in other Member States when an operator is whitelisted or blacklisted. Member States are also being encouraged to share information on players, such as information on users that have voluntarily self-excluded (subject to data protection safeguards) and to exchange best practice information in relation to player complaint handling systems and procedures. It has also been suggested that authorities could share information where there has been an unusually high level of complaints about one particular site or operator that is licensed in multiple Member States.
While these recommendations are sound and some Member States may choose to adopt some of them, in order for information sharing to be successful it requires the buy-in of multiple regulatory authorities and an equal flow of information being exchanged. Although these proposals are a step in the right direction, we are still a very long way off a harmonised EU regulatory framework.
