COMMISSION STAFF WORKING PAPER Accompanying document to the   GREEN PAPER   On on-line gambling in the Internal Market   {COM(2011) 128 final}
Date: 2011-03-24
Institutions: European Commission
Subjects: Internet, automatic game, code of conduct, consumer protection, domestic market, fraud, freedom to provide services, game of chance

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EUROPEAN COMMISSION 

Brussels, 24.3.2011 
SEC(2011) 321 final 

COMMISSION STAFF WORKING PAPER 

Accompanying document to the 

GREEN PAPER 

On on-line gambling in the Internal Market 

{COM(2011) 128 final} 

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TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

1.3. 

Regulating on-line gambling in the EU: Recent developments and current challenges 
from the Internal Market standpoint ............................................................................ 3 

The Stakeholders and their interests ............................................................................ 3 

Key findings in the Commission's 2006 study............................................................. 6 

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

1.4.  What are the most popular on-line gambling services in the EU27?......................... 10 

1.5 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

2.6. 

Gambling and the Consumer Market Monitoring Survey ......................................... 11 

Secondary legislation, notifications and case law...................................................... 13 

EU secondary legislation relevant to on-line gambling ............................................ 13 

Case law relating to Internal Market rules and gambling services- an overview ...... 15 

Application of state aid rules...................................................................................... 17 

Research and Technological Development................................................................ 17 

Financing of benevolent and public interest activities............................................... 17 

Notifications............................................................................................................... 18 

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The purpose of the Green paper on on-line gambling is to collect the facts, assess the stakes 
and  to  gather  the  views  of  all  interested  stakeholders  on  a  phenomenon  that  has  multiple 
dimensions. The Green paper seeks 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 "unlawful" on-line gambling offers directed at citizens located 
in the EU.  

This  staff  working  paper  provides  background  material  of  an  explanatory  nature.  This 
document is only available in English and is not a part of the Commission's consultation on 
on-line gambling in the Internal Market. 

* * * 

1. 

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

1.1. 

The Stakeholders and their interests 

(a)  Citizens.  Many  EU  citizens  purchase  on-line  gambling  services  for  entertainment 
purposes1, while a smaller group of players make a living as professional gamblers (e.g. 
professional poker players) and there are also associations/syndicates operating in the EU 
market. Many of these users, either because of a lack of national supply of such services 
or because they seek to maximise their return on stakes, search across competing on-line 
gambling services across borders.  

According to a study from 2006, the profile of an average on-line gambler seems to differ 
from that of a traditional casino or betting shop customer and tends to reflect the profile of 
the  average  internet  user  –  young  and  educated.  On-line  gambling  also  attracts  more 
women than traditional bricks and mortar forms of gambling, as the internet sites are easy 
to customise and the offer of gambling services may be designed to appeal to the female 
population2.  

Citizens who gamble may be interested, inter alia, in the following issues: 

•  Protection  from  fraud  (where  on-line  gambling  is  permitted)  in  that  the  supply  of 
services  should  come  from  licensed  operators  and  be  well  regulated  and  supervised 
by relevant authorities. This also includes protection from misleading and aggressive 
marketing practices. 

1 

2 

Gambling being an entertainment service is also reflected in its statistical classification - CPA section 
R:  Arts,  entertainment  and  recreation  services  (two  specific  codes  for  online  gambling:  92.00.14  On-
line  gambling  services  and  92.00.21  On-line  betting  services).  On-line  gambling  is  an  area  where  a 
large  number  of  citizens  have  tried  to  benefit  from  an  extensive  offer  from  operators  established  in 
another  Member  State.  For  example,  one  commercial  operator  (Betfair)  processes  5.5  million 
transactions a day, which according to the company corresponds to twice the amount of all EU stock 
exchanges together. 
Department for Culture, Media and Sports (UK), "A Literature Review and Survey of Statistical Sources 
on Remote Gambling" Final Report, RSeconsulting, October 2006 

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•  Choice / economic interest in terms of attractive selection of gambling services and 

good payback ratio. 

•  Fairness  which  includes  that  games  are  regulated  and  supervised.  Fairness  also 
includes transparency conditions; that potential users receive information on the rules 
of the game, the chance of winning and basic information about the operator before 
he/she takes up the offer. 

Citizens  may  have  an  interest  in  prohibitions  or  restrictions  to  the  provision  and/or 
promotion of on-line gambling services for various reasons, including moral, religious or 
related to public health. It must be noted that there are citizens who have problems with 
their  gambling  habits  and  need  help  and  support  to  address  this.  (These  problems  are 
highlighted in section 2.4 of the Green paper).  

These citizens may be interested, inter alia, in the following issues: 

•  Restrictions on commercial communications (e.g. prohibition of billboard advertising 
close  to  religious  premises  or  schools)  and  exposure  of  on-line  gambling  in  the 
editorial content of the media. 

•  Access to treatment for gambling addiction. 

•  Assistance for problem gamblers and/or their families to get their financial problems. 

 (b) Operators, providers of online gambling services, include private and public companies 
and  foundations  set  up  for  the  purpose  to  provide  gambling  services.  They  may  have  a 
business model that is based on exclusively providing online gambling or a mix of online 
and offline gambling. Operators also include gambling service providers that have their 
main  source  of  revenues  from  other  activities  such  as  media  operators  or  producers  or 
retailers that organise promotional games. 

Their key interests may include, inter alia,: 

•  Commercial objectives in that they wish to benefit from the scale and of the Internal 
Market  (market  access)  and  have  the  legal  security  to  exploit  these  commercial 
opportunities. 

•  Fairness  and  crime  prevention  (in  particular  to  prevent  fraud  by  players  and  match 

fixing). 

(c)  Media  operators  may  have  a  double  interest  in  online  gambling.  They  both  (i)  offer 
gambling services directly to consumers by using their audiovisual platform interactively 
(e.g. IPTV) or in combination with for example premium rate phone lines (calls or sms) 
and (ii) promote gambling services offered by other gambling operators (advertising and 
sponsorship).  

  Moreover,  they  have  an  interest  in  a  clear  regulatory  framework  as  they  may  be 
retransmitting  lottery  draws  (or  poker  tournaments)  into  non-national  territories  and  be 
held  responsible  for  displaying  visual  images  of  events  that  expose  commercial 
communications/promotions  of  gambling  services  or  (advertising  on  players  jerseys  or 
billboards at an arena) for which they do not receive any reimbursement. There is also an 

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increasing  number  of  specialised  magazines  that  are  dedicated  to  online  gambling  (in 
particular poker).  

To summarise, their key interests may, inter alia, include: 

•  Commercial  objectives  -  to  benefit  from  the  Internal  Market  (media  sales  / 

advertising). 

• 

legal security – including definitions of gambling services or rules on when a license 
is required for a game show. 

• 

the same as an operator (see operator above) if they offer on-line gambling services. 

(d)  Intermediaries,  include  internet  service  providers,  data  (storage)  centres,  providers  of 
telecom/broadband  infrastructure,  hard-  and  software  producers,  payment  service 
providers. 

They also include insurance companies (to the extent that bookmakers or other operators 
insure  risks),  advertising  agencies,  media  sales  companies,  event  organisers,  sport  wear 
producers (e.g. sales of replica football jerseys).3 

Key interests: 

•  Commercial – innovative businesses providing on-line gambling services are often 

driving developments in other areas by offering new revenue streams for these on-line 
and off-line service providers.  

•  Legal security (for example, clear rules on commercial communications to enter into 

sponsorship agreements with on-line gambling operators) 

(e)  Sport  event  organisers;  Organisers  of  horse  races  and  other  sports  events  and  interest 

groups linked to such events. 

Key interests include: 

•  Economic – to ensure that some of the proceeds from on-line betting are used to 

finance the events or the activities on which the bets are placed.  

• 

Integrity – to prevent that sport events are subject to manipulation.  

f) Good causes and other beneficiaries; Organisations or entities that receive a share of the 
proceeds from on-line gambling without being involved in the organisation of the activity. 
These include registered charities, grass root sport organisations, cultural organisations or 
institutes as well as Member States (fiscal revenues or license fees). 

3  

One of the seven goals listed in the Commission's digital agenda3 is a new Single Market to deliver the 
benefits of the digital era.  

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Key interests: 

•  Economic (It must be noted that a sport or cultural body that enters into a sponsorship 
agreement and therefore receives funds should be considered to be an Intermediary, 
mentioned under (d) above)  

(g)  Regulators  and  authorities  include  gambling  regulators,  police  authorities,  national 
Courts, consumer agencies and self regulatory associations in the area of advertising, 

(h)  Other  stakeholders,  Any  other  stakeholder  not  listed  above  including:  organisations, 
institutes (private or public) or individuals working with treatment and/or research relating 
to  problem  gambling  and  addiction,  persons  practising  a  legal  profession  (individual 
judges,  public  prosecutors  or  lawyers),  academics,  employees  working  for  online 
operators, offline operators whose business may be affected by the supply of online and 
investors.  

1.2. 

Key findings in the Commission's 2006 study4 

The purpose of the Study, carried out in 2005 and early 2006, was to evaluate how the various 
laws regulating on-line and off-line gambling services5 impact upon the smooth functioning 
of the Internal Market for these and their associated services and thus could restrict growth in 
employment and general economic activity associated with such services. The report listed all 
national  laws,  draft  laws,  self-regulatory  norms  and  jurisprudence  pertaining  to  the 
commercial  communication,  establishment  and  provision  of  gambling  services.  It  described 
stakeholders and markets, the expected cross-border development of each market sector and 
other  market  trends  linked  to  technological  change  and  international  developments.  Finally, 
the study identified, in view of these regulatory and market reviews, the existence and nature 
of barriers to the free movement of gambling services in the Internal Market.  

The  Study  presented  a  picture  of  a  very  fragmented  Internal  Market  where  Member  States 
frequently  imposed  restrictions  on  cross-border  gambling  services.  The  interpretation  of 
national rules was not always clear and the study listed almost 600 cases that were brought to 
national Courts6. 

The  Country  reports  for  remote  gambling  in  the  Study  pointed  out  some  of  the  policy 
positions towards remote gambling that had emerged among the Member States7.  These are 
summarised below  

4  

5  

6  
7  

Study on gambling services in the EU Internal Market. The contract was awarded to the Swiss Institute 
of Comparative Law. See http://ec.europa.eu/internal_market/services/gambling_en.htm  
(1)  lotteries,  (2)  betting  (including  horse  and  dog  racing,  event  betting  and  pool  competitions);  (3) 
gambling offered in casinos; (4) gambling on gambling machines that are placed in locations other than 
licensed casinos; (5) bingo; (6) media gambling (i.e. games in the editorial content of the media); (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.  
Chapter 7, "The impacts of internet gambling and other forms of remote gambling on the EU gambling 
market", page 1414. This overview did not include 3 of the EU25 Member States (CZ, EE and PL).  

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Restrict 
gambling 
activity 

Internet 
gambling 
prohibited 

Protect 
Monopoly & 
revenues 

Foreign 
operators 
not allowed 

Domestic 
internet 
gambling 
allowed 

Accepts 
cross border 
internet 
gambling 

Liberal 
approach 
with licenses 
offered 

AT, BE,ES, LX 

EL,HU LT, LX 

AT, BE, DK,  

BE, DK, ES,  

AT, BE, DE, ,  

CY, IR, LV,  

FI8, LV, MT,  

EL, FI, FR, IT, 

FR, HU, IT, 

ES, FR, IR, IT  MT, UK 

UK 

NL, PT, SE 

NL 

PT, SE, SI, SK 

Figure 1. Member States' policy positions towards remote gambling in 2005 

8  

The Åland Islands. 

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1.3. 

On-line gambling in the EU: current situation 

As  mentioned  in  the  Green  paper,  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 around 75,9 bn € (EU 27 9), showing the 
economic significance of the sector. On-line gambling services accounted for annual revenues 
in excess of € 6,16 bn, i.e. 7,5 % of the overall  gambling market. This on-line market is the 
fastest growing segment and is expected to double in size in five years10. 

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 States11.  

Figure 2 The 10 largest national on-line gambling markets in the EU in 2008 (GGR)12. 

It is also worth noting that, in 2008, the GGR for on-line gambling (national market) were €5 
million  or  below  in  six  Member  States :  Luxembourg  (5),  Lithuania  (2),  Estonia,  Latvia, 
Malta and Slovenia (1). 

9 
10 
11 
12 

H2 Gambling Capital for the European Commission (2008 figures).  
EGBA and H2 Gambling Capital, 2009, http://www.egba.eu/pdf/EGBA_FS_MarketReality.pdf  
See Report on retail Market monitoring, 5 July 2010 (COM(2010) 355 final) 
H2 Gambling Capital 

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Figure 3. Member States wheregross gambling revenues exceed 1% of the national GDP. 

Figure 4.  Proportion of  national gambling consumption attributable to  on-line gambling 

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1.4.  What are the most popular on-line gambling services in the EU27? 

The Green paper presents a pie-chart describing on-line player activities by product:  

Figure 5. Breakdown of the Gross Gambling Revenues by type of on-line gambling service (EU27) 

More detailed information by Member State is presented below13: 

Online (Player Activity) GGR by Product Vertical (€m (%)) 

Member State 

Sportsbetting 
(inc. Horses) 

Casino 
Games 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Rep 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 

92 (55%) 
8 (17%) 
4 (40%) 
2 (31%) 
9 (43%) 
38 (15%) 
1 (47%) 
38 (13%) 
316 (53%) 
178 (25%) 
46 (37%) 
4 (24%) 
53 (36%) 
346 (51%) 
<1 (43%) 
<1 (25%) 
<1 (8%) 
<1 (7%) 
21 (15%) 
4 (16%) 
9 (22%) 
4 (32%) 
1 (11%) 
<1 (36%) 
61 (16%) 
173 (30%) 

22 (13%) 
22 (48%) 
4 (41%) 
3 (46%) 
5 (26%) 
34 (14%) 
<1  (5%) 
35 (12%) 
94 (16%) 
242 (34%) 
61 (48%) 
6 (34%) 
46 (31%) 
184 (27%) 
<1 (7%) 
<1 (5%) 
4 (86%) 
1 (76%) 
41 (28%) 
8 (29%) 
21 (52%) 
4 (36%) 
<1 (2%) 
<1 (6%) 
66 (18%) 
84 (15%) 

Poker 

8 (5%) 
8 (17%) 
2 (19%) 
1 (18%) 
6 (30%) 
56 (22%) 
1 (46%) 
18 (6%) 
71 (12%) 
124 (18%) 
17 (14%) 
5 (29%) 
24 (16%) 
99 (15%) 
<1 (45%) 
1 (66%) 
<1 (5%) 
<1 (16%) 
55 (38%) 
11 (44%) 
9 (21%) 
3 (29%) 
1 (19%) 
<1 (55%) 
93 (25%) 
151 (26%) 

Bingo 
(including 
Side Games) 
3 (1%) 
8 (18%) 
<1 (1%) 
<1 (6%) 
<1  (1%) 
3 (1%) 
<1  (3%) 
58 (20%) 
28 (5%) 
23 (3%) 
1 (1%) 
<1 (2%) 
25 (17%) 
14 (2%) 
<1 (6%) 
<1 (4%) 
<1 (1%) 
<1 (1%) 
6 (4%) 
3 (11%) 
2 (6%) 
<1 (3%) 
<1 (3%) 
<1 (3%) 
153 (41%) 
100 (17%) 

State Lottery 

42 (25%) 
0 (0%) 
0 (0%) 
0 (0%) 
0 (0%) 
119 (48%) 
0  (0%) 
145 (49%) 
93 (15%) 
137 (19%) 
0 (0%) 
2 (11%) 
0 (0%) 
35 (5%) 
0 (0%) 
0 (0%) 
<1 (0%) 
0 (0%) 
22 (15%) 
0 (0%) 
0 (0%) 
0 (0%) 
4 (66%) 
0 (0%) 
0 (0%) 
68 (12%) 

13  

H2 Gambling capital (figures for 2008) 

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UK 
Total EU 27 

527 (28%) 
1.942 

428 (22%) 
1.423 

363 (19%) 
1.135 

310 (16%) 
741 

275 (14%) 
944 

1.5  Gambling and the Consumer Market Monitoring Survey14 

The  Green  paper  refers  to  the  annual  Consumer  Market  Monitoring  Survey,  in  which  the 
market for gambling services (online and offline) is one of the 50 markets. The market is rated 
in  the  middle  area  (29th  out  of  50  included  markets)  as  regards  market  performance.  The 
figures  below  are  extracted  from  the  annual  Consumer  Market  Monitoring  Survey  (see  also 
section  1.2  of  the  Green  paper).  The  overall  MPI  (Market  Performance  Indicator)  score  per 
market  is  the  combination  of  seven  individual  dimensions  which  have  been  incorporated  in 
this survey.  

Figure 6. Gambling services and the market performance (high score means better market performance) 

The  consumer  ranking  for  "comparability"  as  regards  gambling  services  is  relatively  high, 
Comparability is a key component in market performance indication as it captures how easy 
or  difficult  it  is  for  a  consumer  to  compare  products  or  services  in  a  given  market  and 
implicitly  covers  price  and  quality  comparison.  Comparability  is  rather  well  evaluated  by 
consumers  with  an  overall  score  of  7,1  on  a  10  point  scale.  The  markets  showing  the  best 
performance on this dimension are generally fast moving product categories (such as drinks, 
personal care products...) and home equipment markets (small or large household appliances). 

14  

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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Figure 7. Gambling services and comparability  

The rating for "trust" is average and the rating for problems "experienced" is much lower 
than  the  average.  The  overall  rating  for  whether  the  product  lived  up  to  what  the  consumer 
wanted is rather low but this is perhaps not unexpected given the nature of the product. 

Figure 8. Extract from the annual Consumer Market Monitoring Survey (see section 1.2 of the Green paper) 

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2. 

SECONDARY LEGISLATION, NOTIFICATIONS AND CASE LAW 

2.1. 

EU secondary legislation relevant to on-line gambling  

As  regards  secondary  European  law,  gambling  services  are  not  regulated  by  sector-specific 
regulation  at  EU  level  but  nevertheless  are  subject  to  a  number  of  EU  acts.  In  other  cases 
gambling  services  have  been  explicitly  excluded  from  the  scope  of  EU  law.  In  addition  to 
benefiting from horizontal rules such as those pertaining to IPR protection, the following texts 
are  noteworthy  in  this  respect.15:  the  Audiovisual  Media  Services  Directive16,  the  Unfair 
Commercial  Practices  Directive17,  the  Distance  Selling  Directive18,  the  Anti-Money 
Laundering  Directive19,  the  Data  Protection  Directive20,  the  Directive  on  privacy  and 
electronic  communication21,  the  e-commerce  Directive22  and  the  Directive  on  the  common 
system of value added tax23. 

The  Audiovisual  Media  Services  Directive  (AVMSD)24  aims  at  coordinating  certain 
provisions laid down by law, regulation or administrative action in Member States concerning 
the provision of audiovisual media services. Gambling offers, where any audiovisual content 
is merely incidental to the service and not its principal purpose, are not considered AVMS.  

The Unfair Commercial Practices Directive (UCPD)25 aims at protecting consumers from 
unfair  practices  which  are  likely  to  induce  a  transactional  decision  which  they  would 
otherwise  not  have  taken.  Common  rules  and  principles  provide  consumers  with  protection 
against unfair practices whether they are buying from their corner shop or purchasing from a 
website based abroad. Businesses can advertise and market to all consumers in the EU, in the 
same  way  as  to  their  domestic  customers.  Although  the  UCPD  is  without  prejudice  to 
authorisation  regimes  such  as  the  rules  related  to  gambling  activities,  advertising  and 
marketing practices fall within its scope. As a consequence, gambling advertising falls foul of 
the  Directive  if  it  is  contrary  to  the  requirements  of  professional  diligence  and  if  it  is 
distorting the economic behaviour of the average customer or a clearly identifiable group with 
an underlying vulnerability, e.g. minors, where the gambling provider can reasonably expect 
such  a  distortion.  The  UCPD  bans  in  particular  misleading  and  aggressive  commercial 
practices. 

The Distance Selling Directive26 applies to most contracts where a consumer and a supplier 
running an organised distance-selling scheme do not meet face-to-face at any stage until after 
the  contract  has  been  concluded.  "Distance  communication"  includes  traditional  means  of 
distance  communication  but  also  covers  more  technologically  advanced  means  of  distance 

15  
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 

For a more complete listing of EU secondary legislation, see "Staff working document, section II" 
OJ L 95, 15.04.2010, 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, 31.07.2002, p. 37. 
OJ L 178, 17.07.2000, p. 1. 
OJ L 347, 11.12.2006, p. 1. 
OJ L 95, 15.04.2010, p. 1. 
OJ L 149, 11.6.2005, p. 22. 
OJ L 144, 4.6.1997, p. 19. 

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communication such as teleshopping, mobile phone commerce (m-commerce), and the use of 
the internet (e-commerce). The Directive provides a number of rights for consumers in order 
to  ensure  consumer  protection  throughout  the  EU,  including  provision  of  comprehensive 
information before the purchase, right of withdrawal, protection from unsolicited selling and 
protection from fraudulent use of payment cards. Article 6(3) however excludes the right of 
withdrawal  for  contracts  for  gaming  and  lottery  services,  unless  the  parties  have  agreed 
otherwise27. 

The  Anti-Money  Laundering  Directive  (AMLD)28  requires  certain  institutions  and 
businesses to apply a series of preventive measures with a view to prevent money laundering 
and terrorist financing. For the gambling sector the AMLD explicitly covers casinos. Member 
States can however extend the rules to other categories of undertakings with a particular risk 
to  be  used  for  money  laundering  and  terrorist  financing  purposes.  Those  subject  to  the 
Directive are obliged to: 

– 

– 

– 

verify the identity of their customer and to monitor their business relationship with 
the customer (casino customers must be identified and their identity verified if they 
purchase or exchange gambling chips with a value of EUR 2000 or more); 

report suspicions of money laundering or terrorist financing to the public authorities; 
and 

take  supporting  measures,  such  as  ensuring  a  proper  training  of  personnel  and  the 
establishment of appropriate internal preventive policies and procedures.  

Competent authorities should ensure that the persons who effectively direct or will direct the 
business of such entities and the owners of such entities are fit and proper persons. 

It  furthermore  imposes  enhanced  due  diligence  procedures  in  certain  situations  which  carry 
higher  risks  of  money  laundering,  e.g.  where  the  customer  has  not  presented  himself 
physically. 

The  Data  Protection  Directive29  and 
the  Directive  on  privacy  and  electronic 
communication30 provide for the legal data protection legal framework in the EU. The Data 
Protection  Directive  sets  out  the  general  framework  for  the  protection  of  individuals  with 
regard  to  the  processing  of  personal  data  and  the  free  movement  of  such  data  while  the 
Directive  on  privacy  and  electronic  communication  contains  specific  rules  on  processing  of 
personal  data  and  the  protection  of  privacy  in  the  electronic  communications  sectors,  and 
regulates  areas  such  as  confidentiality,  billing  and  traffic  data,  rules  on  spam/unsolicited 
commercial communications, cookies,  etc. For gambling services these rules not only cover 
static  data  such  as  contact  or  financial  information  but  also  behavioural  data,  like  gambling 
frequency and pattern or the stake. 

27 

28 
29 
30 

With  the  proposal  for  a  Directive  on  Consumer  Rights  (COM  (2008)  614  final)  this  directive  is 
currently under review. 
OJ L 309, 25.11.2005, p. 15. 
OJ L 281, 23.11.1995, p. 31. 
OJ L 201, 31.07.2002, p. 37 as amended by Directive 2009/136/EC, (OJ L 337, 18.12.2009, p .11. 

EN 

14 

   EN 

 
                                                 
The  e-commerce  Directive31  excludes  in  Article  1(5)(d)  gambling  activities  which  involve 
wagering  a  stake  with  monetary  value  in  games  of  chance,  including  lotteries  and  betting 
transactions from the scope of the directive. 

Article 135(i) of the Directive on the common system of value added tax32 exempts betting, 
lotteries and other forms of gambling, subject to the conditions and limitations laid down by 
each Member State, from the common system of value added tax. This however means that, 
in practice, a margin of discretion is available to Member States and in practice, not all forms 
of  winnings  from  gambling  are  exempt  in  all  Member  States.  In  some  cases,  the  tax 
exemption  extends  only  to  a  limited  number  of  forms  of  gambling  (typically  lotteries  and 
some  forms  of  betting)  and  in  practice  it  may  not  specifically  cover  all  forms  of  on-line 
gambling. 

2.2. 

Case law relating to Internal Market rules and gambling services- an overview 

2.2.1. References for preliminary rulings: 

Judgment of 24/3 1994, Schindler, C-275/92, ECR [1994] I-01039,     

Judgment of 21/9 1999, Läärä and others, C-124/97, ECR [1999] I-06067  

Judgment of 21/10 1999, Zenatti, C-67/98, ECR [1999] I-07289 

Judgment of 11/9 2003, Anomar and others, C-6/01, ECR [2003] I-8621  

Judgment of 6/11 2003, Gambelli and others , C-243/01, ECR [2003] I-13031   

Judgment of 13/11 2003,Lindman, C-42/02  ECR [2003] I-13519,  

EN FR DE 

EN FR DE 

EN FR DE 

EN FR DE 

EN FR DE 

EN FR DE 

Judgment of 6/3 2007, Placanica & others, C-338/04, C-359/04 & C-360/04, ECR [2007] I-1891       EN FR DE 

Judgment of 8/9 2009, Liga portuguesa (Santa Casa), case C-42/07, ECR [2009] I-7633 

EN FR DE 

Judgment of 3/6 2010, Sporting exchange (Betfair) Cases C-203/08, ECR [0000] I-0000  

EN FR DE 

Judgment of 3/6 2010, Ladbrokes, Case C-258/08, ECR [0000] I-0000    

EN FR DE 

Judgment of 8/7 2010, Sjöberg and Gerdin, C-447 & 448/08, ECR [0000] I-0000 

EN FR DE 

Judgment of 8/9 2010, Winner Wetten, C-409/06, ECR [0000] I-0000   

Judgment of 8/9 2010, Markus Stoss C-316/07 etc, ECR [0000] I-0000  

Judgment of 8/9 2010, Carmen media, C-46/08, ECR [0000] I-0000    

Judgment of 9/9 2010, Engelmann, C-64/08, ECR [0000] I-0000   

EN FR DE 

EN FR DE 

EN FR DE 

EN FR DE 

31 
32 

OJ L 178, 17.07.2000, p. 1. 
OJ L 347, 11.12.2006, p. 1. 

EN 

15 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
                                                 
2.2.2 Pending cases (Article 267 TFEU) 

–  Case C-212/08, Reference for a preliminary ruling from the Conseil d'État (France) lodged on 21 May 2008 - 
Société Zeturf Limited v Premier ministre, Ministre de l'Agriculture et de la Pêche, Ministre de l'Intérieur, 
de  l'Outre-mer  et  des  Collectivités  territoriales,  Ministre  de  l'Économie,  de  l'Industrie  et  de  l'Emploi  - 
intervening party: G.I.E. Pari Mutuel Urbain (PMU)33 

–  Case  C-347/09,Reference  for  a  preliminary  ruling  from  the  Bezirksgericht  Linz  (Austria)  lodged  on  31 

August 2009 - Criminal proceedings against Jochen Dickinger, Franz Ömer34  

–  Cases  C-72/10  and  C-77/010,  Reference  for  a  preliminary  ruling  from  the  Corte  Suprema  di  Cassazione 
(Italy) lodged on 9 February 2010 - Criminal proceedings against Marcello Costa (C-72/10) and Ugo Cifone 
v Giudice delle indagini preliminari del Tribunale di Trani (C-77/10)35 

–  Joined cases C-164/10 to C-176/10, Reference for a preliminary ruling from the Tribunale Amministrativo 
Regionale  del  Lazio  (Italy)  lodged  on  2  April  2010  -  Emanuele  Ferazzoli  and  others  v  Ministero 
dell'Interno36 

–  Case C-255/10, Reference for a preliminary ruling from the Tribunale di Roma (Italy), made on 23 March 

2010 - Criminal proceedings against Alessandro Sacchi37 

–  Case C-279/10, Reference for a preliminary ruling from the Tribunale del Riesame di Verbania (Italy) lodged 

on 4 June 2010 - Criminal proceedings against Matteo Minesi38 

–  Case C-501/10, Reference for a preliminary ruling from the Tribunale di Santa Maria Capua Vetere (Italy) 

lodged on 19 October 2010 - Public Prosecutor's Office v Raffaele Russo39 

2.2.3.  The  Commission's  cases  vs  Member  States  relating  to  gambling  (Article  258 
TFEU) 

The  following  cases  do  not  focus  on  the  free  movement  of  services  (Article  56  TFEU  (ex 
Article 49 TEU)) but concern gambling services: 

Judgment of 13/9 2007, Commission vs Italy, Case C-260/04, ECR [2007] I-7083 

EN FR DE 

Judgment of 26/10 2006, Commission vs Greece, Case C-65/05, ECR [2006] I-10341     

EN FR DE 

Judgment of 6/10 2009, Commission vs Spain, Case C-153/08, ECR [2009] I-9735  

EN FR DE 

2.2.4. EFTA Court rulings  

Judgment of 14 March 2007, EFTA Surveillance Authority v The Kingdom of Norway, Case E-1/06, EFTA 
Court Report 2007, p.11 

33  
34  
35  
36  
37  
38  
39  

OJ C 197 of 02.02.2008, p.12 
OJ C 282 of 21.11.2009, p.26 
OJ C 100 of 17.04.2010, p.27 
OJ C 161 from 19.06.2010, p.29-34 
OJ C 209 from 31.07.2010, p.27 
OJ C 209 from 31.07.2010, p.31 
OJ C 346 from 18.12.2010, p.34 

EN 

16 

   EN 

 
 
 
 
 
                                                 
Judgment of 30 May 2007, - Ladbrokes Ltd. v The Government of Norway, Ministry of Culture and Church 
Affairs and Ministry of Agriculture and Food, Case E-3/06,  EFTA Court Report 2007, p.89 

2.3. 

Application of state aid rules 

The  European  Commission  has  opened,  under  EU  state  aid  rules  (Articles  107  and  108 
TFEU), two formal investigations; 

–  Against  Denmark,  to  examine  whether  lower  taxes  for  online  casinos  in  comparison  to 
traditional casinos in Denmark could procure an anticompetitive advantage for such online 
casinos40.  Denmark  is  liberalising  its  gambling  markets  by  granting  licences  for  online 
gambling  providers.  Under  the  notification  provided  to  the  Commission  in  July  2010, 
online providers of casino games and gaming machines would be subject to a flat tax of 20 
% on the GGR compared with up to 75 % for land-based casinos and gaming halls. The 
Commission  has  doubts  at  this  stage  whether  the  differential  treatment  entails  an 
unjustified  competitive  advantage  for  online  casinos  as  compared  to  their  land-based 
"competitors". 

–  Against  France  to  examine  whether  a  parafiscal  tax  (levy)  to  finance  the  horse  racing 
companies  is  inline  with  competition  rules41  because  of  the  doubts  of  the  Commission 
regarding the qualification of the mission conferred on horseracing companies as a service 
of general economic interest. 

2.4. 

Research and Technological Development  

Section  2.3.1.  of  the  Green  paper  raise  a  number  of  issues  linked  to  consumer  protection, 
including addiction. The Commission has under its seventh framework programme (FP7) for 
Research and Technological Development published a call for proposals in the area of "Socio-
economic  Sciences  and  Humanities  –  Addictions  and  lifestyles  in  contemporary  European 
societies" that may cover gambling addiction42. Selected project(s) will be announced on the 
relevant Commission webpage43.   

2.5. 

Financing of benevolent and public interest activities 

The financing of benevolent and public interest activities as well as events on which on-line 
sports betting relies are addressed in section 2.3.3. of the Green paper. Two issues which are 
mentioned in that section are worthy of development: 

–  At  its  session  on  10  December  2011,  the  Council  "Competitiveness  (Internal  Market, 
Industry)"  adopted  Council  Conclusions  on  gambling  and  betting  recognising  that 

40  

41  
42  

43  

Case C35/2010, DA - Duties for online gaming in the Danish Gaming Duties Act. OJ C 22, 22.01.2011. 
and IP/19/1711. See also Staff working document Section 2.3. 
Case C34/2010, FR http://ec.europa.eu/competition/state_aid/cases/238410/238410_1168986_34_4.pdf  
OJ C177 of 30 July 2009, see also   
http://cordis.europa.eu/fp7/dc/index.cfm?fuseaction=UserSite.CooperationDetailsCallPage&call_id=252  
http://cordis.europa.eu/home_en.html  

EN 

17 

   EN 

 
 
                                                 
contributions, in particular from state lotteries or lotteries licensed by the competent state 
authorities play an important role for society, via for example the funding of good causes, 
directly or indirectly where applicable. The Council agreed that this specific role should be 
recognised in discussions at European level.44 

–  On  18  January  2011,  the  European  Commission  adopted  a  Communication  entitled 
"Developing the European Dimension in Sport". This is the first policy document issued by 
the Commission in the field of sport after the entry into force of the Lisbon Treaty, which 
gives the EU a mandate to support, coordinate and supplement sport policy measures taken 
by  Member  States.  This  Communication  refers  to  how  gambling  activities  directly  or 
indirectly contribute to the financing of sport.45 

2.6. 

Notifications 

More  than  150  draft  Acts  and  regulations  relating  to  gambling  have  been  notified  to  the 
Commission since January 200546. This figure includes notifications from 23 Member States 
(i.e. all but Bulgaria, Luxembourg, Lithuania and Portugal) and all three EFTA States. 

Figure 9. Notifications. Member States that have notified draft legislation relating to gambling services 
between 2005 and October 2010 (on left hand side). On the right hand side, the map shows Member 
States  that  notified  on-line  gambling  legislation  under  directive  98/48/EC  (Information  society 
services 2005-2009). 

44  
45  
46  

EN 

http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/intm/118398.pdf  
COM(2011) 12 final, see in particular section 3.2. and "Sustainable financing of sport". 
137  notifications  relating  to  gambling  were  notified  to  the  Commission  under  Directive  98/34/EC 
(amended 
also: 
http://ec.europa.eu/enterprise/tris/index_en.htm 

98/48/EC) 

between 

2010. 

2006 

See 

Oct 

and 

Jan 

by 

18 

   EN 

 
 
                                                 
Figure 10. Number of notifications by year.  

Total number of notifications 

- technical regulations (98/34/EC) 

- Info. Society services (98/48/EC) 

Detailed Opinions (Commission) 

Detailed Opinions (Member States) 

Comments (Commission) 

Comments (Member States) 

2005 

2006 

2007 

2008 

11 

9 

2 

1 

1 

4 

1 

19 

14 

5 

1 

1 

6 

3 

24 

19 

5 

3 

2 

6 

1 

30 

26 

4 

3 

2 

5 

1 

2009 
2347 

15 

7 

3 

2 

2 

4 

2010  

44 

/ 

/ 

/ 

/ 

/ 

/ 

Table 1. Overview – Notifications relating to gambling, in particular online gambling 

* * * 

47  

1 text confidential 

EN 

19 

   EN