GREEN PAPER On on-line gambling in the Internal Market
Date: 2011-03-24
Institutions: European Commission
Subjects: Internet, administrative check, consumer protection, domestic market, game of chance, gaming establishment, public order

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EUROPEAN COMMISSION 

Brussels, 24.3.2011 
COM(2011) 128 final 

GREEN PAPER 

On on-line gambling in the Internal Market  

SEC(2011) 321 final 

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TABLE OF CONTENTS 

GREEN PAPER on on-line gambling in the Internal Market.................................................... 3 

1. 

1.1. 

1.2. 

2. 

2.1. 

2.2. 

2.3. 

Regulating on-line gambling in the EU: Recent developments and current challenges 
from the Internal Market standpoint ............................................................................ 6 

Purpose of the consultation .......................................................................................... 6 

On-line gambling in the EU: current situation............................................................. 8 

Key policy issues subject to the present consultation ................................................ 13 

Definition and organisation of on-line gambling services ......................................... 13 

Related services performed and/or used by on-line gambling services providers ..... 16 

Public interest objectives............................................................................................ 19 

2.3.1.  Consumer protection .................................................................................................. 19 

2.3.2.  Public order ................................................................................................................ 26 

2.3.3.  Financing of benevolent and public interest activities as well as events on which on-

line sports betting relies ............................................................................................. 29 

2.4. 

Enforcement and related matters................................................................................ 33 

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GREEN PAPER 

On on-line gambling in the Internal Market 

The purpose of this Green paper is to launch an extensive public consultation on all relevant 
public  policy  challenges  and  possible  Internal  Market  issues  resulting  from  the  rapid 
development of both licit and unauthorised on-line gambling offers directed at citizens located 
in the EU.  

Broadly speaking there are currently two models of national regulatory framework applied in 
the  field  of  gambling:  one  based  on  licensed  operators  providing  services  within  a  strictly 
regulated  framework  and  the  other  on  a  strictly  controlled  monopoly  (state  owned  or 
otherwise).  These  two  models  co-existed  within  the  internal  market  given  the  relatively 
limited possibilities of selling gambling services across borders in the past.  

The online gambling market is the fastest growing segment of the overall gambling market, 
with  annual  revenues  in  excess  of  € 6,16bn  in  2008 1.  Thus  monopolies  have  often  been 
authorised  to  develop  on-line  activities  and  certain  Member  States2  with  monopoly  regimes 
have  gradually  opted  for  an  opening  of  their  on-line  gambling  and  betting  market.  It  is 
important  to  note  that  sports  betting  as  against  other  forms  of  gambling  in  certain  national 
regulatory  regimes  are  subject  to  relatively  lighter  licensing  regimes.  In  summary,  the 
development of internet and the increased supply of on-line gambling services have made it 
more difficult for the different national regulatory models to co-exist. 

The challenges posed by the co-existence of differing regulatory models is illustrated by the 
number  of  preliminary  rulings  in  this  area  as  well  as  by  the  development  of  significant  so-
called "grey"3 and illegal on-line markets across the Member States. Enforcement of national 
rules  is  facing  many  challenges,  raising  the  issue  of  a  possible  need  for  enhanced 
administrative  co-operation  between  competent  national  authorities,  or  for  other  types  of 
action. Furthermore, out of 14,823 active gambling sites in Europe more than 85% operated 
without any licence4. 

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For 

information 

There is limited data available for on-line gambling. These figures provided by H2 Gambling Capital, 
are estimates primarily based on public information provided by regulators, monopolies and companies. 
Further guidance and data have also been supplied on a confidential basis (2008 figures). H2 Gambling 
Capital  has  also  assessed  the  Member  States  serviced  by  operators  where  not  primary  information  is 
available. 
these 
detailed 
more 
figures:http://ec.europa.eu/internal_market/services/gambling_en.htm 
The Commission is aware that certain on-line gambling services are regulated for at a regional level in a 
number of Member States. However, for reasons of simplicity, this Green paper only refers to "Member 
States" or "national". 
The notion of "grey" market is often used to describe a factual or legal situation in the context of EU 
law (regarding for instance, i.a., the parallel imports of goods). For the purpose of this consultation, it is 
used to describe markets consisting of operators duly licensed in one or more Member States providing 
on-line  gambling  services  in  other  Member  States  without  having  obtained  an  authorisation  to  do  so 
under  the  corresponding  national  legislation.  In  contrast, illegal  or  black  markets are  used  to  describe 
markets on which unlicensed operators seek to provide on-line gambling services. 
Cyber-criminality  in  Online  Gaming,  White  Paper  by  CERT-LEXSI,  (Laboratoire  d'Expertise  en 
Securite Informatique), July 2006. http://www.lexsi.com/telecharger/gambling_cybercrime_2006.pdf. 

on 

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In  view  of  the  self-evident  cross-border  impact  of  this  on-line  gambling  service  growth  in 
both its legal and unauthorised  dimension, as well  as  of  its  nexus  with  many  issues  already 
dealt  with  by  EU  legislation,  it  is  the  Commission’s  intention  to  exhaust  a  number  of 
questions related to the effects of, and to the possible public policy responses to, this growth 
in on-line gambling activity in order to have a full picture of the existing situation, to facilitate 
the  exchange  of  best  practices  between  Member  States  and  to  determine  if  the  differing 
national regulatory models for gambling can continue to coexist and whether specific action 
may  be  needed  in  the  EU  for  that  purpose.  This  consultation  also  responds  to  a  series  of 
Presidency  conclusions  (2008-2010)  and  to  the  resolution  of  the  European  Parliament  on 
integrity in on-line gambling (2009).  

The Commission launches this consultation with an open mind in that it does not prejudice the 
conclusions  to  be  subsequently  drawn  as  to  the  necessity  to  take  action,  the  form  of  such 
action,  as  appropriate,  and  the  level  at  which  such  action  should  be  taken.  Its  fundamental 
purpose  is  to  collect  the  facts,  assess  the  stakes  and  to  gather  the  views  of  all  interested 
stakeholders on a phenomenon that has multiple dimensions. 

Comments  are  invited  on  all  or  some  aspects  of  the  document.  Specific  questions  are  listed 
after each section.  

The  consultation  and  the  questions  asked  in  this  document  focus  primarily  on  on-line 
gambling, and issues linked to the free movement of services (Article 56 TFEU), due to the 
well  developed  cross-border  supply  of  such  services.  However,  although  this  consultation 
does not focus on the freedom of establishment (Article 49 TFEU) a number of questions may 
also  be  of  direct  relevance  for  other  gambling  services  (offered  in  "bricks-and-mortar" 
establishments).  The  Commission  would  also  like  to  stress  that,  in  the  absence  of 
harmonisation  in  the  field,  it  is  for  each  Member  State  to  determine  in  those  areas,  in 
accordance with its own scale of values, what is required in order to ensure that the interests 
in question are protected, in line with the subsidiarity principle. 

A staff working document accompanying this Green paper is available on the Commission's 
website: http://ec.europa.eu/internal_market/services/gambling_en.htm  

This staff working document provides interested parties with additional information relating 
to  the  stakeholders  involved  and  their  interests,  the  size  of  the  on-line  gambling  market, 
secondary  legislation,  jurisprudence  and  the  notification  of  national  legislation  under 
Directive 98/34/EC laying down a procedure for the provision of information in the field of 
technical standards and regulations. 

Member States, the European Parliament, the European Economic and Social Committee and 
all other interested parties are invited to submit their views on the suggestions set out in this 
Green  Paper.  Contributions  should  be  sent  to  one  of  the  following  addresses  to  reach  the 
Commission by 31 July 2011 at the latest:  

markt-gambling@ec.europa.eu  

European Commission 
DG Internal Market and Services 
[J-59 08/061] 
Rue de la Loi 200 
B-1049 

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Contributions  will  be  published  on  the  internet.  It  is  important  to  read  the  specific  privacy 
statement  attached  to  this  Green  Paper5  for  information  on  how  personal  data  and 
contributions  will  be  dealt  with.  The  Commission  asks  organisations  who  wish  to  submit 
comments in the context of public consultations to provide the Commission and the public at 
large with information about whom and what they represent. If an organisation decides not to 
provide this information, it is the Commission's stated policy to list the contribution as part of 
the 
(Consultation  Standards,  see  COM(2002)  704,  and 
Communication on ETI Follow-up, see COM(2007) 127 of 21.3.2007)  

individual  contributions. 

In  addition,  the  Commission  intends  to  organise  consultations  of  national  authorities  and 
targeted stakeholder meetings and expert workshops. In follow-up to this Green Paper and on 
the basis of the conclusions drawn from the results of this consultation, the Commission will 
consider the next steps to be taken. 

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1. 

REGULATING  ON-LINE  GAMBLING  IN  THE  EU:  RECENT  DEVELOPMENTS  AND 
CURRENT CHALLENGES FROM THE INTERNAL MARKET STANDPOINT 

1.1. 

Purpose of the consultation 

This  Green  paper  is  launching  a  public  consultation  on  the  regulation  of  on-line  gambling 
services in the Internal Market. It seeks to canvass views from all interested parties in order to 
get  a  better  understanding  of  the  specific  issues  arising  from  the  development  of  both  legal 
and  "unauthorised"  offers  of  on-line  gambling  services  directed  at  consumers  located  in  the 
EU.  The  consultation  aims  at  collecting  information  on  the  existence  and  extent  of  societal 
and public order risks associated with this activity. It furthermore seeks contributions on the 
regulatory  and  technical  means  Member  States  use  or  could  use  to  ensure  consumer 
protection, the preservation of public order or other public interests, and their effectiveness, in 
view of the need for a proportionate, systematic and coherent application of their policy vis-à-
vis  on-line  gambling.  Finally,  the  consultation  should  help  identify  if  the  current  rules 
applicable to on-line gambling services at EU level are fit to ensure the overall coexistence of 
the  national  systems  and  determine  if  greater  cooperation  at  EU  level  might  help  Member 
States to achieve more effectively the objectives of their gambling policy. 

Today  on-line  gambling  services  are  widely  offered  and  used  in  the  EU  and  the  economic 
significance of the sector is growing. The on-line offer is the fastest growing segment of the 
gambling market, accounting for 7.5% of the annual revenues of the overall gambling market 
in  2008,  and  it  is  expected  to  double  in  size  by  2013.  At  the  same  time,  the  regulatory 
framework  applicable  to  gambling  differs  significantly  across  Member  States.  While  some 
Member  States  restrict  or  even  ban  the  offer  of  certain  games  of  chance,  others  have  more 
open markets. Many Member States have also recently reviewed their gambling legislation or 
are in the process of doing so in view of the growth of on-line gambling services.  

The advent of the internet and the rapid growth of on-line gambling opportunities combined 
with  the  considerably  differing  national  regulations  have  resulted  not  only  in  an  increasing 
legal  offer  of  gambling  services  in  certain  Member  States  but  also  in  the  development  of  a 
significant  unauthorised  cross-border  market.  This  consists  of  both  a  black  market  (with 
unlicensed  clandestine  betting  and  gaming,  including  from  third  countries)  and  a  so-called 
"grey"  market  (operators  duly  licensed  in  one  or  more  Member  States  promoting  and/or 
providing  gambling  services  to  citizens  in  other  Member  States  without  having  obtained  a 
specific  authorisation  in  those  countries).  This  unauthorised  cross-border  market  remains 
accessible to consumers, due either to de facto tolerance or lack of effective enforcement, and 
adds  to  the  legal  national  offers  that  are  available  to  consumers  depending  on  the  legal 
situation prevailing in the Member States where they are located.  

Since July 2008, Member States have, within a Council Working Party on Establishment and 
Services,  discussed  matters  of  common  interest  in  relation  to  the  gambling  sector. 
Consecutive Presidencies have asked for the European Commission's active participation and 
detailed  consultations.  The  French  Presidency  suggested  in  20086  that  the  Commission  ,  in 
due course, should consider the possibility to make proposals to identify ways forward. The 
Swedish  Presidency  encouraged  the  European  Commission  to  engage  in  the  work  on  this 

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Presidency progress report, presented on 1 December 2008 (doc ref 16022/08). 

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topic to address gambling responsibility7 and the Spanish Presidency invited the Commission 
to initiate consultations with the stakeholders and the Member States in view of EU actions in 
this field8. Most recently, under the Belgian Presidency, all Member States agreed on Council 
conclusions  that  welcome  a  broad  consultation  by  the  European  Commission  on  online 
gambling in the internal market which will allow for an in-depth discussion on issues raised 
by on-line gambling services in particular. These conclusions, adopted on 10 December 20109 
also addressed cooperation between regulatory authorities and noted that the Internal Market 
Information  system  could  become  a  useful  tool  in  order  to  facilitate  this  administrative 
cooperation.  

This Green paper also responds to the resolution of the European Parliament adopted on 10 
March  2009  that  called  on  the  Commission  to  study,  in  close  cooperation  with  national 
governments,  the  economic  and  non-economic  effects  of  the  provision  of  cross-border 
gambling services in relation to a wide range of issues10.  

Under EU law, as confirmed by the CJEU, gambling services fall under Article 56 TFEU and 
are thus covered by the rules on the provision of services. According to these rules, operators 
authorised  in  one  Member  State  may  provide  their  services  to  consumers  in  other  Member 
States, unless those impose restrictions justified by overriding reasons in the public interest, 
such as consumer protection or the general need to preserve public order. The Member States' 
overall policy vis-à-vis on-line gambling must be proportionate and be applied in a consistent 
and  systematic  manner.  Moreover,  such  restrictions  must  also  be  consistent  with  EU 
secondary  legislation:  although  gambling  services  are  not  regulated  by  sector-specific 
regulation  at  EU  level  and  excluded  from  horizontal  acts  such  as  the  Services  Directive 
(2006/123/EC)  or  the  E-commerce  Directive  (2000/31/EC),  they  are  subject  to  a  number  of 
rules in EU secondary legislation11. 

In view of recent trends, restrictions imposed to online gambling by each Member State can 
be  expected  to  continue  to  vary  considerably,  with  the  effect  that  what  is,  or  will  become, 
considered a legal offer in one Member State will continue to be deemed “unlawful” (in that it 
has  not  been  implicitly  or  explicitly  authorised)  in  the  territory  of  another  Member  State.  It 
follows  that,  subject  to  the  legal  conditions  set  out  above,  effective  enforcement  will  be 
essential to ensure the achievement of the objectives of a Member State's gambling policy. 

The  Commission’s  objective  is  to  contribute,  through  this  consultation  and  building  on  the 
active  involvement  of  the  Member  States,  the  Council  and  the  European  Parliament,  to  the 
emergence  in  the  Member  States  of  a  legal  framework  for  on-line  gambling  providing  for 
greater  legal  certainty  for  all  stakeholders.  The  consultation  should  embrace  all  the  relevant 
public interest objectives that this activity touches on and allow for the  identification of the 
best  possible  ways  to  reconcile  them  with  the  Internal Market principles.  At the end  of this 
process and in light of the responses received, the Commission will report on what appears to 
be the most appropriate follow-up.  

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Presidency progress report, presented on 3 December 2009, (doc ref 16571/09). 
Presidency progress report, presented on 25 May 2010, (doc ref 9495/10). 
Conclusions  on  the  framework  for  gambling  and  betting  in  the  EU  Member  States,  adopted  at  the 
3057th Competitiveness Council meeting, Brussels, 10 December 2010. Council document 16884/10. 
The resolution followed the SCHALDEMOSE report. See European Parliament resolution of 10 March 
2009  on  the  integrity  of  online  gambling  (2008/2215(INI));  P6-2009-0097.  These  issues  include 
advertising  and  marketing  and  under  age  people  (p  29),  fraud  and  criminal  behaviour  (p.  30)  and 
integrity, social responsibility, consumer protection and taxation (p. 31). 
See section 1.2: subsection "EU secondary legislation relevant to on-line gambling". 

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1.2. 

On-line gambling in the EU: current situation 

Main features of the on-line gaming industry operating in the EU 

In 2008, the annual revenues generated by the gambling service sector, measured on the basis 
of  Gross  Gaming  Revenues  (GGR)  (i.e.  stakes  less  prizes  but  including  bonuses),  were 
estimated to be € 75,9 bn (EU 27 12), showing the economic significance of the sector. On-line 
gambling services accounted for annual revenues in excess of € 6.16 bn, 7.5% of the overall 
gambling  market.  This  on-line  market  is  the  fastest  growing  segment  and  in  2008  it  was 
expected to double in size in five years13.  

The  transmission  channels  for  on-line  gambling  services  can  be  divided  into  three  main 
categories, namely internet, mobile applications and IPTV: 

Internet  

2003 

€ 4.8 bn 

Mobile phones/ other 

€ 0.78 bn 

IPTV14 

€ 0.32 bn 

2008  

€ 5.9 bn 

€ na 

€ na 

2012 

€ 7.32 

€ 3.51 

€ 1.33 

Projected increase 

152.5% 

450.0 % 

415.6% 

Figure 1. Projected increase in three main categories of remote gambling15 

National  levels  of  demand  for  these  on-line  services  vary  across  the  Union  depending  on  a 
number of factors. In that respect it is not surprising to see that the UK is the largest market at 
the  current  time  given  that  its  e-commerce  market  is  twice  as  large  as  the  average  for  the 
Member  States16  It  is  however  interesting  to  note  that  some  of  the  largest  markets  in  2008 
were Member States characterised by the restrictive regulatory model, i.e. France, Germany, 
Italy and Sweden. 

Figure 2. Five largest national on-line gambling markets in the EU in 2008 (GGR in bn €) 17 

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H2 Gambling Capital (2008 figures).  
EGBA and H2 Gambling Capital, 2009, http://www.egba.eu/pdf/EGBA_FS_MarketReality.pdf  
Internet Protocol Television. 
SICL study, page 1407, http://ec.europa.eu/internal_market/services/gambling_en.htm  
See Report on retail Market monitoring, 5 July 2010 - COM(2010) 355. 
H2 Gambling Capital. 

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Currently internet is the most significant channel but very high rates of growth are expected 
through  the  roll  out  of  new  mobile  applications.  Five  major  categories  of  on-line  gambling 
services are offered (see Figure 3). 

Figure 3. Breakdown of the Gross Gambling Revenues by type of on-line gambling service (EU-27)18 

A  wide  range  of  stakeholders  have  an  interest  in,  or  are  affected  by,  the  provision  or 
promotion  of  on-line  gambling  services.  These 
include  citizens,  operators,  media, 
intermediaries,  sport  events  organisers,  clubs  and  associations,  good  causes  and  other 
beneficiaries19. 

As  regards  citizens,  the  market  for  gambling  (online  and  offline)  is  one  of  the  50  markets 
covered in the annual Consumer Market Monitoring Survey. The market is rated 29th out of 
50 included markets. The consumer ranking for "comparability" is relatively high, the rating 
for  "trust"  is  average  and  the  rating  for  "experienced  problems"  is  much  lower  than  the 
average. The overall rating for whether the product lived up to what the consumer expected is 
relatively low but this is perhaps to be expected given the nature of the product20. 

Questions: 

(1) 

(2) 

(3) 

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Are  you  aware  of  any  available  data  or  studies  on  the  EU  on-line  gambling 
market that would assist policy-making at EU and national level? If yes, do the 
data or study include licensed non-EU operators in the EU market? 

Are you aware of any available data or studies relating to the nature and size of 
the black market for on-line gambling services? (Unlicensed operators)  

What,  if  any,  is  your  experience  of  EU-based  on-line  gambling  operators 
licensed  in  one  or  more  Member  State  and  providing  and  promoting  their 
services in other EU Member States? What are your views on their impact on 
the corresponding markets and their consumers? 

H2 Gambling Capital. 
For a more on the stakeholders and their interests, see "Staff working document". 
Specific scores for market in specific countries (dashboards), the overall report (where gambling is dealt 
with on page 243), tables, etc. can be found at this link:  
http://ec.europa.eu/consumers/strategy/cons_satisfaction_en.htm  

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(4) 

What, if any, is your experience of licensed non-EU on-line gambling operators 
providing and promoting  their services in EU  Member States?  What are  your 
views on their impact on the EU market and on consumers? 

Online gambling under the Treaty rules  

The  regulatory  situation  for  on-line  gambling  is  characterised  by  the  fact  that  in  2006  the 
Commission, following a unanimous demand of the Council and the European Parliament in 
first  reading,  excluded  gambling  services  from  the  scope  of  its  modified  proposal  for  a 
Services directive21. As a consequence of the lack of political will to consider the adoption of 
secondary law in this sector, the focus turned to the application of primary law. A number of 
infringement  proceedings22 against  cross-border  restrictions  to  such services were processed 
as a result of the many complaints lodged with the Commission for alleged violations of the 
Treaty. As the Court of Justice of the EU (CJEU) has now developed and set out a number of 
guiding  principles,  a  significant  proportion  of  the  Member  States  against  which  the 
Commission  opened  infringement  cases  have  since  launched  national  regulatory  gambling 
reforms and more than 150 draft Acts and regulations have been notified to the Commission23. 

A study by the Commission in 200624 examining the various laws regulating on-line and off-
line gambling services'25 and their impact upon the smooth functioning of the Internal Market 
for  these  and  associated  services  presented  a  picture  of  a  very  fragmented  Internal  Market 
where Member States frequently imposed restrictions to cross-border gambling services. The 
interpretation  of  national  rules  was  not  always  clear  and  the  study  listed  almost  600  cases 
before national Courts demonstrating the significant legal uncertainty affecting the EU market 
for such services26. 

The Treaty on the functioning of the European Union (TFEU) 

Article 56 of the TFEU prohibits restrictions on the freedom to provide services to recipients 
in  other  Member  States.  In  Schindler27  the  CJEU  confirmed  for  the  first  time  that  the 
provision and use of cross-border gambling offers is an economic activity that falls within the 
scope  of  the  Treaty.  The  Court  furthermore  held  in  Gambelli28  that  services  offered  by 
electronic  means  were  covered  and  that  national  legislation  which  prohibits  operators 

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COM(2006)  160,  4.4.2006.  Currently  Article  2(2)(h)  of  the  Services  Directive  expressly  excludes 
gambling activities. 
Commission launched inquires into restrictions on sports betting services in a number of Member States 
on 4 April 2006 (IP/06/436). The Commission was criticised for not processing these complaints fast 
enough  by  the  European  ombudsman  following  a  complaint  lodged  with  his  office  by  the  European 
Parliament (Case number: 289/2005). 
151  notifications  relating  to  gambling  were  notified  to  the  Commission  under  Directive  98/34/EC 
laying  down  a  procedure  for  the  provision  of  information  in  the  field  of  technical  standards  and 
regulations (OJ L 204, 21.7.1998, p.37) (amended by Directive 98/48/EC (OJ L 217, 5.8.1998, p. 18)) 
2005 - 2010. See also: http://ec.europa.eu/enterprise/tris/index_en.htm  
Study on gambling services in the EU Internal Market, by the Swiss Institute of Comparative Law. See 
http://ec.europa.eu/internal_market/services/gambling_en.htm  
(1) lotteries, (2) betting; (3) gambling offered in casinos; (4) gambling on gambling machines that are 
placed  in  locations  other  than  licensed  casinos;  (5)  bingo;  (6)  media  gambling;  (7)  sales  promotion 
services  consisting  of  promotional  games  with  a  prize  exceeding  € 100,000  or  where  participation  is 
exclusively  linked  to  purchase;  (8)  gambling  services  operated  by  and  for  the  benefit  of  recognised 
charities and non-profit making organisations. 
587 cases, most of these cases were dealt with by German Courts.  
Case C-275/92, ECR 1994 Page I-01039. 
Case C-243/01, ECR 2003 Page I-13031. 

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established  in  a  Member  State  from  offering  on-line  gambling  services  to  consumers  in 
another Member State, or hampers the freedom to receive or to benefit as a recipient from the 
services offered by a supplier established in another Member State, constitutes a restriction on 
the freedom to provide services. 

Restrictions are only acceptable as exceptional measures expressly provided for in Articles 51 
and  52  TFEU,  or  justified,  in  accordance  with  the  case-law  of  the  Court,  for  reasons  of 
overriding  general  interest.  A  certain  number  of  reasons  of  overriding  general  interest  have 
been  recognised  by  the  Court,  such  as  the  objectives  of  consumer  protection  and  the 
prevention of both fraud and incitement to squander on gaming, as well as the general need to 
preserve public order. The reduction of tax revenue however is not one of the grounds listed 
in  Article  52  TFEU  and  does  not  constitute  a  matter  of  overriding  general  interest.  The 
recognised  societal  issues  can  all  serve  to  justify  the  need  for  national  authorities  to  have  a 
sufficient margin of discretion to determine what consumer protection and the preservation of 
public order require in terms of type of service provision offered in this field29. 

The  case-law  also  requires  that  such  service  provision  and  the  cross-border  restrictions  that 
may  result  from  the  regulatory  approach  must  bring  about  a  genuine  reduction  of  gambling 
opportunities and be applied in a consistent and systematic manner to all service offers in the 
area30.  In  so  far  as  the  authorities  of  a  Member  State  incite  and  encourage  consumers  to 
participate  in  lotteries,  games  of  chance  and  betting  to  the  financial  benefit  of  the  public 
purse, the authorities of that State cannot invoke public order concerns relating to the need to 
reduce opportunities for betting in order to justify restrictions31. Restrictions must be applied 
without  discrimination  and  be  proportionate,  i.e.  they  must  be  suitable  for  achieving  the 
objective  which  they  pursue  and  not  go  beyond  what  is  necessary  in  order  to  attain  it.  The 
procedure for the grant of a licence is bound to comply with the principles of equal treatment 
and non-discrimination and with the consequent obligation of transparency32. 

Of particular interest for this consultation is the Court's view that gambling services offered 
via the internet have several specific characteristics which enable the Member States to adopt 
measures restricting or otherwise regulating the provision of such services, in order to combat 
gambling  addiction  and  protect  consumers  against  the  risks  of  fraud  and  crime.  Those 
specificities are the following:  

(1) 

In the sector of on-line gambling, authorities of the Member State of establishment 
encounter  specific  difficulties  to  assess  the  professional  qualities  and  integrity  of 
operators. These difficulties justify that a Member State takes the view that the mere 
fact  that  an  operator  lawfully  offers  on-line  gambling  services  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 authorities of that Member State, 
cannot  be  regarded  as  amounting  to  a  sufficient  assurance  that  its  own  consumers 
will be protected against the risks of fraud and crime33; 

29 

30 
31 
32 
33 

C-275/92, ECR 1994 Page I-01039; Case C-124/97, ECR 1999 Page I-06067; Case C-67/98, ECR 1999 
Page I-07289. 
Case C-67/98, ECR 1999 Page I-07289; Case C-243/01, ECR 2003 Page I-13031. 
Case C-243/01, ECR 2003 Page I-13031. 
Case C-203/08, ECR [0000] Page I-0000.  
Case C-42/07, ECR [2009] Page I-7633, § 69, see also section 2.4 (enforcement) and question 48. 

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(2) 

(3) 

The lack of direct contact between the consumer and the on-line gambling operator 
gives  rise  to  different  and  more  substantial  risks  of  fraud  by  operators  against 
consumers compared to the traditional gambling market34; and  

The  particular  ease  and  the  permanent  access  to  on-line  gambling  services  and  the 
potentially  high  volume  and  frequency  of  such  an  international  offer,  in  an 
environment  which  is  characterised  by  isolation  of  the  player,  anonymity  and  an 
absence of social control are factors likely to develop gambling addiction and lead to 
other negative consequences (The Court also states that the internet may prove to be 
a  source  of  risks  of  a  different  kind  and  a  greater  order  in  the  area  of  consumer 
protection,  particularly  in  relation  to  young  people  and  those  with  a  propensity  for 
gambling  or  likely  to  develop  such  a  propensity,  in  comparison  with  traditional 
markets for such games)35. 

The Court developed its case-law primarily on the basis of references for preliminary rulings 
from  national  courts.  At  the  same  time  however  the  Commission  launched  a  series  of 
infringement  proceedings  against  Member  States  in  order  to  verify  on  the  basis  of  the 
jurisprudence of the Court the proportionality of restrictions implemented in Member States. 
Following  reforms  in  Member  States  the  Commission  has  already  closed  some  of  these 
cases36.  

Furthermore,  the  European  Commission  has  opened,  under  EU  state  aid  rules  (Articles  107 
and 108 TFEU), a formal investigation to examine whether lower taxes for online casinos in 
comparison to traditional casinos in Denmark are in compliance with the Treaty rules37.  

EU secondary legislation relevant to on-line gambling  

As  regards  secondary  European  law,  gambling  services  are  not  regulated  by  sector-specific 
rules at EU level but nevertheless are subject to a number of EU acts38. The following texts 
are  noteworthy  in  this  respect39:  the  Audiovisual  Media  Services  Directive40,  the  Unfair 
Commercial  Practices  Directive41,  the  Distance  Selling  Directive42,  the  Anti-Money 
Laundering  Directive43,  the  Data  Protection  Directive44,  the  Directive  on  privacy  and 
electronic communication45, and the Directive on the common system of value added tax46. In 

34 

35 

36 

37 

38 
39 
40 
41 
42 
43 
44 
45 
46 

Case C-42/07, cited above, § 70. As regards face-to-face customer identification and age verification, 
see questions 16 and 24.  
Case  C-46/08,  ECR  [0000],  Page  I-0000,  §103.  As  regards  factors  linked  to  problem  gambling,  see 
questions 17 and 19. 
See IP/10/504 (Italy) and IP/10/1597 (France). The Commission has also closed a case against Austria 
(no IP) 
Case C35/2010 - DA - Duties for online gaming in the Danish Gaming Duties Act (OJ C 22, 22.1.2011) 
and IP/19/1711. See also Staff working document Section 2.3. 
See Section 2.1 of the Staff working paper. 
For a more complete listing of EU secondary legislation, see "Staff working document". 
OJ L 95, 15.4.2010, p. 1. 
OJ L 149, 11.6.2005, p. 22. 
OJ L 144, 4.6.1997, p. 19. 
OJ L 309, 25.11.2005, p. 15. 
OJ L 281, 23.11.1995, p. 31. 
OJ L 201, 31.7.2002, p. 37. 
OJ L 347, 11.12.2006, p. 1. 

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other cases gambling services have been explicitly excluded from the scope of EU law. This 
is the case of the E-commerce Directive47 and of the Services Directive48.  

Questions: 

(5) 

(6) 

If  any,  which  are  the  legal  and/or  practical  problems  that  arise,  in  your  view, 
from  the  jurisprudence  of  national  courts  and  the  CJEU  in  the  field  of  online 
gambling? In particular, are there problems of legal certainty on your national 
and/or the EU market for such services?  

Do you consider that existing national and EU secondary law applicable to on-
line gambling services adequately regulates those services? In particular, do you 
consider  that  coherence  /  consistency  is  ensured  between,  on  one  hand,  the 
public  policy  objectives  pursued  by  Member  States  in  this  field  and,  on  the 
other hand, the national measures in force and/or the actual behaviour of public 
or private operators providing on-line gambling services?  

2. 

KEY POLICY ISSUES SUBJECT TO THE PRESENT CONSULTATION 

The  following  sections  of  this  Green  paper  examine  the  key  issues  associated  with  the 
efficient  and  fair  regulation  of  on-line  gambling  services.  These  issues,  which  may  not  be 
exhaustive, can be broken down into four main categories: conceptual/organisational, societal, 
public order and economic/good causes. 

All  considerations  and  questions  developed  hereunder  and  pertaining  to  the  organisation  or 
regulation  of  the  on-line  gambling  sector  are  without  prejudice  to  the  wide  margin  of 
appreciation left to Member States as to their regulatory approach to this activity, including as 
to the use of the revenues from gambling activities. For example, the discussion of issues such 
as  licensing  is  not  based  on  any  presumption  that  there  is  a  de  jure  obligation  on  Member 
States to allow on-line gambling or to open their markets to private operators. Member States 
remain free to determine their approach to this sector within the limits of the principles as set 
out by CJEU case law. 

2.1. 

Definition and organisation of on-line gambling services  

Definitions 

A  large  number  of  differing  gambling  services  are  covered  by  the  term  “online  gambling”. 
These  include  on-line  provision  of  sports  betting  services  (including  horse  racing),  casino 
games, spread betting, media games, promotional games, gambling services operated by and 
for  the  benefit  of  recognised  charities  and  non-profit  making  organisations  and  lottery 
services. 

Internet  (and  other  interactive  technological  platforms,  such  as  m-commerce49  or  IPTV)  are 
used  to  (a)  offer  gambling  services  to  consumers,  (b)  allow  consumers  to  bet  or  gamble 

47 
48 
49 

OJ L 178, 17.0.2000, p. 1. 
OJ L 376, 27.12.2006, p. 36 
Mobile Commerce - completed by using mobile access to computer-mediated networks with the help of 
an electronic device (for example a mobile phone). 

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against each other (e.g. betting exchanges or on-line poker) or (c) as a distribution technique 
(e.g. to purchase lottery tickets directly on-line). 

The  long-standing  definition  that  exists  for  gambling  activities  in  general  in  EU  secondary 
legislation is that relied upon to exclude such services from the e-commerce directive: 

"gambling activities ...involve wagering a stake with monetary value in games 
of chance, including lotteries and betting transactions." 

In  later  texts  such  as  the  Services  directive  and  most  recently  in  the  Audiovisual  Media 
Services  Directive  a  slightly  different  definition  is  "games  of  chance  involving  a  stake 
representing  a  sum  of  money,  including  lotteries,  betting  and  other  forms  of  gambling 
services"50. The term 'casino' is not defined in the Money laundering Directive. 

Subject to the outcome of the present consultation, it is the Commission’s preliminary view 
that the broader definition as set down in the e-commerce directive should be maintained for 
gambling  and  that  this  should  be  combined  with that  for information  society services  as set 
down in Directive 98/34/EC such that the following common definition for on-line gambling 
services should be applied as defining the scope of the current consultation: 

On-line  gambling  services  are  any  service  which  involves  wagering  a  stake 
with  monetary  value  in  games  of  chance,  including  lotteries  and  betting 
transactions  that  are  provided  at  a  distance,  by  electronic  means  and  at  the 
individual request51 of a recipient of services. 

Questions: 

(7) 

(8) 

(9) 

How  does  the  definition  of  on-line  gambling  services  above  differ  from 
definitions at national level? 

Are  gambling  services  offered  by  the  media  considered  as  games  of  chance  at 
national  level?  Is  there  a  distinction  drawn  between  promotional  games  and 
gambling?  

Are  cross-border  on-line  gambling  services  offered  in  licensed  premises 
dedicated  to  gambling  (e.g.  casinos,  gambling  halls  or  a  bookmaker's  shop)  at 
national level?  

Establishment and licensing of on-line gambling services  

According to the Court's case law under Article 49 TFEU, the concept of establishment is a 
very broad one, allowing an EU national to participate, on a stable and continuous basis, in 
the  economic  life  of  a  Member  State  other  than  his  State  of  origin  and  to  profit  from  this 

50 

51 

In a proposal for a regulation concerning sales promotions on the Internal Market - COM(2001)546 - 
the  Commission  drew  a  distinction  between  games  of  chance  and games  of skill.  This  was necessary 
due  to  differing  national  definitions  of  "chance".  Such  differences  could  also  be  explaining  differing 
national regulations of certain betting activities or poker. 
“At a distance” and "at the individual request" meaning a direct on-line request from the recipient to the 
on-line gambling operator without reliance on any intermediaries such as shop staff working at a point 
of  sale.  To  the  extent  that  the  distance  transaction  takes  place  through  a  network  of  natural  persons 
acting as intermediaries using electronic means it is not intended to be contained in the above definition. 

EN 

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market,  so  contributing  to  economic  and  social  interpenetration  within  the  Community52. 
However,  in  order  for  the  provisions  relating  to  freedom  of  establishment  to  apply,  it  is 
generally necessary to have secured a permanent presence in the host Member State53. Such a 
permanent presence could for example be an office set up to follow sport in order to set fixed 
odds or a commercial office with the objective to promote cross border gambling services or 
to provide local customer support. 

According to the e-commerce directive54, a company offering information society services is 
established where it pursues its economic activity. It is therefore neither the place where the 
technology supporting its website is located nor the place where the website is accessible. In 
cases where it is difficult to determine from which of several places of establishment a given 
service is provided, the place where the company has the centre of its activities relating to the 
particular  service  should  be  the  deciding  factor.  Since  a  company  can  use  one  or  multiple 
servers or a "cloud-based"55 infrastructure and since it can switch and relocate them within a 
very  short  period  of  time,  a  server  cannot  be  considered  a  secure  link  to  determine  the 
company's place of establishment relating to a particular on-line service.  

National laws sometimes set quantitative limits on the number of licences that may be held for 
on-line gambling services or may even ban them altogether within their jurisdictions. (E.g. a 
prohibition or a legal or de facto monopoly for one or more categories of gambling services). 
Other Member States do not set limits on the total number of licences that they may issue – a 
licence is given to any on-line operator that meets a number of conditions set out in law or 
regulations. Licences may be limited in time or granted for an undefined period. Within the 
EU, the largest number of licensed on-line gambling operators is to be found in Malta (ca 500 
licences in 2009). 

The current regulatory situation in the Member States is such that operators may be required, 
when  offering  the  same  type  of  on-line  gambling  service  (e.g.  sports  betting)  in  different 
Member States, to apply for a licence in each of these Member States. Certain Member States 
recognise licences issued in other Member States that are notified to them (white listing) and 
allow  such  licensed  providers  to  offer  their  on-line  gambling  services  into  their  territories 
without  an  additional  licence.  Others  may  take  account  of  such  licences  when  issuing  their 
own licences to such operators but impose double licensing regimes whereby each operator, 
irrespective of whether he is operating in another Member State, must be licensed within their 
territory before he can offer such services.  

Question: 

(10)  What are the main advantages/difficulties associated with the coexistence in the 
EU  of  differing  national  systems  of,  and  practices  for,  the  licensing  of  on-line 
gambling services? 

52 
53 
54 
55 

Case C-55/94, ECR 1995, Page I-4165. 
Case C-386/04, ECR 2006, Page I-8203. 
The e-commerce directive, cited in footnote 47, recital (19). 
A cloud is a platform or infrastructure that enables execution of code (services, applications etc.), in a 
managed and elastic fashion. 

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2.2. 

Related services performed and/or used by on-line gambling services providers 

A  number  of  services,  including  marketing  and  payment  services,  are  used  by  gambling 
operators  to  encourage  or  facilitate  on-line  gambling.  Some  of  these  services  are  subject  to 
secondary legislation.  

Promotion of on-line gambling – Commercial Communications 

On-line service providers use commercial communications to promote their services, related 
products and image to final consumers and/or distributors. The Commission understands that 
the following commercial communications are the most frequently used: 

(1) 

(2) 

(3) 

(4) 

(5) 

TV advertising; 

Printed press advertising; 

On-line commercial communications; 

Sales promotions; 

Direct  marketing  (which  includes  direct  mail,  primarily  by  e-mails  and  sms  to 
registered customers, for example personal follow-up contacts); and 

(6) 

Sponsorship agreements. 

The  Commission  is  aware  that,  in  many  Member  States,  there  are  restrictions  on  such 
commercial  communications  ranging  from  prohibitions  to  content  requirements  on  media 
advertising  of  on-line  gambling  services.  Whereas  the  Commission  welcomes  comments  on 
such restrictions (points (1) and (2) above) it wishes to focus its consultation on certain forms 
of commercial communications, points (3) – (6) 

– 

On-line commercial communications 

On-line  banners  and  pop-ups  on  non-gambling  sites  are  two  forms  of  internet  advertising 
intended  to  redirect  traffic  to  on-line  gambling  services.  They  therefore  appear  on  non-
gambling information society services. They do not fall under the scope of the E-commerce 
directive but fall within the scope of the Unfair Commercial Practices Directive and, in so far 
as  the  use  of  on-line  commercial  communications  includes  the  collection  and  processing  of 
personal data, the Data Protection Directive 95/46/EC and E-Privacy Directive 2002/58/EC. 

– 

Sales promotions 

Sales  promotions  cover  discounts  of  all  forms;  premium  offers,  free  gifts,  promotional 
contests and promotional games. They are an important multi-faceted tool that can be adjusted 
to  various  circumstances:  to  enter  into  markets  with  innovative  products;  to  encourage 
customer  loyalty;  to  stimulate  short-term  competitive  actions;  or  to  rapidly  respond  to  lost 
sales. One of the most common types of sales promotions are the use and communication of 
registration and deposit bonuses, i.e. where on opening a player's account a sum of money is 
paid or extra funds are added to deposits made by an already registered customer. 

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Sales  promotions  relating  to  on-line  gambling  services  are  regulated  by  the  Unfair 
Commercial Practices Directive as well as Data Protection Directive and E-Privacy Directive 
2002/58/EC. 

– 

Direct marketing 

All  on-line  gambling  operators  use  direct  marketing  strategies  (via  mail,  telephone,  Internet 
and  direct  response)  as  they  are  considered  an  essential  tool  for  companies  to  approach, 
inform  and  retain  customers,  as  well  as  providing  customer  after-sales  services.  These  are 
regulated by the Distance Selling Directive, the Unfair Commercial Practices Directive, Data 
Protection  Directive  95/46/EC  and  the  E-privacy  Directive  2002/58/EC.  Such  direct 
marketing  may  include  player-to-player  marketing  and  could  be  combined  with  sales 
promotions. 

– 

Sponsorship 

Sponsorship means any commercial agreement by which a sponsor, for the mutual benefit of 
the sponsor and sponsored party, contractually provides financing or other support in order to 
establish  an  association  between  the  sponsor's  image,  brands,  goods  or  services  and  a 
sponsorship property in return for rights to promote this association and/or for the granting of 
certain agreed direct or indirect benefits56. Sponsorship is central to on-line gambling service 
providers' marketing mix whether they are national lotteries or commercial operators.  

Question: 

(11)  With  focus  on  the  categories  mentioned  above,  how  are  commercial 
communications for (on-line) gambling services regulated for at national level? 
commercial 
there 
Are 
communications? 

specific  problems  with 

cross-border 

such 

– 

On-line payment services, pay-outs and customer identification 

Since truly effective distance micro-payment services are not yet available, on-line gambling 
operators typically require their customers to deposit funds on player accounts before playing. 
Deposits  can  be  made  by  credit  cards,  e-Wallets,  bank  transfers,  pre-paid  cards  or  cash 
transfers. 

Payment method 

Estimated percentage57 

Credit cards (including Maestro) 

E-wallets 

Bank transfers 

Prepaid cards 

64-65% 

12-14 % 

11-13% 

9-11% 

56 

57 

ICC International Code on Sponsorship (2003)  
http://www.iccwbo.org/policy/marketing/id926/index.html 
European  Commission  estimates  based  on  information  from  operators  that  accept  deposits  from 
customers who are resident in another Member State (February 2010). 

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Additional  limits  are  typically  set  by  on-line  gambling  operators,  such  as  on  deposit  and 
withdrawal levels from the player's account. Limits on withdrawals range from a fixed limit to 
the requirement for the player to contact a bank in person to withdraw larger sums from the 
player's account. 

Certain  operators  require  that  the  same  payment  method  is  used  for  both  deposits  and 
withdrawals of funds (a so-called “closed” system).  

Gambling  services  offered  over  mobile  telephony  or  IPTV  will  also  include  transmission 
charges linked to invoices for telephony services. 

Questions: 

(12) 

(13) 

Are  there  specific  national  regulations  pertaining  to  payment  systems  for  on-
line gambling services? How do you assess them? 

Are  players'  accounts  a  necessary  requirement  for  enforcement  and  player 
protection reasons? 

Customer  identification  is  necessary  for,  in  particular  the  protection  of  minors,  fraud 
prevention,  "know-your-customer"  controls  and  prevention  of  money  laundering.  Customer 
identification  may  raise  specific  Internal  Market  problems  when  the  service  provider  and 
customer are at different locations and also because of the current lack of mutual recognition 
of electronic identification and authentication across the EU58. In contrast, bricks-and-mortar 
establishments that offer games of chance will have the possibility to obtain an identity card 
and carry out a face-to-face recognition at the gambling venue. 

Today, on-line gambling service providers' customer identification is based on: 

– 

– 

– 

Previous  identifications  carried  out  by  payment  service  providers,  as  most  of  the 
payment options require that the customer has a bank account; 

Own  controls  in  view  of  information  and  documents  requested  from  the  potential 
customer; and 

Controls by verification service providers subject to compliance with obligations laid 
down by EU data protection law.  

Mystery shopping exercises of licensed operators suggest that there are very few weaknesses 
that could allow for under aged persons to gamble and withdraw winnings59. Age verification 
takes place before the new customer can start playing. It has been suggested that additional 
pay-out age verification could work as a further deterrent to minors and adolescents seeking 
to register. 

58 
59 

See also A Digital Agenda for Europe - COM(2010) 245, 19.5.2010. 
The  UK  Gambling  Commission  conducts  a  rolling  programme  of  mystery  shopping  on  gambling 
websites as part of its compliance activity, see www.gamblingcommission.gov.uk/. 

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Question:  

(14)  What  are  the  existing  national  rules  and  practices  relating  to  customer 
verification, their application to on-line gambling services and their consistency 
with  data  protection  rules?  How  do  you  assess  them?  Are  there  specific 
problems associated with customer verification in a cross-border context? 

2.3. 

Public interest objectives  

The  Commission  fully  respects  the  principle  of  subsidiarity  and  recognises  that  Member 
States  have  a  margin  of  discretion  to  protect  valid  public  interest  objectives  in  accordance 
with the Treaty.  

This  section  focuses  on  the  following  three  public  interest  objectives  which,  to  various 
degrees, may be valid for Member States in terms of their national on-line gambling policies: 
Consumer protection (2.3.1); Public order (2.3.2) and financing of what they define as public 
interest activities (2.3.3).  

2.3.1.  Consumer protection 

The evidence available to the Commission at this stage seems  to indicate that a  majority of 
players do not suffer from problem gambling. However, those that do must be fully accounted 
for given the associated social costs for the player, his or her family and society as a whole. 
All  gamblers  need  protection  against  fraudulent  services.  For  this  reason  regulators  seek  to 
ensure  that  all  games  offered  are  controlled,  fair  (i.e.  that  random  number  generators  are  in 
conformity with technical standards and in line with the rules for each game) and free from 
crime. Transparency is key. 

Problem gambling 

The need to protect players and to prevent problem gambling is invoked when restricting the 
offer of on-line gambling services to consumers. 

Problem  gambling  is  often  described  as  an  urge  to  gamble  despite  harmful  negative 
consequences or a need to stop. To assess the extent of problem gambling in the population of 
a  country,  comprehensive  surveys,  so  called  'prevalence'  studies,  are  carried  out.  The  two 
most  widely  used  screening  instruments  to  identify  problem  gamblers  are  DSM-IV60  and 
SOGS61. Depending on the responses to a list of questions, the player is defined as a problem 
gambler  (SOGS),  a  potential  pathological  gambler  (DSM-IV)  or  a  probable  pathological 
gambler (SOGS and DSM-IV), also referred to as a gambling addict (see below). 

60 

61 

Diagnostic  and  Statistical  Manual  of  Mental  Disorders,  4th  ed.  for  pathological  gambling,  American 
Psychiatric Association, 1994. A publication of the 5th edition of Diagnostic and Statistical Manual of 
Mental Disorders (DSM-V) is foreseen for May 2013. 
The South Oaks Gambling Screen, Lesieur & Blume, 1987. Both tools (DSM and SOGS) also exist in 
versions adapted to adolescents: DSM-IV-J (juvenile), DSM-IV-MR-J (multiple response-juvenile) and 
SOGS-RA (revised for adolescents). 

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The  Commission  is  aware  of  nationwide  prevalence  studies  for  problem  gambling  in  eight 
Member  States62  and  seven  more63  have  carried  out  some  studies  of  limited  scope  (either 
regional or on specific age categories, mostly adolescents). The level of problem gambling in 
the eight Member States that have carried out nationwide prevalence studies varies from 0.5% 
of the entire population in the UK to 6.5% in Estonia64. As regards the prevalence of problem 
gambling  in  the  field  of  on-line  gambling  in  the  EU,  only  four  Member  States65  provide 
nationwide  statistics,  three  others66  provide  some  partial  information  (surveys  of  limited 
scope, carried out on a certain age group or concerning only a certain type of on-line games). 

These  studies  suggest  that  the  main  factors  that  influence  problem  gambling  are  the 
following: 

(1) 

(2) 

(3) 

(4) 

(5) 

Event  frequency.  The  briefer  the  time  between  the  game  taking  place  and  the 
opportunity to place a stake the greater the risk. 

Payout interval. The time between placing of the stake and the result. The shorter this 
is the greater the risk. 

Accessibility and social environment. 

Chasing losses or being close to winning, The greater the pay-out and probability of 
winning, the greater the delusion that lost stakes can be won back and therefore the 
increased risk (this is also linked to "excitement" or "dream effect"). 

Perceived skills and “involvement”. The possibility of getting involved in the event 
being  gambled  on  and  of  using  one’s  own  skills  to  assess  the  chances  of  winning 
provide evidence of the ‘near-miss’ psychology. This strengthens the feeling that one 
is  in  control  of  the  game,  thus  increasing  the  risk.  This  includes  variation  of  the 
stake. Note that this effect may be enhanced when some element of skill rather than 
purely chance is perceived to be a characteristic of the game. 

(6) 

Commercial communications that could trigger vulnerable groups. 

In this respect different types of games or different kinds of bets might pose different risks to 
players.  For  example,  fast  pay  out  slot  machines,  scratch  cards  and  casino  games  are  often 
considered to be the most problematic in this respect. Lottery games that are run on a weekly 
basis  are  considered  less  risky  (although  suffering  from  factor  (4)  mentioned  above)  than 
those  run  on  shorter  intervals  (because  of  factors  (1)  and  (2)).  Sports  betting  and  poker  are 
considered to suffer more from the risk identified under point (5) above. "Live" sports betting 
suffers additionally from the risk set out under point (1). 

Question: 

(15) 

Do you have evidence that the factors listed above are linked to and/or central 
for the development of problem gambling or excessive use of on-line gambling 
services? (If possible, please rank them) 

62 
63 
64 
65 
66 

BE, DK, EE, FI, DE, NL, SE and UK. 
ES, HU, IT, LT, RO and SK. 
M. Griffiths, Problem gambling in Europe: An overview, Appex Communications, April 2009. 
BE, EE, NL and UK. 
FI, DE and MT. 

EN 

20 

   EN 

                                                 
EN 

21 

   EN 

To date across the Member States the instruments that have been used to try to limit excessive 
“problem gambling” in on-line services are those applied to all gambling, viz., 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

Age limits, 

Self-limitation (financial and time) and self-exclusion, 

Information/warnings/self tests (more easily applied on-line than off-line), 

Banning the use of credit, 

Reality checks, 

Diligence obligation for the on-line operator, 

Restricting  certain  forms  of  games  or  bets  that  are  considered  to  be  the  most  risky 
(e.g. casino games or in sports betting restricting bets to final results only), and 

Other (e.g. limits on commercial communication – restrictions on the use of certain 
media, sales promotions and sign-up bonuses or free practice games). 

Question: 

(16) 

Do  you  have  evidence  that  the  instruments  listed  above  are  central  and/or 
efficient  to  prevent  or  limit  problem  gambling  relating  to  on-line  gambling 
services? (If possible, please rank them)  

Gambling addiction 

Where  such  information  is  available,  rates  of  probable  gambling  addiction  appear  to  vary 
from  0.3%  to  3.1%  of  the  entire  population67.  Pathological  (addictive)  gambling  has  been 
considered by some specialists as an impulse control disorder68 and therefore not referred to 
as  addiction.  However,  recent  studies  have  discovered  similarities  between  gambling  and 
substance addiction69. As mentioned in section 3.1, gambling problem screening tools used in 
surveys  allow  for  the  identificationof  individualsthat  have  severe  problems  with  their 
gambling  behaviour.  There  are  contrary  views  as  regards  the  addictive  potential  of  on-line 
gambling.  Although  remote  gambling  fulfils  the  criteria  of  availability  and  accessibility, 
making frequent playing easier than in case of land-based gambling venues, it is difficult to 
draw  direct  links  between  remote  gambling  and  the  likelihood  of  becoming  an  addicted 
gambler. 

On-line  gambling  provides  operators  with  more  sophisticated  possibilities  to  track  the 
transactions of each player compared to off-line gambling formats. In contrast to prevalence 
studies, on-line gambling data allow for studies of the player’s real behaviour. A study of on-

67 

68 

69 

Data  from  7  Member  States,  M.  Griffiths,  Problem  gambling  in  Europe:  An  overview,  Appex 
Communications, April 2009. 
Diagnostic  and  Statistical  Manual  of  Mental  Disorders,  4th  Ed.,  American  Psychiatric  Association, 
1994. 
Draft  of  the  Diagnostic  and  Statistical  Manual  of  Mental  Disorders,  5th  Ed.,  American  Psychiatric 
Association, publication planned for 2013. 

EN 

22 

   EN 

                                                 
line gaming behaviour carried out by the Division on Addiction, Cambridge Health Alliance, 
a teaching affiliate of Harvard Medical School70, based on a long term analysis of individual 
gaming activity of a random sample of nearly 50,000 on-line casino players from 80 countries 
and  an  almost  equal  sample  of  on-line  sports  betting  participants  showed  that  99%  of  the 
customers of on-line sports betting did not display any unusual gaming behaviour compared 
to 95% in the case of on-line casino players71. 

The  report  prepared  for  the  Swedish  Presidency  in  200972  mentions  that  although  some 
research  suggests  the  existence  of  a  positive  link  between  accessibility  and  gambling 
addiction, the available empirical data do not always confirm this. Where it has been possible 
to  compare  the  results  of  prevalence  studies  carried  out  7-10  years  ago  (when  on-line 
gambling was less popular) with the results of studies carried out more recently, the gambling 
addiction prevalence rate remained steady73.  

Also  the  British  Gambling  Prevalence  Survey  carried  out  for  the  Gambling  Commission  in 
2007  found  that  addiction  rates  for  on-line  gambling  in  the  UK  were  lower  than  for  some 
types of off-line games and that the addiction seemed to be more linked to the introduction of 
new and thus more "attractive" types of games, whether on-line or off-line74.  

The  Commission  notes  that  most  on-line  gambling  websites  established  and  licensed  in  the 
EU have hyperlinks to help-lines or organisations working with problem gamblers. However, 
even if 15 Member States have carried out national or regional prevalence studies – there is 
little information available about the relevant policy response to these studies (e.g. launch of 
educational  campaigns  or  additional  recourses  given  to  prevention  or  treatment)  or  to  what 
extent problem gamblers have access to treatment75. 

Questions: 

(17) 

(18) 

Do  you  have  evidence  (e.g.  studies,  statistical  data)  on  the  scale  of  problem 
gambling at national or EU level? 

Are there recognised studies or evidence demonstrating that on-line gambling is 
likely to be more or less harmful than other forms of gambling for individuals 
susceptible to develop a pathological gaming pattern? 

(19) 

Is  there  evidence  to  suggest  which  forms  of  on-line  gambling  (types  of  games) 
are most problematic in this respect? 

70 

71 

72 

73 
74 

75 

The  study  was  carried  out  in  a  research  partnership  with  bwin  who  made  its  customer  database 
available. 
LaBrie, LaPlante, Nelson, Schaffer, Assessing the Playing Field: A prospective Longitudinal Study of 
Internet  Sports  Gambling  behaviour  (with  Schumann,)  Journal  of Gambling  Studies,  2008;  Inside  the 
virtual  casino:  A  prospective  longitudinal  study  of  Internet  casino  gambling  (with  Kaplan),  European 
Journal  of  Public  Health,  2008  and  Population 
in  Internet  sports  gambling"  (with 
Schumann),Computers in Human Behaviour, 2008. 
Svenska Spel, The cost of gambling. An analysis of the socio-economic costs resulting from problem 
gambling in Sweden. Council of the EU. DS 406/09. Brussels, 2009. 
For example: Finland and UK.  
Addiction rates among past year gamblers. British Gambling Prevalence Survey 2007, National Centre 
for Social Research, Sept 2007. 
Only  4  Member  States  (AT,  EE,  FI  and UK) provided  the  Commission  with  information on problem 
gambling  in  the  context  of  the  Commissions  study  "Study  on  gambling  services  in  the  EU  Internal 
Market", Chapter 9.9, p. 1453, cited above. 

trends 

EN 

23 

   EN 

                                                 
(20)  What  is  done  at  national  level  to  prevent  problem  gambling?  (E.g.  to  ensure 

early detection)?  

(21) 

Is  treatment  for  gambling  addiction  available  at  national  level?  If  so,  to  what 
extent  do  on-line  gambling  operators  contribute  to  the  funding  of  such 
preventive actions and treatment? 

(22)  What is the required level of due diligence in national regulation in this field? 
(E.g. recording on-line players' behaviour to determine a probable pathological 
gambler?). 

Protection of minors and other vulnerable groups 

The regulatory frameworks in all Member States seek in different ways to protect minors, i.e. 
children and adolescents, against the risks of gambling in general76. Age limits for gambling 
may  be  set  out  in  law  or  in  licence  conditions  and  operators  (including  retailers/concession 
holders)  are  obliged  to  carry  out  age  verification.  The  age  limits  in  an  individual  Member 
State may also vary from one gambling service to another. 

Questions: 

(23) 

(24) 

Are the age limits for having access to on-line gambling services in your or any 
other Member State in your view adequate to attain the objective sought? 

Are on-line age controls imposed and how do these compare to off-line 'face-to-
face' identification?  

Minors’ access to payment systems 

Payment processing systems can be an effective means to prevent access to on-line gambling 
services  by  minors.  Though  it  is  possible  for  persons  under  the  age  of  18  to  open  bank 
accounts,  there  are  limitations.  A  wide  range  of  documents  and  proofs  of  identity  must  be 
presented  and,  as  a  rule,  a  parent  or  a  legal  guardian  must  present  him/herself  in  the  bank 
together with the underage account holder (parental control). Young persons are not normally 
legally responsible for their debts so they are unlikely to be  granted an  overdraft on a  bank 
account and credit card applications from people under the age of 18 will be turned down. As 
a  consequence,  the  bank  or  the  financial  service  provider  will  provide  an  extra  level  of  age 
verification before a young player can open a player's account with an on-line operator. 

However,  stakes  can,  and  will  increasingly,  be  paid  by  using  a  mobile  phone  (added  to  the 
invoice), e.g. by a text message or a call to premium rate phone number and in these cases it 
may be easier for minors to be able to gamble. 

– 

Minors and marketing of on-line games 

As Member States authorities (and operators) seek to prevent minors from having access to 
on-line  gambling  services,  they  also  seek  to  control  marketing  and  promotion  of  such 
services. Examples of restrictions include rules that require promotions for such services not 
to: 

76 

The age of majority in all Member States except Austria is 18 (Austria 19). 

EN 

24 

   EN 

                                                 
– 

– 

– 

– 

– 

Be directed at those aged below the national limit for participation; 

Be  broadcast  (TV  or  radio)  or  communicated  during  specific  programmes  aimed 
towards young people on mainstream channels, or for certain periods of time before 
or after such programmes; 

Include or display a person that appears to be of an age below the national limit for 
participation; 

Otherwise appeal to children or young persons, e.g. by being associated with youth 
culture  or  communicated  by  a  celebrity  (e.g.  replica  jerseys  promoting  an  on-line 
gambling operator) ; or 

Be displayed close to areas that children frequent (e.g. billboard advertising close to 
schools). 

Question: 

(25) 

How are commercial communications for gambling services regulated to protect 
minors  at  national  or  EU  level?  (E.g.  limits  on  promotional  games  that  are 
designed  as  on-line  casino  games,  sports  sponsorship,  merchandising  (e.g. 
replica jerseys, computer games etc) and use of social on-line networks or video-
sharing for marketing purposes. 

– 

Other vulnerable types of players 

Other players may be vulnerable due to their: 

– 

– 

– 

– 

– 

Financial situation; players on low incomes; 

Inexperience;  in  particular  young  adults  (aged  18-21)  and/or  those  that  are  not 
awareof the risks associated with problem gambling; 

Previous dependency or addiction relating to a chemical substance use or behaviour 
(use of off-line gambling services); 

Easy access to gambling; sales agents or employees of gambling service providers or 
contractors; and 

Other  frequent  exposure  to  gambling  and/or  strong  links  to  betting  objects.  This 
could  include  persons  employed  in  the  horse  racing  sector,  athletes  (amateurs  and 
professionals), coaches, referees, stock-brokers etc. 

Question: 

(26)  Which  national  regulatory  provisions  on  licence  conditions  and  commercial 
communications for on-line gambling services account for these risks and seek 
to protect vulnerable consumers? How do you assess them?  

EN 

25 

   EN 

2.3.2.  Public order 

Prevention of fraud 

All  Member  States  seek  to  prevent  fraud  and  unfair  games.  National  legislation  aims  to 
protect,  consumers  (from  fraudulent  and  criminal  operators),  operators  (from  fraudulent 
players  or  player  syndicates)  and  event  organisers.  Examples  include:  unauthorised  use  of 
credit  cards,  which  may  also  be  associated  with  "identity  theft"  and  'match-fixing'  (event-
fixing)  where  an  individual,  a  group  of  persons  (typically  associated  with  organised  crime) 
seek to influence the outcome of an event (e.g. a sports event or a card game)77. Fraud also 
occurs when a group of players colludes against another player (e.g. rigged poker tables). 

The  Commission  has  identified  the  following  three  types  of  fraud  on  which  it  wishes  to 
consult: 

– 

– 

– 

Players  not  receiving  their  winnings.  Typical  examples  include  fraudulent  "lottery 
scams", where an unlicensed illegal operator contacts consumers asking them to pay 
an  amount  of  money  (handling  fee)  or  give  personal  information  (bank  details) 
before  a  prize  can  be  paid.  Such  scams  frequently  make  false  reference  to 
authorisations given by European gambling authorities78. 

Identity theft and data protection related issues. These involve the unauthorised use 
of  another  person’s  personal  information  to  assume  that  person's  identity  and  thus 
access resources or obtain credit and other benefits in that person's name.  

Manipulation  of  the  outcome  by  tampering  with  the  software  associated  with  the 
game or through corruption of persons involved in organising the game or event. 

Questions: 

(27) 

(28) 

Are  you  aware  of  studies  and/or  statistical  data  relating  to  fraud  and  on-line 
gambling? 

Are  there  rules  regarding  the  control,  standardisation  and  certification  of 
gambling  equipment,  random  generators  or  other  software  in  your  Member 
State? 

(29)  What, in your opinion, are the best practices to prevent various types of fraud 
(by  operators  against  players,  players  against  operators  and  players  against 
players) and to assist complaint procedures? 

(30) 

As  regards  sports  betting  and  outcome  fixing  -  what  national  regulations  are 
imposed  on  on-line  gambling  operators  and  persons  involved  in  sport 
events/games  to  address  these  issues,  in  particular  to  prevent  'conflicts  of 

77 

78 

E.g. criminal organisations based in China or Croatia have been involved in match fixing in BE, DE and 
FI. 
This  should  not  be  considered  to  be  associated  with  delayed  winnings  where  a  licensed  operator 
withholds winnings for due diligence purposes without giving the player sufficient information why this 
is  done.  The  operator  should  in  such  cases  explain  why  the  payment  is  withheld.  The  most  common 
explanation for such delays is additional customer identification controls. 

EN 

26 

   EN 

                                                 
interest'?  Are  you  aware  of  any  available  data  or  studies  relating  to  the 
magnitude of this problem? 

(31) 

In your view what issues should be addressed as a priority? 

(32)  What risks are there that a (on-line) sports betting operator, which has entered 
into a sponsorship agreement with a sports club or an association, will seek to 
influence the outcome of a sports event directly or indirectly for profitable gain? 

Prevention of Money laundering  

The  two  extreme  types  of  "money  laundering"  activity  are  on  the  one  hand,  complex 
transnational  operations  designed  to  hide  the  criminal  origins  of  large  scale  crimes  so  that 
people  and  property  are  made  to  appear  legitimate,  and  on  the  other,  any  activity  that 
conceals, disguises, or disposes of the proceeds of any crime, no matter what the sum (self-
laundering  by  offenders  –  sometimes  expenditure  –  but  also  crimes  to  feed  gambling 
addiction). 

As  regards  money  laundering  techniques,  there  is  very  limited  information  or  evidence 
suggesting  that  licensed  on-line  gambling  operators  in  Europe  are  subject  to  money 
laundering  activities.  However,  the  problem  is  obviously  linked  to  illegal  operators.  The 
Commission  understands  that  the  following  practices  could  potentially  be  used  for  such 
purposes: 

– 

– 

– 

– 

On-line  gambling  firms  could  credit  winnings  or  unused  funds  back  to  an  account 
other than the one from which the original bet was made. 

They could allow one player to register multiple accounts with the same operator. 

Peer-to-peer  games  such  as  e-poker,  where  value  transfers  can  occur  between  both 
electronic and human players as a result of deliberate losses, at a relatively low cost 
to the players. Such games could allow for on-line “chip dumping”. For example; a 
player deposits funds with a stolen credit card and then "dumps" the chips at a table 
to  an  accomplice  or  another  account  he  created.  These  activities  can  be  detected 
given that the principles are simple – players will make large bets on very bad hands 
(expecting to lose to the accomplice)79. 

Use  of  e-cash  as  a  payment  option  or  similar  means  of  payments  such  as  Stored 
Value  Cards80  (those  of  concern  are  characterised  by  high  limits,  no  post-purchase 
monitoring and poor know-your-customer (KYC) controls). This could also include 
payment enabled mobile phones that have not been through adequate KYC controls. 

Questions: 

(33)  What cases have demonstrated how on-line gambling could be used for money 

laundering purposes? 

79 

80 

On-line poker rooms are aware of this scam and are seeking to detect perpetrators before their cash-outs 
are approved. 
A stored-value card refers to monetary value on a card not in an externally recorded account and differs 
from prepaid cards where money is on deposit with the issuer similar to a debit card. 

EN 

27 

   EN 

                                                 
(34)  Which  micro-payments  systems  require  specific  regulatory  control  in  view  of 

their use for on-line gambling services? 

The 3rd Money laundering Directive81 is applicable to the financial sector as well as to other 
areas including casinos (bricks-and-mortar and on-line). 

A  particular  problem  with  the  enforcement  of  the  provisions  of  this  directive  to  on-line 
gambling  services  is  that  such  websites  frequently  offer  a  variety  of  other  (non-casino) 
gambling services and the operator may be licensed in more than one jurisdiction. 

In  addition  to  such  general  principles,  the  Commission  is  aware  that  licensed  on-line 
gambling operators and national regulators have established a range of operational practices 
to fight against money laundering. These include: 

– 

– 

– 

Customer  due  diligence  –  only  registered  players  holding  an  account  with  the 
licensee  are  allowed  to  play.  Application  forms  must  be  completed  containing 
information (1) that the player is over the legal age limit to gamble (2) the player’s 
identity (3) the player’s place of residence and (4) the player’s valid e-mail address. 
The due diligence process may include velocity analysis (deposit/trades), geographic 
risk  analysis,  player  behaviour  anomaly,  exposing  player  associations  and 
cybercrime arrest policy. In all cases the player has to opt-in to provide the relevant 
personal data to allow for his account to be established. 

Payment  controls  -  the  player  should  always  receive  any  payout  from  winnings 
(balance of account) by the same means in which the money was originally received 
(and to the account from which it was deposited). Operators must also make sure that 
they have control over the credit card numbers and personal data, relating to players, 
which  they  have  stored  in  their  systems.  Moreover,  direct  payments  between 
customers are prohibited. 

Operational controls – Operators use age verification lists and lists used by banks to 
identify terrorists and politically exposed persons (PEPs), i.e. World Check82 and the 
European  Sports  Security  Association's  (ESSA83)  watch  list.  Operators  also  keep 
statistical  records  of  transactional  behaviour,  which  must  comply  with  EU  data 
protection  rules,  in  order  to  be  able  to  identify  suspicious  activities.  They  are 
required to apply stricter due diligence requirements where there are high limits on 
stakes. Operators must also submit Suspicious Activity Reports (SAR) to the national 
Financial Intelligence Units (FIU). 

Questions: 

(35) 

(36) 

Do you have experience and/or evidence of best practice to detect and prevent 
money laundering? 

Is there evidence to demonstrate that the risk of money laundering through on-
line  gambling  is  particularly  high  in  the  context  of  such  operations  set  up  on 
social web-sites? 

81 
82 
83 

Cited in Section 1.2. 
http://www.world-check.com/politically-exposed-person-pep-compliance/ 
http://www.eu-ssa.org/Home/tabid/36/Default.aspx 

EN 

28 

   EN 

                                                 
Prevention of other crimes 

Other crimes that may be linked to on-line gambling include: 

– 

– 

– 

Provision  of  gambling  services  offered  by 
illegal  operators  (e.g.  criminal 
organisations  or  individuals).  A  French  report  on  Cyber  crime  and  Gambling 
estimates  that  a  thousand  gambling  websites  are  directly  operated  by  criminal 
groups84, 

Non-authorised on-line games offered by a licensed operator, 

Tax evasion (where there is an obligation for the user to pay tax on winnings, i.e. tax 
evasion may primarily be invoked in relation to winnings from off-shore activities). 

There are also a number of criminal activities that are relevant for many gambling services but 
not  specifically  for  on-line  gambling,  such  as  (i)  match  fixing  or  rigged  poker  tables  (see 
above), (ii) loan sharking activities and (iii) criminal activities carried out to finance the use of 
gambling services (e.g. theft) and (iv) the financing of terrorism. 

Question: 

(37) 

Are there national on-line gambling transparency requirements? Do they apply 
to cross border supply of on-line gambling services and are these rules enforced 
effectively in your view? 

2.3.3.  Financing of benevolent and public interest activities as well as events on which on-

line sports betting relies  

Restrictions  on  gambling  services  at  national  level  are  at  times  justified  by  policy  reasons 
such  as  the  financing  of  benevolent  or  public  interest  activities.  Notwithstanding  that  the 
systems  put  in  place  for  this  purpose  should  comply  with  applicable  state  aid  rules,  it  is 
noteworthy that according to the Court of Justice the funding of such social activities may not 
constitute the substantive justification for the restrictive policy but only an ancillary beneficial 
consequence85. Such restrictions seek to assist the funding of "public interest activities" that 
society at large can benefit from. More specifically, the public interest activities that currently 
benefit  directly  in  this  manner  in  the  Member  States  are  the  arts,  culture,  sport86, 
youth/educational programmes and charity related activities.  

Systems of revenue channelling  

The  reliance  on  gambling  revenues  to  fund  public  interest  activities  is  organised  in  various 
ways. The organisation or company responsible for the public interest activities: 

84 

85 

86 

The  French  Institute  (CERT-LEXI)  analysed  70  million  websites  in  2005  and  found  14823  sites 
offering online gambling. Only 2005 websites were subject to a licence. 
E.g. case C-67/98 (Zenatti) §§ 36-37 and case C-316/07 (Markus Stoß) § 104. See also the Judgement 
of the EFTA Court in case 3/06 (Ladbrokes) §63.  
See  also  the  Commission's  Communication  "Developing  the  European  Dimension  in  Sport"  - 
COM(2011)  12,  which  notes  the  need  to  take  account  of  the  sustainable  financing  of  sport  when 
addressing the provision of gambling services in the Internal Market (page 9)  

EN 

29 

   EN 

                                                 
(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

Is granted a licence87 to offer on-line gambling service in order to support the “good 
cause”  recognised  by  the  relevant  licensing  authority  (e.g.  a  national  Olympic 
committee, a national horse racing body , an association for blind persons etc.); 

Receives  funds  directly  from  a  State  gambling  operator  (e.g.  a  national  lottery) 
according to a rate fixed by the licence or legislation regulating that operator; 

Receives  funds  from  a  State  gambling  operator  indirectly  via  the  State  budget  into 
which that State operator has contributed; 

Receives funds from one or more private gambling operators and the contribution of 
funds is: 

(a)  Determined by the licence or legislation or 

(b)  Based on voluntary contributions from the operators; 

Receives economic compensation for the use of an event it organises and on which 
bets  are  placed  even  if  the  organisation  or  company  is  not  involved  in  the 
organisation of the gambling activity itself; 

Receives funds from the State budget that has been contributed to by both State and 
commercial gambling operators.  

Questions: 

(38) 

(39) 

(40) 

Are  there  other  gambling  revenue  channeling  schemes  for  the  public  interest 
activities at national or EU level?  

Is there a specific mechanism, such as a fund, for redistributing revenue  from 
public and commercial on-line gambling services to the benefit of society? 

Are  funds  returned  or  re-attributed  to  prevention  and  treatment  of  gambling 
addiction? 

87 

Organisations  or  companies  responsible  for  benevolent  or  public-interest  activities  may,  to  varying 
degrees, be allowed to enter into agreement with private operators that provide the gambling platform 
and  promote  the  gambling  services  (who  fully  or  partly  runs  the  operations  and  receives  economic 
compensation for this). 

EN 

30 

   EN 

 
 
                                                 
The Commission wishes to focus further on two issues:  

Possible existence of a principle of return to event organisers 

National and non-domestic sport events are used by on-line operators to present an attractive 
selection  of  gambling  services  to  their  potential  customers.  These  events  may  benefit  from 
such  gambling  activities  in  that  they  create  additional  public  interest  and  possibly  also 
increase the event's media exposure. There is a broad consensus that sport events, on which 
gambling relies, should receive a fair return from the associated gambling activity:  

– 

– 

Taking  the  specific  case  of  horse-racing  some  Member  States  impose  an  exclusive 
licence  for  horse  race  betting  to  an  organisation  or  company  with  the  objective  to 
ensure that the turnover from horse-race betting, except for winnings, totalisator fee 
and  operating  expenses,  is  given  to  equestrian  sports,  horse  breeding  and  horse 
husbandry. While national structures vary, the support to the horseracing and equine 
sector  can  be  significant  rising  to  more  than  8%  of  the  total  betting  turnover  in 
certain  countries.  A  specificity  of  horse  racing  compared  to  other  sports  is  that  its 
primary attraction is for gamblers. Thus, to a greater degree than other sport events, 
its  viability  will  depend  on  sufficient  proportions  of  gambling  revenues  being 
reinvested  into  the  activity.  Furthermore,  in  certain  Member  States  the  tradition  of 
equestrian sports, horse breeding and husbandry, all of which are supported through 
this  channelling  of  gambling  revenues,  have  and  continue  to  play  an  important 
economic  role  in  rural  areas  and  may  therefore  be  linked  to  regional  development 
and territorial cohesion policy objectives.  

Other  sports  have  a  more  mixed  revenue  stream  either  because  they  have  wider 
public  appeal  and/or  because  they  lend  themselves  less  to  gambling  services. 
Nevertheless, when gambling services are offered on an organised sport competition, 
the issue of whether the organisers (sport organisations, teams etc.) should be able to 
generate  an  additional  revenue  stream  through  such  exploitation  of  their  images  or 
events by gambling service providers has been addressed by Member States. Given 
that without the use of their events the gambling services would not be viable, a fair 
return  for  the  use  of  their  events  is  sought.  Certain  State  operators  offering  sports 
betting services on professional sports are thus obliged to channel revenues back into 
grassroots  sports  and  thus  help  assist  the  public  interest  activities  of  encouraging 
participation in sporting activities in general. The Commission has launched an EU 
study on the funding of grassroots sports which should show the real importance of 
the  different  funding  sources,  including  revenue  from  the  organisation  of  gambling 
services, for grassroots sports88. 

Finally, sport events on which sports betting can be organised may, due to criminal activities, 
be subject to a higher risk of match fixing. One Member State (France) has established a non-
exclusive  sports  betting  right  for  gambling  services  to  contribute  to  the  investment  by 
organisers  of  sport  competitions  that  is  motivated  primarily  on  the  grounds  of  the  need  to 
ensure integrity. 

Questions: 

88 

COM(2011)12 p. 9 

EN 

31 

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(41)  What are the proportions of on-line gambling revenues from sports betting that 

are redirected back into sports at national level?  

(42) 

(43) 

Do  all  sports  disciplines  benefit  from  on-line  gambling  exploitation  rights  in  a 
similar manner to horse-racing and, if so, are those rights exploited?  

Do  on-line  gambling  exploitation  rights  that  are  exclusively  dedicated  to 
ensuring integrity exist? 

The risk of "free-riding" through the provision of on-line gambling services 

Member  States,  given  their  differing  national  cultural  and  historical  traditions,  will  rely  on 
differing gambling revenue channelling systems and rates. For example, Member States that 
have  no  history  of  horse-racing  or  horse  husbandry  obviously  have  no  need  for  a  revenue 
channelling scheme for that purpose. Likewise, certain Member States will choose to finance 
certain public interest activities exclusively from fiscal revenue whereas others may wish to 
also rely on channelling gambling revenues for the same purpose.  

It  follows  that  when  gambling  services  are  offered  on  events  taking  place  in  other  Member 
States or when gamblers from one Member State choose to place stakes on gambling services 
provided from another Member State there will be direct effects on the efficiency of national 
gambling revenue channelling systems. This will be particularly the case when gamblers are 
exclusively  focussed  on  seeking  highest  returns.  This  "free-riding"  problem  is  strictly 
speaking not limited to cross-border on-line gambling services since gamblers can in principle 
always  physically  cross  borders  to  access  gambling  services  but  nevertheless  on-line 
gambling services in practice differs as it heightens this possible effect significantly.  

The  effect  may  be  tempered  or  even  reversed  by  the  fact  that  certain  gamblers  play  on 
particular  gambling  services  because  those  services  are  linked  to  the  financing  of  public 
interest  activities.  This  may  be  because  the  link  to  the  public  interest  activities  reduces  the 
social stigma associated with gambling or may even be the primary motivation for gambling 
on  such  services.  For  example,  given  the  very  low  odds  of  winning  in  certain  types  of 
gambling  services  (e.g.  low  value  lotteries  offered  by  charitable  organisations)  it  can  be 
considered that many players of such games place a stake on them rather than on other types 
of  gambling  services  offering  higher  odds  of  winning  primarily  because  they  consider  that 
that stake will go to a  valid public interest  activities. These types of gamblers may even be 
attracted to offers of such on-line gambling services emanating from other Member States that 
have  stronger  direct  links  to  public  interest  activities  that  they  wish  to  support  compared  to 
national on-line gambling service offers. 

Questions: 

(44) 

(45) 

Is there evidence to suggest that the cross-border "free-riding" risk noted above 
for  on-line  gambling  services  is  reducing  revenues  to  national  public  interest 
activities that depend on channelling of gambling revenues? 

Are there transparency obligations that allow for gamblers to be made aware of 
whether  and  how  much  gambling  service  providers  are  channelling  revenues 
back into public interest activities? 

EN 

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2.4. 

Enforcement and related matters 

An unauthorised cross-border market may be accessible to consumers, due either to de facto 
tolerance  or  lack  of  effective  enforcement.  Effective  enforcement  is  essential  for  Member 
States  to  ensure  the  achievement  of  the  public  interest  objectives  behind  their  national 
gambling policy. 

Gambling authorities in the Member States 

Different  types  of  organisational  structures  are  used  for  the  granting  of  licences,  regulation 
and  supervision  of  on-line  gambling.  The  independence  and  power  of  these  structures  vary. 
Within a Member State differing forms of on-line gambling services may also be regulated or 
supervised by separate bodies (e.g. promotional games, media games and spread betting)89. 

Activities of gambling authorities may cover a wide range of issues, including: 

– 

– 

– 

– 

Issuing, suspending and revoking licences; 

Control and supervision functions including administrative or financial controls, on-
site  inspections,  technical  inspections  (e.g.  equipment  or  software),  and  on-line 
monitoring of activities; 

Enforcement  -  to  open,  institute  and  prosecute  proceedings  involving  offences 
relating  to  (a)  provision  of  illegal/unauthorised  gambling  services;  and  (b) 
commercial communications relating to gambling services or operators (legal as well 
as illegal/unauthorised gambling services); 

Providing advice, information or support to Government, players (the public) and/or 
operators. 

Questions: 

(46) 

Is there a regulatory body in your Member State, what is its status, what are its 
competences  and  its  scope  of  action  across  the  on-line  gambling  services  as 
defined in this Green Paper? 

(47) 

Is there a national register of licensed operators of gambling services? If so, is it 
publicly accessible? Who is responsible for keeping it up to date? 

Administrative cooperation 

Administrative  cooperation  between  EEA  regulators  is  today  based  on  ad-hoc  cooperation 
between a limited number of Member States. Regulators from all over Europe have a specific 
forum in which they meet, exchange views and discuss policy on gaming matters (GREF90). 
Possible  areas  of  administrative  cooperation  include  sharing  or  exchanging  information 
relating to: 

89 

90 

The  differing  authorities  at  national  level  that  carry  out  the  regulatory  tasks  are  as  follows:  (i)  A 
ministry with no specialised office; (ii) A specialised office within a ministry; (iii) A ministerial office 
located  outside  the  ministry;  (iv)  An  agency/inspectorate  under  ministerial  control;  and  (v)  A  State 
recognised independent regulatory body. 
http://www.gref.net/index.htm  

EN 

33 

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– 

– 

– 

– 

licence  holders  (including  licence  conditions,  professional  qualities  of  staff  and 
integrity of operators); 

unlicensed and fraudulent operators (common blacklisting); 

issues of a technical nature, such as national standards, testing and certification; 

good  practices  (including  public  campaigns  to  prevent  crime  or  problem  gambling 
and the costs and effects of such campaigns). 

Question: 

(48)  Which  forms  of  cross-border  administrative  cooperation  are  you  aware  of  in 

this domain and which specific issues are covered? 

Enhanced cooperation with other stakeholders 

Gambling authorities in the Member States may also be working with national/European sport 
stakeholders and/or public/private betting operators to develop: 

– 

– 

Educational  programmes  or  campaigns  for  athletes  (amateurs  and  professionals), 
coaches,  referees,  persons  employed  in  the  horse  racing  sector  or  by  public/private 
on-line gambling operators etc.; and/or 

Early warning systems to strengthen enforcement to prevent match-fixing.  

Question: 

(49) 

Are you aware of such enhanced cooperation, educational programmes or early 
warning  systems  that  are  aimed  at  strengthening  integrity  in  sport  and/or 
increase awareness among other stakeholders? 

Payment blocking and liability regimes for ISPs 

Payment  and  communication  providers  (telecom  operators, 
television  channels  and 
information  society  providers)  enable  on-line  gambling  services.  Today,  in  order  to  restrict 
"unauthorised" and cross-border on-line gambling services the following types of methods are 
imposed on such intermediary service providers: 

– 

– 

91 

Domain Name System (DNS) filtering; A DNS filtering mechanism seeks to ensure 
that potential customers are prevented to gamble on unauthorised pre-listed sites or 
are  redirected  to  another  address  (website)  on  the  basis  of  a  pre-defined  list  of 
internet addresses (domain names) e.g. from a .com site to one established within the 
relevant national jurisdiction91. 

Internet  Protocol  (IP)  blocking.  Every  device  connected  to  the  public  internet  is 
assigned a unique number known as an IP address, which includes the hostname. IP 
blocking  prevents  the  connection  between  a  server/website  and  one  or  more  IP 
addresses.  

Italian experiences suggest that millions of redirections take place every week. 

EN 

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– 

Payment  blocking,  may  be  based  on  the  operators  "Merchant  Category  Codes" 
(MCC)92.  However,  the  prohibition  of  processing  of  payments  linked  to  a  certain 
code may block licit commercial transactions other than payments relating to stakes 
and prizes. 

The  efficiency  of  a  blocking  system  depends  on  a  pre-defined  and  updated  list  of  items  to 
block as well as efficient software systems. 

Questions: 

(50) 

Are any of the methods mentioned above, or any other technical means, applied 
at  national  level  to  limit  access  to  on-line  gambling  services  or  to  restrict 
payment  services?  Are  you  aware  of  any  cross-border  initiative(s)  aimed  at 
enforcing such methods? How do you assess their effectiveness in the field of on-
line gambling?  

(51)  What are your views on the relative merits of the methods mentioned above as 
well  as  any  other  technical  means  to  limit  access  to  gambling  services  or 
payment services? 

92 

The MCC used for gambling is 7995. 

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