COMMISSION STAFF WORKING DOCUMENT Online gambling in the Internal Market Accompanying the document Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions Towards a comprehensive framework for online gambling
Date: 2012-10-23
Institutions: European Commission
Subjects: State monopoly, administrative check, consumer protection, electronic commerce, freedom to provide services, game of chance, intergovernmental cooperation (EU), market organisation, single market, trade licence

EUROPEAN 
COMMISSION 

Strasbourg, 23.10.2012  
SWD(2012) 345 final 

COMMISSION STAFF WORKING DOCUMENT 

Online gambling in the Internal Market  

Accompanying the document 

Communication from the Commission to the European Parliament, the Council, the 
Economic and Social Committee and the Committee of the Regions  

Towards a comprehensive framework for online gambling 

{COM(2012) 596 final} 

 
 
 
  
 
 
 
  
 
TABLE OF CONTENTS 

1. 

Introduction......................................................................................................................... 4 

2.  Definition ............................................................................................................................ 6 

2.1.  Games of chance.......................................................................................................... 6 

2.1.1.  EU......................................................................................................................... 6 

2.1.2.  Member States...................................................................................................... 7 

2.2.  Online gambling .......................................................................................................... 7 

3.  The market for online gambling services in Europe, and beyond ...................................... 9 

3.1.  Global Market.............................................................................................................. 9 

3.2.  Gambling market in Europe ........................................................................................ 9 

3.3.  Cross-border dimension............................................................................................. 11 

3.4.  Technology ................................................................................................................ 13 

3.5.  Data and understanding ............................................................................................. 13 

4.  The regulatory situation in Europe and national frameworks........................................... 15 

4.1.  EU secondary legislation relevant to online gambling.............................................. 15 

4.2.  The notification procedure......................................................................................... 18 

4.3.  Regulatory framework for online gambling in Member States ................................. 19 

5.  EEA case-law on games of chance ................................................................................... 21 

5.1. 

Introduction ............................................................................................................... 21 

5.2.  The  organisation  of  games  of  chance  is  an  "economic  activity"  covered  by  the 
fundamental freedoms rules of the TFEU ............................................................................ 23 

5.3.  Restrictions on the free movement of services and the freedom of establishment.... 24 

5.4.  General interest reasons which may justify restrictions on gambling activities........ 27 

5.5.  The provision of gambling services via the Internet ................................................. 29 

5.5.1. 

Specific characteristics of on-line gambling ...................................................... 29 

5.5.2.  Taking  account  of  the  checks  on  operators  of  games  of  chance  carried  out  in 
other Member States ......................................................................................................... 30 

5.6.  General  criteria  for  assessing  the  proportionality  (suitability  and  necessity)  of 
national restrictions under different types of regulatory frameworks .................................. 31 

5.6.1.  A ban on games of chance.................................................................................. 32 

5.6.2.  An exclusive right/monopoly ............................................................................. 32 

5.6.3.  A system of licensing ......................................................................................... 41 

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5.7.  Assessing  the  proportionality  of  specific  corporate  requirements  imposed  on 
gambling operators ............................................................................................................... 45 

5.7.1. 

Seat requirements ............................................................................................... 45 

5.7.2.  Legal form for operators of games of chance .................................................... 47 

5.7.3.  Minimum share capital requirements ................................................................. 47 

5.8.  Application of State aid rules .................................................................................... 47 

6.  Administrative cooperation and efficient enforcement..................................................... 49 

6.1.  The regulatory authority ............................................................................................ 49 

6.1.1.  Role and competences of regulators................................................................... 50 

6.1.2. 

Institutional arrangements .................................................................................. 50 

6.2.  Administrative cooperation ....................................................................................... 50 

6.2.1.  Existing administrative cooperation................................................................... 51 

6.2.2.  Areas for administrative cooperation ................................................................. 52 

6.2.3.  Tools for administrative cooperation ................................................................. 54 

6.2.4.  Cooperation with other enforcement bodies and stakeholders........................... 56 

6.2.5.  Cooperation with third countries........................................................................ 57 

6.3.  Enforcement measures............................................................................................... 57 

6.3.1. 

Preventive enforcement measures ...................................................................... 57 

6.3.2.  Responsive enforcement measures..................................................................... 59 

7.  Protection of consumers and citizens, including minors and other vulnerable groups..... 67 

7.1.  The current framework .............................................................................................. 67 

7.2.  A safe and regulated offer to protect consumers ....................................................... 68 

7.2.1.  A Recommendation on common protection of consumers ................................ 70 

7.2.2.  The Commission Proposal on Electronic Identification .................................... 71 

7.2.3.  Consumer Survey of Gambling Services ........................................................... 73 

7.3.  The protection of minors ........................................................................................... 75 

7.3.1. 

Initiatives to protect minors................................................................................ 76 

7.4.  Responsible Advertising............................................................................................ 77 

7.4.1.  A Recommendation on Responsible Gambling Advertising ............................. 79 

7.5.  Problem-gambling and gambling addiction .............................................................. 80 

7.5.1.  Key challenges ................................................................................................... 82 

7.5.2.  EU Initiatives...................................................................................................... 86 

8.  Fight against fraud and money laundering........................................................................ 89 

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8.1.  Commission initiative on identity theft ..................................................................... 89 

8.2.  The EU Anti-Money Laundering Directive............................................................... 91 

8.3.  Certification of gambling equipment......................................................................... 92 

9. 

Integrity of sport and match fixing ................................................................................... 94 

9.1.  Existing anti-match fixing measures ......................................................................... 96 

9.2.  Criminalisation of match fixing................................................................................. 98 

9.3. 

International cooperation on match fixing................................................................. 99 

10. 

Financing Systems for benevolent and public interest activities ................................ 100 

10.1. 

Societal activities benefitting from revenue derived from gambling................... 101 

10.2. 

Sport, including horseracing: a main beneficiary ................................................ 102 

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1.  INTRODUCTION 

The online gambling services sector accounts for 10.9% of the gambling market share in the 
EU  with  a  growth  rate  for  2015  estimated  to  be  double  that  of  2008,  which  stood  at  €6.6 
billion. In parallel, online technology is developing at a face pace. A large number of Member 
States  has  engaged  in  a  review  of  gambling  legislation  particularly  over  the  last  few  years. 
Given the cross-border nature of online gambling improving and sustaining the protection of 
consumers  and  the  regulatory  environment  is  in  the  interest  of  all  Member  States.  This  is 
achievable by the Member States and the EU working together.  

Against  this  backdrop  the  Commission  launched  the  Green  Paper1  in  March  2011  primarily 
aimed  at  obtaining  a  facts-based  assessment  of  the  EU  online  gambling  market  and  of  the 
different national regulatory frameworks of the Member States. The consultation focused on 
six  key  interrelated  themes:  1)  Definition  and  organisation  of  online  gambling  services;  2) 
Rules  and  practices  relating  to  services  performed  and/or  used  by  online  gambling  service 
providers;  3)  Consumer  protection,  including  minors;  4)  Public  order  (fraud  and  money 
laundering);  5)  Financing  of  benevolent  and  public  interest  activities  and  events;  6) 
Enforcement of applicable laws.  

The responses to this consultation encompass close to 260 contributions from a diverse range 
of  stakeholders:  public  authorities,  commercial  and  public  operators,  intermediary  services 
providers (e.g. media, internet, data storage, payment) beneficiaries of societal organisations, 
researchers  and  academia.  An  overwhelming  majority  of  Member  States  contributed  to  the 
consultation. A Resolution2 was adopted by the European Parliament whilst the Economic and 
Social Committee adopted an Opinion3 on the Green Paper. 

The  Commission  services  complimented  the  consultation  with  five  thematic  workshops 
organised around key issues identified in order to benefit from the knowledge and experience 
of experts in the field. The workshops focused on sports integrity (fight against match-fixing), 
detection and prevention of problem gambling and gambling addiction, financing mechanisms 
regarding  public  interest  activities  benefitting  from  revenue  derived  from  gambling  and  the  
prevention of crime and enforcement.  

The  Commission  services  have  assessed  the  contributions  to  the  Green  Paper  in  detail  and 
have drawn from the resourceful information and valuable insight provided together with the 
workshop conclusions, the expert group meetings with the regulatory authorities of EU/EEA 
jurisdictions, meetings with stakeholders as well as other sources of information.  

Whilst the Green Paper focused on the online segment of gambling services and topics linked 
to the free movement of services (Article 56, Treaty on the Functioning of the EU), a number 
of these are pertinent to all forms of gambling services. 

1 Green Paper on online gambling in the Internal Market of 24 March 2011 (COM(2011)0128 final) 
2  European  Parliament  resolution  of  15  November  2011  on  online  gambling  in  the  Internal  Market 
(2011/2084(INI)). 
3  Opinion  of  the  European  Economic  and  Social  Committee  on  the  Green  Paper  on  online  gambling  in  the 
Internal Market COM(2011) 128 final 

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Finally,  the  supply  of  online  gambling  services  is  influenced  by  evolving  information  and 
communications  technology.  It  includes  forms  of  gambling  using  means  of  electronic  or 
distance communication such as digital TV, mobile phone technology, telephone and fax. 

It is within this context that the present staff working document addresses the challenges in 
the  EU.  The  staff  working  document  accompanies  the  Communication  "Towards  a 
comprehensive  European  framework  for  online  gambling".  The  Action  Plan,  seeking  to 
enhance legal clarity and establish policies based on evidence, identifies the prevailing issues 
across the Member States, examines the shortcomings and explores solutions for: 

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- 
- 
- 

compliance of national regulatory frameworks with EU law  
enhancing administrative cooperation and efficient enforcement 
protecting consumers and citizens, minors and vulnerable groups 
preventing fraud and money laundering 
safeguarding the integrity of sports and preventing match-fixing 

This  document  is  structured  along  these  parameters,  substantiating  the  issues  and 
shortcomings as well as the mix of actions being proposed to strengthen the impetus to tackle 
the  shared  challenges.  In  addition,  this  document  delves  into  the  definitions,  the  market  for 
online gambling services, the regulatory situation in Europe, the fundamental principles of the 
EU Treaty and the financing systems for public interest activities. The evidence in the report 
stems from the Green Paper public consultation; case-law of the Court of Justice of the EU 
and the EFTA Court, and other sources referred to earlier.  

The proposed list of actions and the timeframes for taking forward the initiatives in this area 
can be found in the Action Plan.  

The  summary  of  replies  to  the  Green  Paper  consultation  is  published  alongside  the 
Communication and this staff working document. All the non-confidential contributions and 
the conclusions of the workshops can be consulted on the Commission website4.  

This  is  an  indicative  document  of  the  Commission  services,  which  cannot  be  considered  in 
any  way  binding  on  the  Commission  as  an  institution,  and  it  is  without  prejudice  to  the 
interpretation of EU law by the Court of Justice of the European Union. 

4 http://ec.europa.eu/internal_market/services/gambling_en.htm 

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2.  DEFINITION 

The term "online gambling" refers to a range of different gambling services and distribution 
channels5. Definitions at national level vary or do not exist.  

The  term  "games  of  chance"  when  the  activity  is  offered  online  can  cover  a  number  of 
different gambling services, such as 
• 
• 
• 
• 

Betting services (including horse and dog racing, event betting and pool competitions), 
Poker and casino services, 
Bingo services, 
Gambling  services  operated  by  and  for  the  benefit  of  recognised  charities  and  non-
profit making organisations, 
Lottery services, 
Media gambling services (i.e. games in the editorial content of the media), 
Sales  promotion  services  consisting  of  promotional  games  with  a  prize  or  where 
participation is exclusively linked to purchase. 

• 
• 
• 

It is not only the cooperation between gambling authorities and the exchange of information 
that  depends  on  a  common  understanding  of  what  online  gambling  means  but  also  the 
development  of  policy  initiatives  and  actions  online.  In  order  to  ensure  a  successful  and 
sustainable policy such common understanding therefore needs to be established in the EU.  

2.1. Games of chance 

2.1.1.  EU 

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  Electronic  Commerce 
Directive6: 

"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  Directive7  and  most  recently  in  the  Audiovisual  Media 
Services  Directive8  a  slightly  different  definition  is  "games  of  chance  involving  a  stake 
representing  a  sum  of  money,  including  lotteries,  betting  and  other  forms  of  gambling 

5 See below Chapter 3 paragraph 4. 
6 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of 
information society services, in particular electronic commerce, in the Internal Market ('Directive on electronic 
commerce'). 
7 Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the 
internal market 
8 Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of 
certain  provisions  laid  down  by  law,  regulation  or  administrative  action  in  Member  States  concerning  the 
provision of audiovisual media services (Audiovisual Media Services Directive) 

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services". While the Anti-Money Laundering Directive9 refers to the term 'casino' it does not 
define it. 

To date, the Court of Justice of the European Union (CJEU) in its rulings on games of chance 
has  not  given  specific  guidance  on  the  interpretation  of  the  definitions  used  in  secondary 
legislation10. 

2.1.2.  Member States 

While not all Member States have a legal definition of the concepts of “games of chance” and 
of  “gambling”,  in  most  jurisdictions  a  game  of  chance  is  defined  as  a  game  that  offers  an 
opportunity  to  compete  for  prizes,  where  success  depends  completely  or  predominantly  on 
coincidence or an unknown future result and cannot be influenced by the player. At least one 
of  the  players  loses  his  or  her  stake.  The  first  important  element  characterising  a  game  of 
chance  is  that  of  stake  money  or  monetary  value.  The  second  essential  characteristic  of  a 
game  of  chance  is  the  element  of  chance.  Success  or  loss  must  depend  completely  or 
predominantly  on  coincidence  and  not  on  abilities  and  knowledge.  Success  is  considered  to 
depend  in  any  case  on  coincidence,  if  the  relevant  aspect  is  the  occurrence  of  an  uncertain 
event. 

In order to avoid that certain games are not covered by the definition because a skill element 
can prevail in playing a particular game and therefore risking that a common policy would be 
incoherent, the understanding of games of chance should also comprise games of chance and 
skill. This concerns games where the result is not totally accidental but depends, to a certain 
extent  on  the  skill  and/or  knowledge  of  the  participant  (such  as  poker  or  sports  betting). 
However, the distinction between games of chance and skill and games of skill is not always 
easy to make and has been subject to numerous court proceedings at national level.  

2.2. Online gambling  

Many Member States do not yet have a definition of online gambling at national level. In the 
Green Paper contributions Member States and stakeholders alike stressed that there is a need 
for any definition to encompass all forms of gambling and all forms of electronic or distance 
communication,  such  as  internet,  mobile  phone,  digital  TV.  A  number  of  jurisdictions 
therefore  do  not  refer  to  online  gambling  but  to  remote  gambling  in  order  to  have  a  more 
technology neutral term given evolving information and communications technologies. 

Gambling  services  offered  by  the  media  are  typically  covered  by  national  gambling  laws. 
Generally no distinction is made between gambling and promotional games if these fulfil the 
conditions of application of the respective gambling law  (stake,  prize, random  outcome). In 
some  cases  specific  rules  for  commercial  communication  games  are  laid  down  in  the 
gambling law. In other cases Member States have specific rules in their consumer protection 
regulations  or  have  established  specific  acts  or  codes  of  conduct  for  promotional  games. 

9 Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of 
the use of the financial system for the purpose of money laundering and terrorist financing 
10 See for the notion "games of chance" and the application of primary EU law below, Chapter 5. 

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Promotional games not involving a stake but promoting other games of chance may also fall 
within the scope of the national gambling law.  

In the Green Paper on online gambling in the Internal Market the Commission took the view 
that  the  definition  as  set  down  in  the  e-Commerce  Directive  should  be  maintained  for 
gambling  and  that  it  should  be  combined  with  that  for  information  society  services  as  set 
down  in  Directive  98/34/EC,  as  amended  by  Directive  98/48/EC11.  In  this  respect,  the 
following common definition for online gambling services should be applied as defining the 
scope of the consultation: 

Online  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  request  of  a 
recipient of services. 

Most  responses  to  the  Green  Paper  consultation  supported  this  definition  as  a  basis  for 
discussions at European level. At the same time some respondents raised concern that such a 
definition  is  too  restrictive,  in  particular  because  of  the  criteria  "individual  request  of  a 
recipient of services", and would incorrectly exclude certain activities from the term "online 
gambling".  

The Commission services will, together with the Member States, further develop a common 
understanding of types of games and the means of electronic or distance communication used 
to be covered by the term "online gambling".  

11 Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure 
for the provision of information in the field of technical standards and regulations 

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3.  THE  MARKET  FOR  ONLINE  GAMBLING  SERVICES  IN  EUROPE,  AND 

BEYOND  

The  gambling  sector  is  a  growing  market,  both  land  based  and  online.  In  2011,  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  €84.9 
billion  (EU  27),  with  an  average  annual  growth  rate  of  2.8%.  Online  gambling  services 
accounted  for  annual  revenues  in  excess  of  €9.3  billion,  10.9%  of  the  overall  gambling 
market. The average annual growth rate for online gambling services is 14.7%. In 2015 online 
gambling  is  estimated  to  generate  annual  revenues  of  €13.0  billion,  14.2%  of  the  overall 
gambling market12. 

Online gambling is not only developing at a rapid pace economically but also technologically. 
Gambling services are increasingly used and offered on mobile phones, tablet computers and 
IPTV.  Furthermore,  gambling  operators  are  also  using  and  relying  on  business-to-business 
services  (B2B)  and  intermediaries,  for  managing  gambling  platforms,  providing  software, 
payment services, internet services or marketing.  

The  consistent  growth  of  the  market  fuels  the  need  for  a  comprehensive  and  technology 
neutral  set  of  rules  and  measures  at  EU  and  national  level.  New  technologies  create  new 
challenges and regulation needs to adapt to keep up the pace.  

3.1. Global Market 

In 2010 the global gambling market (land-bases and online) generated GGR of €275 billion. 
With a GGR of €80 billion the EU had a market share of 29% of the world market. The total 
global  internet  gambling  market  (all  products)  was  worth  €23.28  billion.  The  EU  online 
gambling market represented 45% of the world market share.  

Worldwide  online  gambling  profits  (GGR)  amounted 
in  2008. 
Approximately,  €4.7  billion  of  this  total  comes  from  the  6.84  million  European  consumers 
who participate  in  online  gambling  (compared to 4.32 million consumers in Asia & Middle 
East and 4.21 million consumers in North America). 

to  €16.39  billion 

Asia is the fastest growing market. It is already bigger ten the European market and will most 
probably  soon  overtake  the  US  as  the  biggest  gambling  market  in  the  world.  The  US  is 
currently debating and preparing the opening of the online gambling market.  

3.2. Gambling market in Europe 

The overall gambling market in Europe is growing, both land-based and online. Lotteries and 
gambling machines remain the biggest sectors in the overall gambling market.  

12 H2 Gambling Capital 

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Source: H2 Gambling Capital 

The online gambling market is growing though at a faster pace. With annual growth rates of 
almost 15% the market will most probably double in size between 2008 and 2013. However, 
with  a  market  share  of  10.9%  online  gambling  is  still  a  relatively  small  part  of  the  overall 
market.  

Source: Global Betting and Gaming Consultants (GBGC), year? 

Compared  to  the  overall  gambling  market  the  online  gambling  market  shares  are  slightly 
different. Betting is the biggest sector followed by poker and casino games.  

10 

 
 
 
 
Source: H2 Gambling Capital 

The  size  of  the  online  gambling  market  differs  significantly  between  Member  States.  In 
Austria, Denmark, Finland, Ireland, Sweden and the UK online gambling already constitutes 
20% or more of the overall gambling market.  

Source: H2 Gambling Capital 

3.3. Cross-border dimension 

In  many  Member  States  no  data  exists  on  the  scale  of  the  cross-border  gambling  market. 
Member  States  stress  that  it  is  difficult  to  quantify  the  cross-border  dimension  of  online 

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gambling  services  as  these  services  are  very  often  not  regulated  in  the  respective  Member 
State.  A  number  of  Member  States  however  have  conducted  studies  and  surveys  whilst  for 
others third party studies are available: 

• 

• 

In  the  UK  the  regulator  concludes  that  players  appear  to  gamble  on  UK  regulated  sites. 
There is little, if any evidence, of an unauthorised market.  
In Sweden the number of players gambling with foreign operators is growing: from 3% of 
the population in 2008/2009 to 4.5% in 2009/2010. 29% respectively 38% of the players 
was gambling only with foreign operators. The market share of foreign online operators is 
estimated to be 10% of the overall gambling market.13 150 foreign commercial operators 
are  estimated  to  be  active  in  the  market.  Their  marketing  expenses  rose  from  SEK  437 
million in 2000 to SEK 1.6 billion in 2010. Licensed non-EU operators are only a small 
proportion of the total online market.  

• 

• 

•  The  government  estimates  the  turnover  of  the  unauthorised  sports  betting  market  in 
Germany (land-based and online) to be at least €2.7 bn (€350 million GGR), about 60% is 
generated  online.  Germany  is  considered  to  be  the  biggest  cross-border  online  poker 
market in the EU with a market size of around €320 million and almost 600 000 players.14 
In  Finland  the  value  of  gambling  on  foreign  sites  totalled  €120  million  in  2008  (betting 
€40  million,  casino  games  €40  million,  poker  €30  million  and  bingo  €10  million)15.  In 
2009  the  total  amount  of  sports  betting  by  players  located  in  Finland  using  service 
providers outside Finland was approximately €50 million16.  
In France regular data collection and reporting has been introduced by the new gambling 
law in 2010 and studies are under preparation. Previously unlicensed operators now have 
a market share of 65% for betting, 12% for horse racing, 90% for casino in the regulated 
market. Out of 35 operators that have been issued a licence since the introduction of the 
new law 14 operators already had a license from another Member State and 12 are part of 
a group with a license in another Member State.  
In Greece government estimates that around 250 unauthorised online gambling sites, 60 of 
which have Greek language versions, are active in the country. 20 000 gaming machines 
and  150  000  computers  in  public  places  are  offering  unauthorised  online  games.  The 
annual turnover of illegal online betting in Greece is estimated to reach €2 billion, equal 
with  brick  and  mortar  betting  of  state  monopoly.  Also,  the  turnover  in  the  betting 
exchanges, illegal poker and casino games reaches a €1.5 - 2 billion.  
In  2008  1  million  Dutch  citizens  used  unauthorised  gambling  services.  5.1%  of  the 
population or 500 000 citizens gamble online; with an average stake of €12-1317. 

• 

• 

13 SWELOGS population study 

14 Online Poker in the European Union; Ingo Fiedler, Ann‐Christin Wilcke; University of Hamburg. 

15 TNS Gallup survey, 2008 
16 The Atlas Survey, 1-6/2009 
17 "The nature and scale of illegal gaming in the Netherlands", Ministry of Justice, November 2009 

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• 

• 
• 

In Slovenia the number of players placing sports bets with foreign operators has increased 
in  comparison  with  previous  years  while  the  number  of  players  gambling  in  casinos  or 
playing  the  lottery  decreased.  An  increasing  number  of  players  from  Slovenia  are 
gambling  with  foreign  online  gambling  providers  (almost  40%  of  those  surveyed),  for 
example betting an average of over €30 during the 2010 World Cup in South Africa18 
In Slovakia the government estimates that 90% of online players gamble on foreign sites. 
In  2010  380  000  Norwegians  gambled  online;  55%  only  in  Norway,  25%  only  with 
foreign  operators,  20%  both.  The  total  turnover  amounted  to  NOK  7.2  billion  while 
foreign  sites  only  generated  NOK  5  billion  (suggesting  that  players  set  higher  stakes  on 
foreign sites)19. 

3.4. Technology 

The change in information and communications technology is also influencing the supply of 
online gambling services. Online gambling does not only include gambling services offered 
and  used  on  the  internet  but  any  type  of  gambling  using  a  means  of  electronic  or  distance 
communication  (including  digital  interactive  TV,  mobile  phone  technology,  telephone  and 
fax). 

The provision of remote gambling services through mobile telephone technologies is gaining 
popularity  and  market  share.  In  France  for  example  the  number  of  players  using  mobile 
phones and tablets has doubled for sports betting, and tripled for poker from 2011. Within a 
year the number of players using mobile phones for sports betting and poker increased to 15 
%. 12% of all horseracing bets are done via mobile phones20. Digital interactive TV seems to 
be an obvious distribution channel for gambling services and with the development of Digital 
interactive TV services the offer of gambling services through this channel will most probably 
increase.  

The  gambling  platform  hosting  the  online  game  of  chance  is  not  necessarily  provided  and 
managed  by  the  gambling  operator  dealing  with  the  player  but  will  often  be  managed  and 
provided  by  a  different  operator.  The  platform  operator  is  providing  B2B  services  to  the 
gambling  operator  offering  the  game  to  the  player.  It  is  rather  common  that  the  platform  is 
established and authorised in a different jurisdiction than that of the gambling operator. The 
possible  take-up  of  cloud  computing  solutions  in  the  gambling  sector  may  add  further 
complexity to this situation. A new and important development is also the offering of games 
of chance for money or money's worth in social media networks. 

3.5. Data and understanding 

While data and information exist for some markets a comprehensive overview of the market 
is  missing.  There  is  a  need  for  further  information  on  the  size  and  the  development  of  the 

18  Research  study  on  Gambling  in  Slovenian  households,  with  emphasis  on  internet  gambling,  FIHO,  August 
2011 
19 Regular survey of the Norwegian Gaming Authority 
20 Quarterly analysis of the online games market in France 1st quarter 2012, ARJEL 

13 

 
 
                                                 
online  gambling  market  (domestic  and  cross-border,  intra  EU  and  global,  authorised  and 
unauthorised offer). Furthermore, there is a need for a better understanding of the market (in 
Europe and globally), its dynamics and the technological challenges.  

The Commission services will, together with Member States and all stakeholders concerned, 
discuss  and  develop  means  of  improving  statistics  on  online  gambling  services  and  of 
fostering understanding of the technological and market developments.  

14 

 
 
 
4.  THE  REGULATORY 

SITUATION 

IN  EUROPE  AND  NATIONAL 

FRAMEWORKS 

Gambling  services  are  not  regulated  by  sector-specific  regulation  at  EU  level.  Nevertheless 
gambling services are subject to a number of EU acts. In other cases gambling services have 
been explicitly excluded from the scope of EU law. 

The regulatory situation at national level shows a very diverse picture across the EU. Member 
States have regulated online gambling services in very different ways,: by banning them, by 
establishing a monopoly for the offering of online gambling services or by issuing licences for 
the operation of these services. Few Member States do not have any rules at all covering this 
service activity. 

4.1. EU secondary legislation relevant to online gambling 

In addition to benefiting from horizontal rules such as those pertaining to Intellectual Property 
Rights (IPR) protection, the following texts are relevant to online gambling: the Audiovisual 
Media  Services  Directive,  the  Unfair  Commercial  Practices  Directive,  the  Distance  Selling 
Directive, the Directive on Consumer Rights, the Anti-Money Laundering Directive, the Data 
Protection Directive, the Directive on privacy and electronic communication, the e-commerce 
Directive and the Directive on the common system of value added tax. 

The  Audiovisual  Media  Services  Directive  (AVMSD)21  aims  at  coordinating  certain 
provisions  laid  down  by  law,  regulation  or  administrative  action  in  the  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)22 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. 

21 Directive 2010/13/EU. 
22  Directive  2005/29/EC  of  the  European  Parliament  and  of  the  Council  of  11  May  2005  concerning  unfair 
business-to-consumer commercial practices in the internal market 

15 

 
 
                                                 
The Unfair Contract Terms Directive23 aims to protect European consumers against unfair 
terms in the contracts they conclude with professionals. It introduces a notion of "good faith" 
in order to prevent significant imbalances in the rights and obligations of consumers  on the 
one  hand  and  sellers  and  suppliers  on  the  other  hand.  This  general  requirement  is 
supplemented by a list of examples of terms that may be regarded as unfair. Terms that are 
found unfair under the Directive are not binding for consumers. The Directive also requires 
contract terms to be drafted in plain and intelligible language and states that ambiguities will 
be interpreted in favour of consumers. 

The Distance Selling Directive24 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 
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 
otherwise. The Directive will be repealed once the rules of the Directive on Consumer Rights 
will  have  to  be  applied  in  all  Member  States,  i.e.  by  13  June  2014.  The  Directive  on 
Consumer Rights incorporates the provisions of the Distance Selling Directive. 

The Directive on Consumer Rights25 aims at achieving a real business-to-consumer (B2C) 
internal market, striking the right balance between a high level of consumer protection and the 
competitiveness of enterprises. The Directive contains requirements on the information to be 
provided  by  traders  prior  to  the  conclusion  of  all  consumer  contracts,  provides  for  specific 
information  requirements  and  regulates  the  right  of  withdrawal  distance  and  off-premises 
contracts and for rules on delivery and passing of risk applicable to contracts for the sale of 
goods  as  well  as  certain  rules  applicable  to  all  types  of  consumer  contracts.  These  include 
rules on the costs for the use of means of payment (e.g. credit or debit cards), on telephone 
hotlines  operated  by  traders  as  well  as  on  additional  payments  and  pre-ticked  boxes.  In 
comparison with the Distance Selling Directive, the Directive on Consumer Rights however 
does not apply anymore to contracts for gambling (Article 3(3), sub (c)).  

The  Anti-Money  Laundering  Directive  (AMLD)26  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 

23 Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts 
24  Directive  97/7/EC  of  the  European  Parliament  and  of  the  Council  of  20  May  1997  on  the  protection  of 
consumers in respect of distance contracts 
25 Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights 
26 Directive 2005/60/EC 

16 

 
 
                                                 
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  Directive27  and 
the  Directive  on  privacy  and  electronic 
communication28 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. 

The  E-Commerce  Directive29  sets  up  an  Internal  Market  framework  for  electronic 
commerce. It establishes harmonised rules on issues such as the transparency and information 
requirements  for  online  service  providers,  commercial  communications,  electronic  contracts 
and limitations of liability of intermediary service providers. While Article 1(5)(d) excludes 
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 the liability regime 
for information society service providers hosting or transmitting illegal content, Articles 12 to 
15 of the Directive, also applies to gambling-related content.  

27 Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of 
individuals with regard to the processing of personal data and on the free movement of such data. On 25 January 
2012 the Commission has proposed a data protection reform package, including a Proposal for a Regulation of 
the  European  Parliament  and  of  the  Council  on  the  protection  of  individuals  with  regard  to  the  processing  of 
personal data and on the free movement of such data (General Data Protection Regulation) which will replace 
Directive 95/46/EC, see http://ec.europa.eu/home-affairs/doc_centre/police/docs/com_2012_10_en.pdf. 
28  Directive  2002/58/EC  of  the  European  Parliament  and  of  the  Council  of  12  July  2002  concerning  the 
processing of personal data and the protection of privacy in the electronic communications sector (Directive on 
privacy and electronic communications) 
29 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects 
of  information  society  services,  in  particular  electronic  commerce,  in  the  Internal  Market  ('Directive  on 
electronic commerce') 

17 

 
 
                                                 
Article 135(i) of the Directive on the common system of value added tax30 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  online 
gambling. 

4.2. The notification procedure 

The notification procedure under Directive 98/48/EC31 (the "Transparency Directive") allows 
the Commission and Member States to follow legislative developments in the Member States. 

The  Transparency  Directive  lays  down  a  procedure  for  the  provision  of  information  about 
rules on information society services. The Directive is intended to help avoid the creation of 
new  barriers  to  trade  within  the  EU.  The  Directive  requires  Member  States  to  notify  their 
rules on information society services in draft form, and generally observe a standstill period of 
at least three months before formal adoption, in order to allow other Member States and the 
Commission  to  raise  concerns  about  potential  barriers  to  trade.  Where  notified  drafts  are 
liable to create barriers to the free provision of information society services under primary or 
secondary EU law, the Commission and other Member States may submit a detailed opinion, 
or comments in the case of more minor concerns, to the Member State that has notified the 
draft.  Private  stakeholders  can  submit  contributions,  thereby  assisting  the  Commission  and 
national authorities in identifying possible trade barriers at an early stage.  

Over  the years, the active participation of Member States in assessing the notified draft has 
generated an effective dialogue between them and the Commission. In the period 2009-2011, 
around  100  notifications  were  submitted  by  the  Member  States  on  online  gambling.  Recent 
notifications  have  dealt  with  issues  such  as  seat  requirement,  server  location,  limitations  on 
the number of licences and exclusive rights systems.  

However,  Member  States  do  not  always  respect  the  obligation  to  notify  draft  rules  on 
information  society  services  under  the  Transparency  Directive  or  do  not  provide  the 
information  as  required  by  the  Directive  to  properly  assess  if  restrictions  contained  in  the 
notified  texts  are  justifiable.  Moreover,  Member  States  do  not  always  take  into  account  the 
Commission's  position  or  provide  only  brief  responses  to  the  Commission's  comments  and 
detailed opinions. The Commission services will remain vigilant so as to ensure that unlawful 
barriers  to  online  services  are  detected  at  the  earliest  possible  stage.  In  this  respect  the 

30 Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 
31 Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure 
for  the  provision  of  information  in  the  field  of  technical  standards  and  regulations,  as  amended  by  Directive 
98/48/EC of the European Parliament and of the Council of 20 July 1998 amending Directive 98/34/EC laying 
down a procedure for the provision of information in the field of technical standards and regulations 

18 

 
 
                                                 
Commission  promotes  an  open  and  constructive  dialogue  with  Member  States  in  the 
notification process. 

4.3. Regulatory framework for online gambling in Member States 

A  number  of  Member  States  prohibit  gambling  on  their  territories,  except  in  so  far  as 
exceptions  are  provided  by  law.  This  restrictive  policy  normally  aims  to  safeguard  the 
interests  of  consumers  and  to  prevent  fraud,  illegal  gaming  and  problem  gambling  or 
addiction.  It  also  aims  at  ensuring  that  the  profits  derived  from  the  gambling  market  are 
attributed to the public’s general interests. In certain Member States, it is unlawful to facilitate 
participation  in  foreign  games  of  chance.  In  a  similar  manner,  it  may  be  unlawful  to 
deliberately  participate  in  a  game  of  chance  offered  by  an  operator  not  licensed  by  the 
competent national authority of the Member State where the participant resides.  

For online gambling services different regulatory frameworks exist: 

• 

Ban 

A  few  Member  States  (e.g.  Germany,  The  Netherlands)  prohibit  the  offering  of  games  of 
chance on the internet, either for all games of chance or for certain types of games, such as 
poker and casino games.  

• 

Monopoly 

Some  European  jurisdictions  (e.g.  Finland,  Portugal,  Sweden)  have  set  up  monopolistic 
regimes  for  the  offering  of  online  gambling  services.  These  services  are  offered  either  by  a 
state-controlled public operator or by a private operator on the basis of an exclusive right.  

• 

Authorisation/licensing 

The notifications received over the past years show that a growing number of Member States 
establish licensing systems for the offering of online gambling services, allowing more than 
one  operator  to  offer  its  services  on  the  Member  State's  market  (e.g.  Denmark,  Estonia, 
France,  Italy,  Spain).  The  vast  majority  require  every  operator  of  online  gambling  offering 
services on their territories to obtain a licence within the jurisdiction. These gaming licenses 
can only be issued by national or regional authorities; whether or not the operator disposes of 
a  gambling  licence  from  one  or  more  EU  Member  State  is  not  always  taken  into 
consideration.  Some  Member  States  accept  proof  and  documents  demonstrating  compliance 
with  domestic  licensing  requirements.  A  few  Member  States  recognise  licences  issued  in 
other EU Member States. In general, the policy of granting licenses is elaborated and potential 
licensees have to comply with a series of strict requirements. In some Member States, there 
are also specific requirements as to the type of legal entity entitled to run a specific gambling 
activity. In a few cases, licences are only issued to non-profit national companies. 

Online  licences  at  large  do  not  only  cover  online  gambling  services  but  all  types  of  remote 
offers of gambling services, including mobile phones, tablet computer and IPTV. 

19 

 
 
While  most  Member  States  issue  only  one  type  of  online  licence,  for  business-to-consumer 
(B2C)  services,  some  jurisdictions  issue  B2C  and  B2B  licences.  B2C  licenses  are  the 
individual  licences  for  the  offering  of  different  types  of  games  (lotteries,  betting,  poker  and 
casino type games) and for the promotion of gambling services. B2B gambling licences are 
issued  for  the  hosting  and  managing  of  remote  gambling  operators,  i.e.  the  provision  of 
management and hosting facilities on a platform.  

• 

No specific regulation 

A few Member States (e.g. Ireland, Lithuania) still do not have any rules on the offering of 
online gambling services. 

20 

 
 
5.  EEA CASE-LAW ON GAMES OF CHANCE 

5.1. Introduction 

Since its land-mark decisions in Schindler (1994) and Gambelli (2003), the Court of Justice of 
the European Union (CJEU or "Court") has delivered over 20 judgments on games of chance 
in the area of the free movement of services and the freedom of establishment. In recent years 
the Court's jurisprudence has increasingly dealt with national rules on online gambling.  

The  Court's  case-law  in  this  field  has  been  developed  mainly  on  the  basis  of  references  for 
preliminary  rulings  from  national  courts  under Article  267  TFEU.  In  those  cases,  the  Court 
provided general principles and criteria for the interpretation of Articles 49 and 56 TFEU in 
the  area  of  games  of  chance,  so  as  to  enable  the  referring  national  court  to  take  the  final 
decision on the compatibility of the relevant national law with EU law.  

The EFTA Court has also established case-law with respect to the fundamental freedoms of 
the internal market in the area of gambling. It issued two judgments in 2007. 

This section provides a summary of the main jurisprudence developed by the CJEU and the 
EFTA Court ("the courts") on gambling rules. It is structured in the following manner: 

• 

• 

the  qualification  of  the  organisation  of  games  of  chance  as  an  "economic  activity" 
covered by the fundamental freedoms of the Treaty (chapter 5.2); 
restrictions  on  the  free  movement  of  services  and  the  freedom  of  establishment 
(chapter 5.3); 
• 
recognised reasons of general interest which can justify restrictions (chapter 5.4); 
•  specific characteristics of gambling services provided via the Internet (chapter 5.5); 
•  criteria  for  assessing  the  proportionality  (suitability  and  necessity)  of  the  national 
restrictions  under  the  different  types  of  regulatory  frameworks:  a  ban  on  games  of 
chance  (chapter  5.6.1),  an  exclusive  right/monopoly  (chapter  5.6.2)  and  a  system  of 
licences  (chapter  5.6.3),  as  well  as  in  the  case  of  specific  corporate  requirements 
(chapter 5.7). 

The  main  focus  of  this  section  is  on  the  circumstances  under  which  restrictive  national 
gambling laws can or cannot be justified on grounds related to the general interest, which are 
also the basis for the Commission to assess the compatibility of national gambling laws under 
the Treaty.  

It is important to underline that some of the principles enshrined in the case-law of the CJEU 
and  the  EFTA  Court  on  gambling  apply  both  to  the  online  and  the  land-based  games  of 
chance. Other features of the case-law are specifically relevant for games of chance offered 
via the internet.32 This section deals with both channels.  

32 See most explicitly chapter 5.5.1. 

21 

 
 
                                                 
In  addition,  the  document  is  limited  to  case-law  developed  by  the  courts  in  the  context  of 
national rules  on gambling  and  the Treaty provisions  on  the  free  movement  of  services  and 
the freedom of establishment. The following table provides an overview of the relevant cases: 

CJEU judgments and pending cases  

Preliminary Rulings 
Judgment of 24/03 1994  

Schindler, C-275/92 

ECR [1994] I-01039 

Judgment of 21/09 1999 

Läärä & Others, C-124/97 

ECR [1999] I-06067 

Judgment of 21/10 1999 

Zenatti, C-67/98 

ECR [1999] I-07289 

Judgment of 11/09 2003 

Anomar & Others, C-6/01 

ECR [2003] I-8621 

Judgment of 06/11 2003 

Gambelli & Others, C-243/01  ECR [2003] I-13031 

Judgment of 13/11 2003 

Lindman, C-42/02 

ECR [2003] I-13519, 

Judgment of 06/03 2007 

Judgment of 08/09 2009 

Judgment of 03/06 2010 

Judgment of 03/06 2010 

Judgment of 08/07 2010 

Placanica & Others, C-338/04, 
C-359/04 & C-360/04 
Liga Portuguesa de Futebol 
Profissional & Bwin 
International (Santa Casa),  
C-42/07 
Sporting Exchange & Others 
(Betfair), C-203/08 
Ladbrokes Betting & Gaming 
and Ladbrokes International, 
Case C-258/08 
Sjöberg & Gerdin, C-447 &  
C-448/08 

ECR [2007] I-1891 

ECR [2009] I-7633 

ECR [2010] I-4695 

ECR [2010] I-4757 

ECR [2010] I-6921 

Judgment of 08/09 2010  Winner Wetten, C-409/06 

ECR [2010] I-8015 

Judgment of 08/09 2010 

Stoß & Others, C-316/07 etc.  ECR [2010] I-8069 

Judgment of 08/09 2010 

Judgment of 09/09 2010 

Carmen Media Group, 
C-46/08 
Engelmann, C-64/08 

ECR [2010] I-8149 

ECR [2010] I-8219 

Judgment of 30/06 2011 

Zeturf, C-212/08 

ECR [2011] I-0000 

Judgment of 15/09 2011 

Dickinger and Ömer, C-347/09  ECR [2011] I-0000 

Judgment of 16/02 2012 

Judgment of 12/07 2012 

Judgment of 19/07 2012 

Pending Cases 

Costa  and  Cifone,  C-72/10  & 
C-77/10 
HIT and HIT LARIX,  
C-176/11 
SIA Garkalns, C-470/11 

ECR [2012] I-0000 

ECR [2012] I-0000 

ECR [2012] I-0000 

22 

 
 
Joined cases C-186/11 &  
C-209/11,  

Stanleybet International & 
Sportingbet 

[Opinion  of 
the  Advocate 
General of 20 September 2012] 

Joined cases C-660/11 &  
C-8/12  
Case C-390/12  

Biasci & Rainone 

Pfleger and others 

EFTA Court Rulings 
Judgment of 14/03/07,  

Judgment of 30/05/07,  

EFTA  Court  Report  2007, 
p.11 

EFTA  Court  Report  2007, 
p.89 

EFTA Surveillance Authority 
v The Kingdom of Norway 
(gaming machines), Case E-
1/06, 
Ladbrokes Ltd. v The 
Government of Norway, 
Ministry of Culture and 
Church Affairs and Ministry  
of Agriculture and Food 
(Ladbrokes), Case E-3/06, 

This  section  is  not  intended  to  provide  an exhaustive  overview  of  all  EU  and  EFTA  courts' 
case-law that might be potentially relevant in future cases of national legislation on gambling, 
nor  does  it  cover  certain  requirements  of  general  application  which  are  not  limited  to  the 
gambling sector. For example, restrictions on the participation of foreign capital and certain 
banking  requirements  may  also  be  incompatible  with  (secondary)  EU  law  but  are  not  dealt 
with here.33  

A  separate  part  of  this  section  is  dedicated  to  the  application  of  the  state  aid  rules  in  the 
gambling sector (chapter 5.8). 

5.2. The  organisation  of  games  of  chance  is  an  "economic  activity"  covered  by  the 

fundamental freedoms rules of the TFEU  

The  CJEU  ruled  for  the  first  time  in  its  judgment  in  Schindler  that  the  organisation  of  all 
games of chance or gambling34 such as lotteries can be considered an economic activity since 
there  is  a  particular  service  provided  for  remuneration  and  an  intention  to  make  a  cash 
profit.35  Hence,  they  are  subject  to  the  fundamental  freedoms  of  the  Treaty:  the  free 
movement of services (Articles 56-62 TFEU) and the freedom of establishment (Articles 49-

33 Such conditions should be assessed, for example, under Article 63 TFEU on the free movement of capital (e.g. 
for restrictions on participation of foreign capital in order to obtain national gambling licences) and/or Directive 
2006/48/EC of the European Parliament and the Council of 14 June 2006 relating to the taking up and pursuit of 
the businesses of credit institutions (e.g. for requirement to use a national credit institution). See however also 
chapter 5.8 for case-law on corporate requirements in the gambling sector.  
34  The  CJEU  appears  to use  “games  of  chance”  and  “betting  and gaming”  interchangeably,  see  e.g. Dickinger 
and  Ömer,  par.  44,  45  and  47.  In  this  section  these  notions  are,  together  with  the  term  "gambling",  used  in  a 
general manner. 
35 See in particular Schindler, par.19 et seq., and Anomar, par. 47 and 48. 

23 

 
 
 
 
 
 
                                                 
55  TFEU).  The  Court  held  in  Gambelli  that  services  offered  by  electronic  means  are  also 
covered by these Treaty principles.  

The notion of “services” within the meaning of Articles 56 and 57 TFEU applies not only to 
activities  allowing  users  to  participate  in  gambling,  but  also  to  the  activity  of  promoting 
gambling, given that such an activity merely constitutes a specific step in the organisation or 
operation of the gambling to which it relates.36 

Magazine competitions involving crosswords or other puzzles in which a number of readers 
who  have  given  correct  answers  receive  a  prize  following  a  draw,  do  not  constitute  an 
economic activity in their own right. They are merely one aspect of the editorial content of a 
magazine,  and  are  organised  on  a  small  scale,  with  small  stakes.  The  CJEU  has  assessed 
restrictions  on  the  organisation  of  such  competitions  under  the  Treaty  rules  on  the  free 
movement of goods.37 

5.3. Restrictions on the free movement of services and the freedom of establishment 

Articles 49 and 56 TFEU require the abolition of all restrictions on freedom of establishment 
and  freedom  to  provide  services  –  even  if  those  restrictions  apply  without  distinction  to 
national providers  of services and  to  those  from other Member States – if they are liable to 
prohibit,  impede  or  render  less  attractive  the  activities  of  a  service  provider  established  in 
another Member State in which it lawfully provides similar services.38  

National rules  in the area of gambling constitute an obstacle  to the  freedoms guaranteed by 
the internal market freedoms if they: 

•  ban the exercise of an economic activity in the area of gambling;39  
•  confer  exclusive  rights  to  organise  and  promote  games  of  chance  on  a  single 

operator;40  

•  make the exercise of an economic activity subject to a licensing requirement.41 

The  freedom  to  provide  services  involves  the  freedom  of  the  provider  to  offer  and  supply 
services to recipients in a Member State other than that in which the provider is established, 
and  also  the  freedom  to  receive  or  to  benefit  as  recipient  from  the  services  offered  by  a 
provider in another Member State. The freedom to provide services therefore is for the benefit 
of both providers and recipients of services.42 

36 See Case Schindler, par. 22; Case Winner Wetten, par. 43 and Stoß and Others, par. 56.  
37 Case C-368/95, Familiapress [1997] ECR I-3689, par. 23. See also Zenatti, par. 17.  
38  Costa  and  Cifone, par.  69; Liga  Portuguesa  de Futebol Profissional  and  Bwin  International, par.  51  and  the 
case-law cited therein. 
39 E.g. Schindler, par. 43-44. 
40 E.g. Dickinger and Ömer, par. 41. 
41 E.g. Costa and Cifone, par. 70. 
42 See Case HIT, par. 16, and case-law cited.  

24 

 
 
                                                 
Restrictions  on  freedom of  establishment for nationals  of a Member State in  the territory of 
another  Member  State  are  prohibited  by  Article  49  TFEU,  including  restrictions  on  the 
setting-up of agencies, branches or subsidiaries.  

As regards the delimitation of the scope, respectively, of the principles of freedom to provide 
services  and  freedom  of  establishment,  it  is  necessary  to  establish  whether  or  not  the 
economic  operator  is  established  in  the  Member  State  in  which  it  offers  the  service  in 
question. 

According to the Court´s case-law, for there to be “establishment” within the meaning of the 
Treaty, a commercial relationship entered into by an operator established in a Member State 
with operators or intermediaries established in the host Member State must make it possible 
for  the  operator  to  participate,  on  a  stable  and  continuous  basis,  in  the  economic  life  of  the 
host  Member  State  and  must  thus  be  such  as  to  enable  customers  to  take  advantage  of  the 
services offered through a permanent presence in the host Member State, which may be done 
simply by means of an office managed by a person who is independent but authorised to act 
on a permanent basis for the operator, as would be the case with an agency.43 

On  the  other  hand,  every  provision  of  services  which  are  not  offered  on  a  stable  and 
continuous  basis  from  an  establishment  in  the  Member  States  of  destination  constitutes  a 
"provision  of  services"  for  the  purposes  of  Article  56  TFEU.  In  this  context,  the  Court  has 
ruled that no provision of the Treaty affords a means of determining, in an abstract manner, 
the duration or frequency beyond which the supplier of a service or of a certain type of service 
can  no  longer  be  regarded  as  the  provision  of  services.  Accordingly,  "services"  for  the 
purposes of the Treaty may cover services varying widely in nature, including services which 
are provided over an extended period, even over several years.44 

The CJEU has recognised that that "any restriction concerning the supply of games of chance 
over  the  internet  is  more  of  an  obstacle  to  operators  established  outside  the  Member  State 
concerned,  in  which  the  recipients  benefit  from  the  services,  those  operators,  as  compared 
with operators established in that Member State, would thus be denied a means of marketing 
that is particularly effective for directly accessing that market".45  

In  Dickinger  and  Ömer,  the  Court  clarified  which  fundamental  freedoms  may  apply  in  a 
situation  where  gaming  services  are  marketed  over  the  internet  in  the  territory  of  a  host 
Member  State  by  an  operator  established  in  another  Member  State  but  with  a  certain 
infrastructure in the host Member State. It ruled that the mere fact that a provider of games of 
chance marketing over the internet makes use of material means of communication (such as a 
server, a helpdesk) supplied by another undertaking established in the host State is not in itself 
capable of showing that the provider has, in that Member State, a fixed establishment similar 
to  an  agency,  which  would  have  the  consequence  that  the  Treaty  provisions  on  freedom  of 

43 See Dickinger and Ömer, par. 35; Stoß and Others, par. 59-60. 
44 See recently Garkalns, par. 28. 
45 See Case Zeturf, par. 74.  

25 

 
 
                                                 
establishment would apply.46 The Court answered the questions of the referring  court under 
the provision of Article 56 TFEU on the free movement of services. 

In practice, in the area of gambling, the importance of the difference between the application 
of  the  Treaty  provisions  governing  the  free  movement  of  services  or  the  provisions  on  the 
freedom of establishment is rather limited. Under both Articles 49 and 56 TFEU, the case-law 
provides for a similar interpretation of whether there is a restriction to the free movement and 
whether such a restriction can be justified on the basis of a general interest.47 

Concrete examples of national rules in the gambling sector which constitute a restriction on 
the  freedom  to  provide  services  and/or  the  freedom  of  establishment,  as  interpreted  by  the 
courts, are: 

• 

• 

the ban on the importation of lottery advertisements and tickets into a Member State 
with a view to the participation by residents of that State in a lottery operated in other 
Member States;48 
the prohibition of promoting gambling organised legally in other Member States and 
of unlicensed gambling nationally thus ensuring that national consumers only take part 
in gambling in the context of the national licensing system;49 

• 

•  where a company established in a Member State pursues the activity of collecting bets 
through the intermediary of an organisation of agencies established in another Member 
State,  any  restrictions  of  the  activities  of  those  agencies  would  constitute  such  an  a 
obstacle50 
the  conferral  of  exclusive  rights  on  a  single  operator  (set  up  either  under  public  or 
private  law)  to  organise  and  promote  games  of  chance,  and  whereby  all  other 
operators,  including  operators  established  in  another  Member  State,  are  prohibited 
from offering, over the internet, services falling within the scope of that regime in the 
territory of the first Member State;51 
the prohibition on individuals to connect by internet from their home to a bookmaker 
established in another Member State;52  
the limitation of the number of licences or operators;53 
the  prohibition  of  activities  in  the  betting  and  gaming  sector  without  prior 
authorisation from the administrative authorities;54 
restricting  the  right  to  operate  games  of  chance  or  gambling  solely  to  casinos  in 
permanent or temporary gaming areas created by decree-law;55 

• 
• 

• 

• 

46 See par. 33-38 of the judgment. 
47 See, along these lines, Advocate-General Bot in Dickinger and Ömer, par 55-56. 
48 Case Schindler, par. 37. 
49 Case Sjöberg and Gerdin, par. 33 and 34; Case HIT, par. 17. 
50 Case Gambelli, par. 45-46 and 58; Case Carmen Media Group, par. 41. 
51  Dickinger  and  Ömer,  par.  41;  Sporting  Exchange,  par.  24;  Case  Liga  Portuguesa,  par.  52-53;  Ladbrokes 
Betting & Gaming and Ladbrokes International, par. 16; Ladbrokes, par. 40 
52 Case Gambelli, par. 56-57. 
53 Case Placanica, par. 42, 51. 
54 Case Garkalns, par. 34. 
55 Case Anomar, par. 66. 

26 

 
 
                                                 
• 
• 

• 

treating foreign lotteries differently for tax purposes from national lotteries;56  
the obligation that persons wishing to operate gaming establishments must adopt the 
legal form of a public limited company, which prevents, inter alia, operators who are 
natural persons and undertakings which, in the country in which they are established, 
have chosen another corporate form, from setting up a secondary establishment;57  
the  obligation  on  persons  holding  concessions  to  operate  gaming  establishments  to 
have their seat in the national territory.58 

Finally, the CJEU has made clear that restrictions which are incompatible with the freedom of 
establishment and the freedom to provide services, because they do not contribute to limiting 
betting  activities  in  a  consistent  and  systematic  manner,  cannot  continue  to  apply,  not  even 
during a transitional period.59  

5.4. General interest reasons which may justify restrictions on gambling activities 

Member States may justify restrictions to the fundamental freedoms for reasons related to the 
general  interest.60  A  restriction  to  the  freedom  to  provide  services  or  to  the  freedom  of 
establishment may be: 

•  allowed as a derogation, on grounds of public policy, public security or public health, 
as  expressly  provided  for  by  Articles  51  and  52  TFEU,  which  are  applicable  in  the 
area of services by virtue of Article 62 TFEU,61 or  
justified,  in  accordance  with  the  case-law  of  the  CJEU,  by  overriding  reasons  in  the 
public interest.62  

• 

With regard to the justifications which are capable of being accepted, the CJEU has observed 
that the objectives pursued by national legislation adopted in the area of betting and gaming, 
considered as a whole, usually concern: 

• 

• 

the  protection  of  the  recipients  of  the  services  in  question  and  of  consumers  more 
generally, and  
the protection of society.  

Within  these  two  general  categories  of  objectives,  the  courts  have  identified  more  specific 
interests such as the fight against gaming addiction, the reduction of gambling opportunities, 
the fight against crime and malpractice, and the general need to preserve public order.  

56 Case Lindman, par. 21. 
57 Case Engelmann, par. 28. 
58 Case Engelmann, par. 32. 
59 Case Winner Wetten, par. 69. 
60 Consistent case-law, see most recently Case Garkalns, par. 35, and the case-law cited.  
61  The  reasons  referred  to  in  Articles  51  and  52  TFEU  may  justify  national  measures  which  are  either 
discriminatory  vis-à-vis  foreign  operators  or  which  apply  without  discrimination  to  national  and  foreign 
operators. See, to that effect, Case Dickinger and Ömer, par. 79; Case Placanica, par. 49. 
62 Restrictions justified by overriding reasons in the public interest must be applied without discrimination. 

27 

 
 
 
                                                 
On  the  other  hand,  the  general  interest  objectives  must  be  of  a  non-economic  nature.  Other 
reasons  put  forward  by  Member  States  have  been  rejected  by  both  courts,  owing  to  their 
economic or financial nature. These reasons include: 

a)  the diminution of the reduction of tax revenue63 / maximising public revenue;64  
b)  the  need  to  ensure  continuity,  financial  stability  and  a  proper  return  on  past 
investments  of  licence  holders65  /  protecting  the    market  positions  of  existing 
operators;66 

c)  the contribution to the rural development by financing horse breeding.67  

It  is  also  settled  case-law  that  a  “ground  of  economic  nature”  such  as  the  financing  of 
benevolent  or  social  or  other  public-interest  activities  through  a  levy  on  the  proceeds  of 
authorised games of chance may constitute only “an incidental beneficial consequence” and 
not  the  real  justification  for  restricting  the  freedoms  of  establishment  and  the  provision  of 
services  related  to  games  of  chance.68  Therefore,  a  Member  State  is  not  entitled  to  rely  on 
reasons of public policy relating to the need to reduce opportunities for gambling in so far as 
the public authorities of that State incite and encourage consumers to participate in games of 
chance so that the public purse can benefit.69 

The Member State concerned should in each case determine which legitimate objectives may 
justify the  restriction, and the justification grounds put forward by a Member State must be 
taken together and considered as a whole.70 

The  Court  has  acknowledged  that,  when  analysing  the  betting  and  gaming  sector,  it  is  not 
possible to disregard the associated “moral, religious or cultural factors” or the “morally and 
financially harmful consequences for the individual and for society” associated with betting 
and gaming.71 

According  to  settled  case-law,  in  the  absence  of  harmonisation  on  the  games  of  chance,  all 
those  particular  factors  justify  national  authorities  having  “a  sufficient  margin  of  discretion 
[...] to determine, in accordance with their own scale of values, what is required in order to 
ensure consumer protection and the protection of society”.72 The Member States are therefore 

63 Case Gambelli, par. 61. 
64 Case Dickinger and Ömer, par. 55. 
65 Case C-260/04, Horse-race betting licences (Commission v. Italy), par. 35; Costa and Cifone, par. 59. 
66 Case Costa and Cifone, par. 65. 
67 Case Zeturf, par. 51; Ladbrokes, par. 68. 
68 Case Zenatti, par. 36; Case Gambelli, par 62; Case Gaming machines, par. 36; Dickinger and Ömer, par. 61, 
with  references  to  previous  case-law;  Ladbrokes,  par.  75.  The  financing  of  public-interest  activities  with  the 
revenues of gambling and betting activities must be distinguished from the “aim of preventing gambling from 
being a source of private profit”. The latter issue relates to the condition of limiting the grant of a licence to one 
or more non-profit entities (see further chapter 5.6.3.3).. 
69 Dickinger and Ömer, par. 62. 
70 Schindler, par. 58; Zenatti, par. 31; Gaming Machines, par. 34; Ladbrokes, par. 44. 
71 See already the judgment in Case Schindler, par.60; see also Case Dickinger and Ömer, par. 45. 
72 Dickinger and Ömer, par. 45; Stoß and Others, par. 76, and case-law cited. 

28 

 
 
                                                 
“in  principle  free  to  set  the  objectives  of  their  policy  on  gaming  of  chance  and,  where 
appropriate, to define in detail the level of protection sought".73  

The Court has also held that, in the context of legislation which is compatible with the Treaty, 
the  choice  of  methods  for  organising  and  controlling the operation and playing of games of 
chance or gambling falls within the margin of discretion enjoyed by national authorities.74 

However,  the  restrictive  measures  imposed  by  the  Member  States  must  be  applied  without 
discrimination  and  must  satisfy  the  conditions  laid  down  in  the  case-law  as  regards  their 
proportionality.  Thus,  they  must  be  suitable  for  ensuring  the  attainment  of  the  objective 
pursued  and  not  go  beyond  what  is  necessary  in  order  to  achieve  that  objective.  In  this 
connection,  it  is  settled  case-law  that  national  legislation  is  appropriate  for  ensuring 
attainment  of  the  objective  pursued  only  if  it  genuinely  reflects  a  concern  to  attain  it  in  a 
consistent and systematic manner.75  

5.5. The provision of gambling services via the Internet 

5.5.1.  Specific characteristics of on-line gambling 

Internet constitutes a "channel" through which games of change may be offered.76 In light of 
the assessment of whether the establishment of a public monopoly on the offer of games of 
chance via the internet is necessary, the Court has however made clear 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:77 

(1)  

(2)  

(3)  

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 
operators78 (see further chapter 5.5.2). 

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 market.79 

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 

73 Liga Portuguesa, par. 59; Case Dickinger and Ömer, par. 47. 
74 Stoß and Others, par. 92, and case-law cited. 
75 Case Garkalns, par. 37, and the case-law cited.  
76 See Case Carmen Media Group, par. 100. 
77 See most recently Zeturf, par. 78-80; Ladbrokes Betting & Gaming and Ladbrokes International, par. 54-55. 
78 Liga Portuguesa, par..69. 
79 Liga Portuguesa, par. 70. In Sporting Exchange, the CJEU underlined that the fact that an online operator does 
not pursue an active sales policy in the Member State of the consumer, particularly because he is not making use 
of advertising in that State, cannot be regarded as running counter to this consideration (par. 35)  

29 

 
 
                                                 
other negative consequences. The Court has also stated that the internet may prove to 
be a source of risks of a different kind and of 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.80 

According  to  the  Court,  when  assessing  a  national  restriction  on  the  provision  of  gambling 
services,  all  the  substitutable  marketing  channels  should  be  taken  into  account,  unless  the 
consequence of using the internet is to increase the risks linked to games of chance beyond 
those that exist in relation to games marketed through traditional channels. In the context of a 
national single licence system for betting on horseracing which did not draw any distinction 
between  the  online  and  land-based  marketing  channels,  the  CJEU  has  clarified  that  an 
assessment of the scope of the restriction on the freedom to provide services should be made 
from the point of view of restrictions placed on the entire sector concerned.81  

5.5.2.  Taking account of the checks on operators of games of chance carried out 

in other Member States 

The courts have ruled that, in the current state of EU / EEA law, there is no duty of mutual 
recognition of authorisations issued by the various EU / EEA States.82  

Thus, the EFTA Court acknowledged in Ladbrokes that the EEA State where the services are 
provided has a right to require possession of a new licence even if the service provider already 
holds  a  licence  in  its  home  state.  It  added,  however,  that  national  measures  must  not  be 
excessive in relation to the aims pursued. This would be the case if the requirements to which 
the issue of a licence is subject coincided with the requirements of the home state.83 

The  CJEU  has  similarly  ruled  in  Stoß  and  Others  that  a  duty  mutually  to  recognise 
authorisations issued by the various Member States cannot exist having regard to the margin 
of discretion recognized to Member States and the absence of any EU harmonisation in this 
matter.84 

This line of case-law has been recently developed by the Court in the context of the specific 
features of online gambling, referred to in the previous section.  

80 Case Carmen Media Group, par.103. 
81 Case Zeturf, par. 81, 82.  
82 Ladbrokes, par. 84-86, Stoß and Others, par. 112; Dickinger and Ömer par. 96; Sporting Exchange, par. 33-35. 
83 See par. 86 of the judgment. 
84 See par. 112 of the judgment 

30 

 
 
 
 
 
                                                 
In the absence of sectoral harmonisation of legislation at European Union level, the mere fact 
that an operator lawfully offers services in one Member State, in which it is established and is 
in principle already subject to statutory conditions and controls on the part of the competent 
authorities of that State, cannot be regarded as a sufficient assurance that national consumers 
will be protected against the risks of fraud and crime. The Court has justified such exemption 
to the rule in view of: 

• 

• 

the substantial differences between the objectives pursued and the levels of protection 
sought by the legislation of the various Member States; and 
the  difficulties  liable  to  be  encountered  in  such  a  context  by  the  authorities  of  the 
Member State of establishment in assessing the professional qualities and integrity of 
operator.85 

Moreover,  the  mere  fact  that  a  Member  State  has  opted  for  a  system  of  protection  which 
differs from that adopted by another Member State cannot affect the assessment of the need 
for and proportionality of the relevant provisions, which must be assessed solely by reference 
to the objectives pursued by the competent authorities of the Member State concerned and the 
level of protection which they seek to ensure.86  

The  Court  has  also  accepted  that  various  Member  States  do  not  necessarily  have  the  same 
technical  means  available  for  controlling  online  games  of  chance,  and  do  not  necessarily 
make  the  same  choices  in  this  respect.  The  fact  that  a  particular  level  of  protection  of 
consumers  against  fraud  by  an  operator  may  be  achieved  in  a  particular  Member  State  by 
applying sophisticated control and monitoring techniques does not permit the conclusion that 
the same level of protection can be achieved in other Member States which do not have those 
technical means available or have made different choices. A Member State may legitimately 
wish,  moreover,  to  monitor  an  economic  activity  which  is  carried  on  in  its  territory.  That 
would  be  impossible  if  it  had  to  rely  on  checks  done  by  the  authorities  of  another  Member 
State using regulatory systems outside its control.87 

Consequently,  the  case-law  which  states  that  it  is  not  compatible  with  Article  56  TFEU  to 
make  a  provider  subject  to  restrictions  for  safeguarding  the  public  interest  in  so  far  as  that 
interest is already safeguarded in the Member State where he is established does not apply, in 
the present state of development of European Union law, in a field such as that of games of 
chance. This area is not harmonised at European Union level, and the Member States have a 
wide  discretion  in  relation  to  the  objectives  they  wish  to  pursue  and  the  level  of  protection 
they seek.88 

5.6. General  criteria  for  assessing  the  proportionality  (suitability  and  necessity)  of 

national restrictions under different types of regulatory frameworks 

85 Liga Portuguesa, par. 69; Dickinger and Ömer, par. 96. 
86 Dickinger and Ömer, par. 97. 
87 Dickinger and Ömer, par. 98. 
88 Dickinger and Ömer, par. 99. 

31 

 
 
                                                 
5.6.1.  A ban on games of chance 

The Schindler judgment remains the only decision where the CJEU ruled on a national (UK) 
general ban on a certain category of games of chance - the organisation of lotteries (subject to 
very  limited  exceptions).  The  Court  decided  that  under  the  circumstances  in  question,  the 
national legislation amounted to an obstacle to the freedom to provide services, but was not 
incompatible with the Treaty in view of the concerns of social policy and the prevention of 
fraud which justify it.  

The  conclusion  was  based  on  a  number  of  considerations,  in  particular  the  moral,  religious 
and cultural aspects of lotteries, the high risk of crime or fraud that lotteries involve and the 
incitement  to  spend  which  may  have  damaging  individual  and  social  consequences.  In 
addition, the general ban on lotteries could not be considered to be discriminatory based on 
the nationality of the operators.89  

National legislation on gambling may also contain bans on the organisation and promotion of 
games of change through certain channels, in particular via the Internet. In Sporting Exchange 
and Ladbrokes Betting & Gaming and Ladbrokes International, the Court decided that in the 
light of the specific features associated with the provision of games of chance via the Internet, 
a total ban may be regarded as justified by the objectives of combating fraud and crime.90  

5.6.2.  An exclusive right/monopoly 

Most  of  the  case-law  on  gambling  of  both  the  CJEU  and  of  the  EFTA  Court  deals  with 
national legislation which: 

•  creates a public entity which enjoys an exclusive right to offer certain games of chance 
and  which  does  not  itself  operate  such  services  but  instead  manages  a  network  of 
“concessions”,  i.e.  natural  or  legal  persons  which  are  allowed  by  an  act  of  the 
competent  administration  to  operate  on  the  market  on  behalf  of  the  public  entity 
holding the exclusive right;91 

•  establishes an exclusive right/legal monopoly for a public or State-controlled operator 

• 

directly by law, 92 or 
limits  the  organisation  and  promotion  of  games  of  chance  to  one  public  or  private 
operator through the grant of a single licence.93 

The  courts  have  developed  a  number  of  specific  requirements  which  should  be  met  by 
national regimes of exclusive rights/monopolies in order to be considered proportionate under 
the  free  movement  principles.  These  include  the  need  for  a  strict  state  control  (chapter 
5.6.2.1);  the  need  for  a  particular  high  level  of  protection  of  consumer  protection  (chapter 

89 See in particular par. 60 of the judgment.  
90 Sporting Exchange, par. 36 and Ladbrokes Betting & Gaming and Ladbrokes International, par. 57. 
91  The  (previous)  Italian  system,  in  particular  subject  to  the  judgments  in  the  cases  Zenatti,  Gambelli  and 
Placanica,  
92 E.g. EFTA Court in Case Gambing machines; CJEU in Läärä and Dickinger and Ömer. 
93 E.g. Sporting Exchange, Stoß and Others, Zeturf. 

32 

 
 
                                                 
5.6.2.2)  and  the  need  for  a  detailed  analysis  of  the  consistency  of  the  national  gambling 
policy,  in  particular  as  to  the  commercial  strategy  of  the  holder  of  the  exclusive 
licence/monopoly and as to the overall national policy pursued in the field of games of chance 
(chapters 5.6.2.3-5.6.2.5). 

5.6.2.1. 

Strict state control 

The  CJEU  has  ruled  that  a  Member  State  seeking  to  ensure  a  particularly  high  level  of 
protection  of  consumers  or  of  society  may  be  entitled  to  take  the  view  that  it  is  only  by 
granting  exclusive  rights  to  a  single  entity  which  is  subject  to  strict  control  by  the  public 
authorities  that  it  can  tackle  the  risks  connected  with  the  gambling  sector  and  pursue  the 
objective of preventing incitement to squander money on gambling and combating addiction 
to gambling with sufficient effectiveness.94 

The public authorities of a Member State may legitimately consider that the fact that, in their 
capacity as overseers of the entity holding the monopoly, they will have additional means of 
influencing its conduct, outside the statutory regulating and monitoring mechanisms, is likely 
to  secure  for  them  a  better  command  over  the  supply  of  games  of  chance  and  better 
guarantees that their policy will be implemented more effectively than in the case where those 
activities are carried out by private operators in a competitive environment. This is the case 
even if private operators are subject to a system of authorisation and a regime of supervision 
and  penalties.95  The  choice  between  granting  exclusive  rights  to  a  public  body  whose 
management  is  subject  to  direct  State  supervision  or  to  a  private  operator  over  whose 
activities  the  public  authorities  are  able  to  exercise  tight  control  falls  within  the  margin  of 
discretion which Member States enjoy in the context of games of chance.96  

With respect to the objective of fighting gambling addiction caused by gaming machines, the 
EFTA  Court  admitted  in  the  Gaming  machines  case  that  "it  is  reasonable  to  assume  that  a 
monopoly  operator  in  the  field  of  gaming  machines  subject  to  effective  control  by  the 
competent  public  authorities  will  tend  to  accommodate  legitimate  concerns  of  fighting 
gambling addictions better than a commercial operator or organisations whose humanitarian 
or socially beneficial activities partly rely on revenues of gaming machines. Furthermore, it is 
plausible  to  assume  that  in  principle  the  State  can  more  easily  control  and  direct  a  wholly 
State-owned  operator  than  private  operators.  Through  its  ownership  role,  the  State  has 
additional  ways  of  influencing  the  behaviour  of  the  operator  besides  public  law  regulations 
and surveillance."97  

The  condition  of  strict  state  control  has  been  elaborated  on  in  Liga  Portuguesa.  This  case 
concerned the granting of exclusive rights to organise online lotteries, lotto games and sports 
betting to Santa Casa, a "legal person, in the public administrative interest". It was submitted 
that the main objective pursued by the national legislation was the fight against crime, more 

94 See Dickinger and Ömer, par. 48, and case-law cited. 
95 See Dickinger and Ömer, par. 49 and cited case-law. 
96 Stoß and Others, par. 81-82.  
97 Par. 51 of the judgment. 

33 

 
 
                                                 
specifically the protection of consumers of games of chance against fraud on the part of the 
operators.  

The  Portuguese  Government  argued  that  the  grant  of  exclusive  rights  to  Santa  Casa  would 
ensure that the system would function in a secure and controlled way. The CJEU analysed the 
national legal framework and acknowledged that Santa Casa operates under the strict control 
by  the  public  authorities.98  The  Court  concluded  that,  in  circumstances  such  as  those  in  the 
main proceedings, the granting of exclusive rights to operate games of chance via the internet 
to a single operator may confine the operation of gambling within controlled channels and be 
regarded as appropriate for the purpose of protecting consumers against fraud on the part of 
operators. In view of the specific features associated with the provisions of games of chance 
via  the  internet  (see  chapter  5.5.1),  the  CJEU  also  considered  the  restrictive  measure  to  be 
necessary.99 

In  Zeturf,  the  CJEU  assessed  a  national  system  conferring  an  exclusive  right  to  a  single 
operator to organise off-course betting on horseracing. It concluded that national legislation is 
appropriate to ensure the objective of combating the criminal and fraudulent activities linked 
to gambling, as well as that of protecting society, having regard to the effects of gambling on 
individuals and on society, in the situation where there appears to be particularly strict State 
control  over  the  organisation  of  betting  on  horseracing.  Thus,  "the  State  exercises  direct 
control over the functioning of the exclusive operator, the organisation of the events on which 
bets  are  placed,  the  types  of  bet  authorised  and  their  channels  of  distribution,  including  the 
proportion  of  the  winnings  to  the  stakes  and  the  conduct  and  supervision  of  the  regulated 
activities".100  

5.6.2.2.  High level of consumer protection 

However, as a monopoly is an unusually restrictive measure, it must be ascertained that the 
national  authorities  really  intend  to  ensure  a  particularly  high  level  of  consumer  protection 
with regard to the objectives relied on, and whether, having regard to the level of protection 
sought,  the  establishment  of  a  monopoly  could  actually  be  considered  necessary.101  In  this 
context,  it  is  the  Member  State  wishing  to  rely  on  an  objective  capable  of  justifying  the 
restriction of the freedom to provide services which must supply the court called on to rule on 
that question with all the evidence of such a kind as to enable the court to be satisfied that the 

98  This  was  for  example  illustrated  by  the  government's  involvement  in  appointing  the  members  of  its 
administrative organs and by the powers of the Gaming Department of Santa Casa - the licence holder - to open, 
institute and prosecute proceedings involving offences of illegal operation of games of chance to which Santa 
Casa had the exclusive rights. 
99 Liga Portuguesa, par. 62-72. 
100 Par. 56 of the judgment. 
101 Dickinger and Ömer, par. 71; Case Zeturf, par. 47. 

34 

 
 
 
                                                 
measure  does  indeed  comply  with  the  requirements  deriving  from  the  principle  of 
proportionality.102 

In  the  Gaming  machines  case,  the  EFTA  Court,  examined  the  introduction  of  an  exclusive 
right for the operation of gaming machines of a fully state-owned public company supervised 
by the relevant Norwegian Ministry. It considered that the national legislation did not opt for 
a total ban, but for a monopoly system with a view to reducing the risk of gambling addiction 
to a level which it deems acceptable and to reduce crime and malpractice. In such a situation, 
the  necessity  test  consists  of  an  assessment  of  whether  the  monopoly  option  is  functionally 
needed in order to reduce the problems to the level opted for, or whether this reduction could 
equally  well  be  obtained  through  other,  less  restrictive  means  such  as  admitting  private 
operators under a stricter licencing regime. The EFTA Court noted, as regards the objective of 
reducing crime and malpractice, that Norway "failed to demonstrate that a licensing scheme 
allowing private operators, if necessary with more restrictive rules on who may qualify, will 
not  be  equally  effective  as  an  exclusive  right  [for  the  monopoly  operator]  in  preventing 
money laundering and embezzlement”. Nonetheless, it concluded that taking into account the 
public  interest  objectives  considered  as  a  whole,  including  the  one  of  fighting  gambling 
addiction, the exclusive right system is likely to be more effective, in the end, than the other 
available regulatory means. 103 

On the level of protection, the EFTA Court ruled in the Ladbroke case that "if it turns out that 
the national authorities have opted for a rather low level of protection, it is less probable that a 
monopoly  is  the  only  way  of  achieving  the  level  of  protection  opted  for.  In  that  case,  it  is 
more  likely  that  less  restrictive  means,  for  instance  in  the  form  of  a  licensing  system  […] 
could suffice".104  

National authorities will therefore be more easily able to justify an exclusive right scheme if 
they  can  demonstrate  that  the  relevant  legislation  entails  a  high  level  of  protection  which 
could not be ensured with the same efficiency under a normal licensing system. 

5.6.2.3.  The consistency of the national gambling policy 

Member  States  must  not  take,  facilitate  or  tolerate  measures  that  would  run  counter  to  the 
achievement  of  the  stated  objectives  of  a  given  national  measure.105  Thus,  restrictions  on 
gaming activities are suitable to achieve their public interest objectives only insofar as those 
objectives  are  being  pursued  "in  a  consistent  and  systematic  manner",  which  involves  a 
complete assessment of the gaming policy of  the  concerned  Member  State  in  respect  of  the 
level of players' protection it has freely chosen to ensure. The "consistency" requirement will 
apply, first, in regard to the games of chance which are subject to the exclusive right scheme 
and the way they are being marketed by the monopoly holder and, secondly, in regard to the 

102 Stoß and Others, par. 71; Dickinger and Ömer, par. 54. 
103 See par. 49-52 of the judgment.  
104 Par. 59 of the judgment. 
105 Case Gaming machines, par. 43. 

35 

 
 
                                                 
gaming  policy  which  the  national  authorities  pursue  in  other  sectors  of  the  gambling 
industry.106  

Concerning the commercial strategy of the exclusive right holders, the Court noted that there 
is a certain degree of  conflict of interest for all operators, including those  that are public or 
charitable  bodies,  between  the  need  to  increase  their  income  and  the  objective  of  reducing 
gambling  opportunities.  A  public  or  non-profit-making  operator  may,  like  any  private 
operator,  be  tempted  to  maximise  its  income  and  develop  the  gambling  market,  thus 
undermining  the  objective  of  seeking  to  reduce  gambling  opportunities.  The  single  operator 
may be encouraged to increase the income generated by the gambling in order to fulfil public 
interest  objectives  more  effectively.  The  allocation  of  income  to  those  objectives  may, 
moreover,  lead  to  a  situation  in  which  it  is  difficult  to  forgo  the  amounts  generated  by  the 
gambling, the natural tendency being to increase opportunities for gambling and to attract new 
bettors. 107 

This is particularly relevant in situations where a single operator holds exclusive rights over 
the  organisation  of  games  of  chance.  That  operator  is  then  in  a  very  favourable  position  to 
increase, should it so wish, gaming activities.108  

In this context, the CJEU has underlined that:  

"the establishment of a measure as restrictive as a monopoly must be accompanied by 
a legislative framework suitable for ensuring that the holder of the said monopoly will 
in  fact  be  able  to  pursue,  in  a  consistent  and  systematic  manner,  the  objective  thus 
determined  by  means  of  a  supply  that  is  quantitatively  measured  and  qualitatively 
planned  by  reference  to  the  said  objective  and  subject  to  strict  control  by  the  public 
authorities."109 

On  the  other  hand,  the  overall  national  gambling  policy  of  a  Member  State  should  also  be 
consistent with the public interest objectives invoked to justify restrictions to free movement. 
This  assessment  needs  to  be  made  taking  into  account  the  game  of  chance  for  which  the 
exclusive right/monopoly is provided, and the way in which other types of games of chance 
are marketed.  

If the national legislation is based on more than one legitimate objective, the consistency of 
the  gambling  policy  must  be  assessed  in  relation  to  each  of  these  legitimate  objectives. 
Moreover, as the objectives pursued may not apply equally to all games of chance covered by 
the  national  law  in  question,  it  may  also  be  necessary  to  distinguish  between  the  different 
games.110  

106  See,  in  particular,  the  judgments  in  Gaming  machines,  Ladbrokes,  Gambelli,  Placanica,  Stoß  and  Others, 
Carmen Media Group, Dickinger and Ömer and Zeturf. 
107 Zeturf, par. 59, 60. 
108 Idem, par. 61. 
109 Idem, par. 58. 
110 Ladbrokes, par. 52. 

36 

 
 
                                                 
The next sections will provide more details of the application of the "consistency" condition 
in the context of the main general interest objectives of reducing gambling opportunities and 
combating fraud and crime.    

5.6.2.4.  The commercial strategy of the exclusive right holder   

The CJEU has accepted in steady case-law111 that Member States may justify limitations on 
the  number  of  operators  allowed  to  offer  games  of  chance  by  invoking  the  objective  of 
"preventing  the  use  of  betting  and  gaming  activities  for  criminal  or  fraudulent  purposes  by 
channelling  them  into  controlled  systems".  The  Court  has  also  admitted  that  "a  policy  of 
controlled  expansion  in  the  betting  and  gaming  sector  may  be  entirely  consistent  with  the 
objective  of  drawing  players  away  from  clandestine  bettering  and  gaming  –  and,  as  such, 
activities which are prohibited - to activities which are authorised and regulated". It is for the 
Member  States  to  demonstrate  that  such  channelling  measures  including,  if  relevant,  the 
development of new games may reasonably be assumed to serve their purpose.112  

To be consistent with the objective of fighting crime and reducing opportunities for gambling, 
national legislation establishing a monopoly of games of chance which allows the holder of 
the monopoly to follow an expansionist policy must be based on a finding that the crime and 
fraud  linked  to  gaming  and  addiction  to  gambling  are  a  problem  in  the  Member  State 
concerned which could be remedied by expanding authorised regulated activities.113  

According  to  the  Court,  "[s]ince  the  objective  of  protecting  consumers  from  gambling 
addiction  is,  in  principle,  difficult  to  reconcile  with  a  policy  of  expanding  games  of  chance 
characterised, inter alia, by the creation of new games and by the advertising of such games, 
such a policy cannot be regarded as being consistent unless the scale of unlawful activity is 
significant  and  the  measures  adopted  are  aimed  at  channelling  consumers’  propensity  to 
gamble  into  activities  that  are  lawful."114  That  fact  that  demand  for  games  of  chance  has 
already  increased  noticeably  particularly  at  a  clandestine  level,  must  be  taken  into 
consideration.115  

The Court underlines the need for national authorities to bring all the necessary evidence in 
this  regard.116  In  Placanica,  the  Court  accepted  factual  evidence  of  the  Italian  Government 
(investigations carried out by the Italian Senate) which led to the conclusion that the activities 
of clandestine betting and gaming, prohibited as such, were a considerable problem in Italy as 
it  appeared  that  half  the  total  turnover  figure  of  the  betting  and  gaming  sector  in  Italy  was 
generated by illegal activities.117  

111 See the decisions in Case Placanica, par. 55, Stoß and Others, par. 101-102, Dickinger and Ömer, par. 63 ff,  
and Ladbrokes Betting & Gaming and Ladbrokes International, par. 25. 
112 Ladbrokes, par. 54. 
113 See, to that effect, the judgments of the CJEU in Ladbrokes Betting & Gaming and Ladbrokes International, 
par. 29, and in Case Dickinger and Ömer par. 66. 
114 Ladbrokes Betting & Gaming and Ladbrokes International, par. 30; Dickinger and Ömer, par. 67. 
115 Ladbrokes Betting & Gaming and Ladbrokes International, par. 31. 
116 See for instance Case Zeturf, par.70, on the black market for betting on horseracing. 
117 Case Placanica, par. 56-57. 

37 

 
 
                                                 
In  order  to  achieve  the  objective  of  drawing  players  away  from  clandestine  betting  and 
gaming,  authorised  operators  must  represent  a  reliable,  but  at  the  same  time  attractive, 
alternative to a prohibited activity. As such, this may require "the offer of an extensive range 
of games, advertising on a certain scale and the use of new distribution techniques".118 

An increase in the commercial activity of an operator who has been granted exclusive rights 
in the field of games of chance and a substantial increase in the income received from those 
games  require  particular  attention  when  examining  of  whether  the  legislation  at  issue  is 
consistent  and  systematic,  and  hence  whether  it  is  appropriate  for  pursuing  the  objectives 
recognised by the case-law.119 

The courts recognised120 the following concrete features of such expansionist policy: 

• 

• 
• 

• 

• 

• 

• 

• 

• 
• 

the public monopoly extends to lottery games and the holder is engaged in intensive 
advertising  campaigns  for  lottery  games,  emphasising  the  need  to  finance  social, 
cultural  or  sporting  activities  to  which  the  profits  are  allocated,  thereby  making  it 
appear that maximisation of the profits destined for such activities is becoming an end 
in itself of the restrictive measures concerned;  
the development and marketing of addictive games by the monopoly holder; 
the  public  authorities  are  developing  or  tolerating  policies  of  expanding  supply  of 
casino games and automated games, despite the fact that they present a higher risk of 
addiction than bets on sporting competitions; 
the public authorities tolerate the offering of new possibilities of casino games on the 
Internet;  
the relaxation, by the public authorities, of the conditions in which automated games 
may  be  exploited  in  establishments  other  than  casinos,  such  as  gaming  arcades, 
restaurants, cafes and places of accommodation; 
restrictions on how often per week or per day games are on offer, restrictions on the 
number of outlets which offer games of chance and on sales and marketing activities 
of  the  outlets,  as  well  as  restrictions  on  advertising  and  development  of  new  games 
(from the owner of an exclusive licence); 
the extent and effect of marketing and development of the games of chance, inter alia, 
how much the owner of an exclusive licence spends in that regard as well as the form 
or content of the marketing and the susceptibility of the targeted groups; 
the  fact  whether  the  advertising  of  the  gambling  and  betting  services  is  rather  more 
informative than evocative in nature; 
the fact that the number of casinos has risen from 66 to 81 in 6 years; 
the fact that the exclusive right holder makes use of sustained and growing advertising 
for  its  products,  including  on  the  internet,  is  increasing  the  number  of  outlets  for 

118 Case Dickinger and Ömer, par. 63-64; Ladbrokes Betting & Gaming and Ladbrokes International, par. 25; 
Case Placanica, par. 55. 
119 Case Dickinger and Ömer, par. 61. 
120 Stoß and Others, par. 100; Case Gaming machines, par 43-45, Ladbrokes, par. 52-54, 59-62, Carmen Media 
Group, par. 67, Zeturf, paragraph 65. 

38 

 
 
                                                 
betting and for the products offered to bettors, and uses a commercial strategy seeking 
to draw in new audiences for the betting offered. 

More  specifically  in  the  context  of  the  objective  to  draw  players  from  illegal  gambling  to 
controlled  channels,  the  CJEU  has  considered  a  number  of  features  related  to  advertising, 
relevant for the assessment of the commercial policy of the holder of the monopoly:  

•  any advertising by the holder of a public monopoly must remain measured and strictly 
limited  to  what  is  necessary  in  order  thus  to  channel  consumers  towards  controlled 
gaming  networks.  Such  advertising  cannot  aim  to  encourage  consumers’  natural 
propensity  to  gamble  by  stimulating  their  active  participation  in  it.  Examples  are 
trivialising gambling or giving it a positive image because revenues derived from it are 
used for activities in the public interest, or increasing the attractiveness of gambling by 
means of enticing advertising messages holding out the prospect of major winnings.121 
in  particular,  a  distinction  should  be  drawn  between  strategies  of  the  holder  of  a 
monopoly which are intended solely to inform potential customers of the existence of 
products  and  serve  to  ensure  regular  access  to  games  of  chance  by  channelling 
gamblers  into  controlled  circuits,  and  those  which  invite  and  encourage  active 
participation  in  such  games.  A  distinction  must  therefore  be  drawn  between  a 
restrained commercial policy seeking only to capture or retain the existing market for 
the  organisation  with  the  monopoly,  and  an  expansionist  commercial  policy  whose 
aim is to expand the overall market for gaming activities.122 

• 

5.6.2.5.  The overall national policy in the field of gambling 

Consistency of the national policy should also be assessed by reference to the gambling sector 
taken  as  a  whole,  in  particular  in  regard  to  other  types  of  games  of  chance,  which  are  not 
subject  to  the  respective  monopoly.  In  this  context,  the  specific  differences  between  games, 
including their addictive level, should be properly considered. 

The  Court  has  recognised  that  the  various  types  of  games  of  chance  can  exhibit  significant 
differences, particularly as regards the actual way in which they are organised, the size of the 
stakes  and  winnings  by  which  they  are  characterised,  the  number  of  potential  players,  their 
presentation, their frequency, their brevity or repetitive character and the reactions which they 
arouse in players, or by reference to whether, as in the case of games offered in casinos and 
slot  machines  in  casinos  or  other  establishments,  they  require  the  physical  presence  of  the 
player.123 

121 Stoß and Others, par. 103; Dickinger and Ömer, par. 68. 
122  Dickinger  and  Ömer,  par.  69.  Advocate-General  Mazák  concluded  in  the  Stanleybet  International  & 
Sportingbet case that it is apparent from the observations referred to the Court that the expansionist commercial 
policy pursued by the monopolist OPAP and the exclusive right granted to it are "manifestly inconsistent" with 
the purported objective of reducing the betting and gaming opportunities in that Member State, see par. 51 of his 
Opinion.  
123 Stoß and Others, par. 95. The CJEU has also clarified that (prohibited) lotteries and (authorised) other games 
for money, such as football pools or "bingo" might give rise to comparable stakes but they may differ in their 
39 

 
 
                                                 
In those  circumstances, the fact that some types  of  games  are  subject  to  a  public  monopoly 
while  others  are  subject  to  a  system  of  authorisations  issued  to  private  operators  is  not,  in 
itself, capable of affecting the suitability of the monopoly to achieve the relevant objectives 
pursued.124  

However,  in  the  particular  circumstances  of  the  case,  the  Court  acknowledged  that  the 
referring courts "may legitimately be led to consider that the fact that, in relation to games of 
chance other than those covered by the public monopoly […], the competent authorities thus 
conduct  or  tolerate  policies  aimed  at  encouraging  participation  in  those  other  games  rather 
than reducing opportunities for gambling and limiting activities in that area in a consistent and 
systematic  manner,  has  the  effect  that  the  objective  of  preventing  incitement  to  squander 
money  on  gambling  and  combating  addiction  to  the  latter,  which  was  at  the  root  of  the 
establishment  of  the  said  monopoly,  can  no  longer  be  effectively  pursued  by  means  of  the 
latter,  so  that  the  latter  can  no  longer  be  justified  having  regard  to  [Articles  49  and  56 
TFEU]".125 

Measuring  the  level  of  gambling  addiction  requires  an  assessment  of  the  danger  of  certain 
games  of  chance.  In  the  Gaming  machines  case,  for  example,  Norway  had  chosen  to  fight 
gambling  addiction  through  the  reduction  of  gambling  opportunities  by  subjecting  the 
operation of gaming machines to a State-owned monopoly. The EFTA Court considered that 
an  increase  in  gambling  addiction  had  occurred  simultaneously  with  the  increase  in  gaming 
machine  gambling,  and  that 81%  of  the callers of a helpline reported gaming as a problem. 
Studies presented pointed at gaming machines as the single most potentially addictive form of 
gambling, due to the structural characteristics of the machines, such as rapid event frequency, 
the near miss, and light and sound effects. From this, the EFTA Court concluded that gaming 
machines  are  more  dangerous  in  terms  of  leading  to  gambling  addiction  than  other  games 
lawfully  offered  on  the  Norwegian  market.  Even  though  other  games  may  also  lead  to 
gambling addiction, the EFTA Court could not see this on a comparable scale, and considered 
in  this  particular  case  the  marketing  and  development  of  other  games  not  relevant  when 
assessing the consistency of the contested legislation.126 

In  this  context,  the  EFTA  Court  clarified  that  "when  assessing  the  consistency  of  the 
contested  legislation,  it  is,  in  the  light  of  the  overriding  legislative  motivation  of  fighting 
gambling addiction, essential to put the focus on games with comparable effects with respect 
to creating such addiction. Whether and to which extent a given game can lead to gambling 
addiction must  be evaluated by taking into account the specific circumstances,  including  its 
features,  its  presentation,  the  reactions  of  its  potential  consumers  and  the  broader  social-
cultural environment".127  

objects, rules and methods of organisation in which case those games are not in a comparable situation and they 
cannot be assimilated. (Case Schindler, par. 50 and 52; Stoß and Others, par. 94) 
124 Stoß and Others, par. 96. 
125 Stoß and Others, par. 106. 
126 Case Gaming machines, par. 43. 
127 Case Gaming machines, par. 44. 

40 

 
 
                                                                                                                                                         
5.6.3.  A system of licensing 

5.6.3.1.  General 

Licensing systems for certain categories of offline gambling are common in many countries. 
A  growing  number  of  Member  States  is  introducing  licensing  systems  for  the  provision  of 
online gambling services (see chapter 4). These licenses may be issued on the basis of a call 
for  tender  which  sets  out  the  eligibility  requirements.  Once  awarded  the  licence,  its  holder 
will be subject to the national gambling laws and supervisory structure. 

According  to  consistent  case-law  of  the  CJEU,  a  prior  administrative  authorisation  scheme, 
even  though  it  derogates  from  a  fundamental  freedom,  may  be  justified  on  the  basis  of 
objective, non-discriminatory criteria known in advance, in such a way as to circumscribe the 
exercise  of  the  authorities´  discretion  so  that  it  is  not  used  arbitrarily.  Also,  any  person 
affected  by  a  restrictive  measure  based  on  such  derogation  must  have  a  judicial  remedy 
available to them.128 In order to enable the impartiality of the authorisation procedures to be 
monitored, it is also necessary for the competent authorities to base each of  their decisions on 
reasoning which is accessible to the public, stating precisely the reasons for which, as the case 
may be, authorisation has been refused.129 

Case-law  has  developed  as  regards  the  procedure  to  grant  such  licences.  The  principles  of 
transparency, equal treatment and legal certainty appear to apply both in the situation where a 
Member  State  opts  for  an  "open"  system  of  licences  in  which  access  to  a  certain  gambling 
activity is granted to every operator which fulfils the requirements provided by the relevant 
national  law  (such  as  a  bank  guarantee,  absence  of  previous  offences,  etc.),  and  in  the 
situation  where  a  Member  State  establishes  a  “closed”  system  of  licenses  under  which  only 
one or several licences are granted by the national authorities in respect of each of the games 
of chance authorised (see also chapter 5.6.2). 

5.6.3.2.  The principles of transparency, equal treatment and legal certainty 

The  case-law  of  the  CJEU  states  that  public  authorities  which  grant  betting  and  gaming 
licences have a duty to comply with the fundamental rules of the Treaties and, in particular, 
with Articles 49 and 56 TFEU, the principles of equal treatment and of non-discrimination on 
grounds of nationality and the consequent obligation of transparency.130   

The  obligation  of  transparency  applies  if  the  licence  in  question  may  be  of  interest  to  an 
undertaking  located  in  a  Member  State  other  than  that  in  which  the  licence  is  granted.  It 
requires the licensing authority to ensure, for the benefit of any potential tenderer, a degree of 

128 See Sporting Exchange, par. 50, and the case-law cited,  and Garkalns, par. 42. It should be also noted that 
service concessions are currently not governed by any EU directives on public procurement (see, for instance, 
Sporting Exchange, par. 39).  
129 Garkalns, par. 43. 
130 See, to that effect, most recently Costa and Cifone, par. 54 and the case-law cited. 

41 

 
 
 
                                                 
publicity sufficient to enable the licence to be opened up to competition and the impartiality 
of the award procedures to be reviewed, without necessarily implying an obligation to launch 
an invitation to tender. The award of such licences must therefore be based on objective, non-
discriminatory  criteria  which  are  known  in  advance,  in  such  a  way  as  to  circumscribe  the 
exercise of the national authorities’ discretion.131  

The purpose underlying the principle of transparency, which is a corollary of the principle of 
equality, is essentially to ensure that any interested operator may take the decision to tender 
for  contracts  on  the  basis  of  all  the  relevant  information  and  to  preclude  any  risk  of 
favouritism  or  arbitrariness  on  the  part  of  the  licensing  authority.  It  implies  that  all  the 
conditions and detailed rules of the award procedure must be drawn up in a clear, precise and 
unequivocal  manner,  to  make  it  possible  for  all  reasonably  informed  tenderers  exercising 
ordinary care to understand their exact significance and interpret them in the same way, and to 
circumscribe  the  contracting  authority’s  discretion  and  enable  it  to  ascertain  effectively 
whether the tenders submitted satisfy the criteria applying to the relevant procedure.132  

The  principle  of  equal  treatment  requires  moreover  that  all  potential  tenderers  be  afforded 
equality of opportunity and accordingly implies that all tenderers must be subject to the same 
conditions.133 

The principle of legal certainty also requires that rules of law be clear, precise and predictable 
as  regards  their  effects,  in  particular  where  they  may  have  unfavourable  consequences  for 
individuals and undertakings.134   

The CJEU ruled in Costa that the effect of an obligation for new licence holders to observe a 
minimum  distance  between  their  establishments  and  those  already  in  existence  is  to  protect 
the  market  positions  acquired  by  the  operators  who  are  already  established.  This  is  to  the 
detriment of new licence holders, who are compelled to open premises in less commercially 
attractive  locations  than  those  occupied  by  the  former.  Consequently,  any    such    measure 
entails an unequal treatment which could not be justified on the basis of the general interest 
objectives.  As  regards  the  objective  of  combating  of  criminality  by  making  the  operators 
active  in  the  sector  subject  to  control  and  channelling  betting  and  gaming  into  the  systems 
thus  controlled,  the  Court  observed  that  the  rules  on  minimum  distances  were  imposed 
exclusively on new licence holders and not on those already established. It ruled that even if a 
system  of  minimum  distances  between  outlets  were  in  itself  justifiable,  it  could  not  be 
acceptable  for  such  restrictions  to  be  applied  in  circumstances  such  as  those  of  the  cases 
pending before the national court, in which the only operators to be placed at a disadvantage 
would be the new licence holders entering the market.135 

131  Case  Commission  v  Italy,  par.  24  and  the  case-law  cited;  Case  Sporting  Exchange,  par.  40  and  41;  Case 
Engelmann, par. 50, 55; Costa and Cifone, par. 55-56, 72.  
132 See Costa and Cifone, par. 73 and the case-law cited. 
133 Costa and Cifone, par. 57.  
134 See Costa and Cifone, par. 74 and the case-law cited; 
135 Case Costa and Cifone, par. 58, 63-64. 

42 

 
 
                                                 
In Sporting Exchange, the CJEU elaborated the case-law on the principle of transparency. It 
had to rule on the validity of the renewal of a licence to operate games of chance granted to a 
single operator without a competitive tendering procedure.  

The Court recalled that the obligations of equal treatment and transparency is also applicable 
in the situation of such “closed” systems of licences.136 It accepted however an exception to 
the compliance with that obligation in so far as the operator in question is a public operator 
whose management is subject to direct State supervision or a private operator whose activities 
are  subject  to  strict  control  by  the  public  authorities”.137  In  such  situations,  granting  an 
operator with exclusive rights to operate games of chance, or renewing such rights, without 
any competitive tendering procedure would not appear to be disproportionate in the light of 
the  objectives  pursued  by  the  national  legislation  in  question  (protection  of  consumers  and 
combating both crime and gambling addiction).138 

5.6.3.3.  Reserving the grant of licenses to non-profit entities 

The  CJEU  assessed  in  Sjöberg  and  Gerdin  the  compatibility  with  EU  law  of  national 
legislation which makes the award of a licence to organise gambling activities subject to the 
condition  of  the  applicant  being  a  public  or  a  non-profit  organisation.  The  Swedish  law  in 
question prohibited the promotion of gambling legally organised in other Member States and 
the promotion of unlicensed gambling in Sweden.  

The Court underlined that the purpose of the national law was “to ensure that those consumers 
take part in gambling only in the context of the system licensed at national level, thereby in 
particular ensuring that private profit-making interests are excluded from that sector”, which 
is a restriction to the free movement of services.139 It then ruled that “it might be considered 
unacceptable to allow private profit to be drawn from the exploitation of a social evil or the 
weakness  of  players  and  their  misfortune”  and  consequently  that  “according  to  the  scale  of 
values  held  by  each  of  the  Member  States,  and  having  regard  to  the  discretion  available  to 
them,  a  Member  State  may  restrict  the  operation  of  gambling  by  entrusting  it  to  public  or 
charitable bodies”.140 Moreover, the Court considered that the prohibition on the promotion of 
services  of  private  gaming  operators  run  for  profit,  who  would  never  be  entitled  to  obtain 
national licences for the operation of gambling, may be regarded as necessary to meet such an 
objective. 141 

In Ladbrokes, the EFTA Court recalled that the aim of preventing gambling of being a source 
of private profit may in principle justify restrictions on the right of establishment and the free 
movement of services. As an aim in itself, it must be based on a general resentment of games 
of chance for reasons of morality, in particular if it relates to non-addictive games. Thus, the 
aim of preventing gambling from being a source of private profit can serve as a justification 

136 Sporting Exchange, par. 39-51. 
137 Sporting Exchange, par. 59, 62, dictum. 
138 Sporting Exchange, par. 60, 30. 
139 Sjöberg and Gerdin, par. 33. 
140 Sjöberg and Gerdin,, par. 43. 
141 Sjöberg and Gerdin , par. 45.  

43 

 
 
                                                 
only if the restrictive measure (such as the introduction of a State-owned monopoly offering a 
range of gambling opportunities) reflects that moral concern.142 However, national authorities 
cannot be required to oppress all games of chance offered by socially beneficial organisations. 
The acceptance of certain games of chance of a limited volume offered by such organisations, 
typically  in  local  communities,  constitutes  a  reasonable  use  of  statutory  prohibitions  which 
does not fatally undermine the moral position on which the aim is based.143 

5.6.3.4.  Limited number of licences  

Some Member States limit the number of licences, for example to a maximum for a certain 
category of gambling. In Placanica, the national (Italian) law at issue limited the number of 
licenses  for  the  management  of  sport  bets  on  competitive  events  not  involving  horses  (to 
1000),  and  also  the  number  of  licences  for  the  acceptance  of  bets  on  competitive  horse 
events.144  Similarly  to  the  case-law  on  exclusive  rights/monopolies  (see  chapter  5.6.2),  the 
CJEU  made  clear  that  limits  on  the  number  of  operators  are  restrictions  to  the  fundamental 
freedoms which are in principle capable of being justified.145  

Under  the  specific  circumstances  of  Placanica,  the  Court  first  analysed  the  general  interest 
objective of “reducing gambling opportunities”. It ruled that the restrictions on the number of 
operators  “must  in  any  event  reflect  a  concern  to  bring  about  a  genuine  diminution  of 
gambling opportunities and to limit the activities in that sector in a consistent and systematic 
manner”.  In  that  case  it  was  however  common  ground,  according  to  the  national  court,  that 
“the  Italian  legislature  is  pursuing  a  policy  of  expanding  activity  in  the  betting  and  gaming 
sector,  with  the  aim  of  increasing  tax  revenue,  and  that  no  justification  for  the  Italian 
legislation is to be found in the objectives of limiting the propensity of consumers to gamble 
or of curtailing the availability of gambling”.146  

The CJEU turned then to the objective of "combating criminality", which was identified as the 
true goal of Italian legislation at stake. In this context, it underlined that it is possible that a 
policy  of  controlled  expansion  may  be  entirely  consistent  with  the  objective  of  drawing 
players  away  from  clandestine  betting  and  gaming  to  activities  which  are  authorised  and 
regulated. A licensing system may, in those circumstances, constitute an efficient mechanism 
enabling operators active in the betting sector to be controlled with a view to preventing the 
exploitation  of  those  activities  for  criminal  or  fraudulent  purposes.  It  must  nevertheless  be 
ascertained  whether  the  imposed  limitations  satisfy  the  conditions  laid  down  by  the  CJEU 
case-law as regards their proportionality.147 

142 Par. 48, 75 of the judgment. 
143 Par. 75 of the judgment. 
144 Case Placanica, par. 50. 
145  Case  Placanica,  par.  52  et  seq.  In  this  context,  the  Court  ruled  in  Zeturf  that  the  mere  fact  that  the 
authorisation and control of a certain number of private operators may prove more burdensome for the national 
authorities than supervision of a single operator is irrelevant. It is apparent from the case-law of the CJEU that 
administrative inconvenience does not constitute a ground that can justify a restriction on a fundamental freedom 
guaranteed by EU law. (par.  48 of the judgment) 
146 Par. 53-54 of the judgment. 
147 Placanica, par. 55-58. 

44 

 
 
                                                 
5.6.3.5.  Restriction on advertising of licence holders established in another 

Member State 

In its recent case HIT and HIT LARIX, the CJEU assessed the rejection of a permit to carry 
out  advertising  in  Austria  for  gaming  establishments  located  in  Slovenia,  in  particular  for 
casinos. In order for such permit to be granted, the Austrian legislation required that the level 
of protection of gamblers in the Member State of origin should be comparable to the level in 
Austria. It was not in dispute that such national legislation pursues the objective of protecting 
consumers against the risks connected with games of chance. 

The  CJEU  ruled  that  such  authorisation  is  in  principle  capable  of  fulfilling  the  condition  of 
proportionality  if  it  is  limited  to  making  authorisations  to  carry  out  advertising  for  gaming 
operators  established  in  other  Member  States  conditional  upon  the  legislation  of  the  latter 
providing guarantees that are in essence equivalent to those of the national legislation. Such a 
condition does not appear to constitute an excessive burden for operators given the objective 
of  protecting  the  population  against  the  risks  inherent  in  games  of  chance.  The  legislation 
would  however  have  to  be  regarded  as  disproportionate,  if  it  required  the  rules  in  the  other 
Member States to be identical or if it imposed rules not directly related to protection against 
the risks of gaming.148 

5.7. Assessing  the  proportionality  of  specific  corporate  requirements  imposed  on 

gambling operators 

5.7.1.  Seat requirements  

The  CJEU  has  held  that  "the  requirement  that  an  undertaking  create  a  permanent 
establishment or branch in the Member State in which the services are provided runs directly 
counter  to  the  freedom  to  provide  services  since  it  renders  impossible  the  provision  of 
services, in that Member State, by undertakings established in other Member States".149 The 
CJEU  has  furthermore  underlined  that  "if  the  requirement  of  authorization  constitutes  a 
restriction on the freedom to provide services, the requirement of a permanent establishment 
is the very negation of that freedom. For such a requirement to be accepted, it must be shown 
that it constitutes a condition which is indispensable for attaining the objective pursued."150  

The  Court  has  stated  that  a  requirement  for  a  licence  holder  to  have  its  seat  in  the  national 
territory is a discriminatory restriction which can therefore be justified only on the grounds of 
public  policy,  public  security  or  public  health.151  The  Court  has,  in  this  context,  underlined 
that  "it  is  settled  case-law  that  the  concept  of  public  policy,  first,  presumes  that  there  is  a 
genuine and sufficiently serious threat to a fundamental interest of society and, second, must, 

148 HIT and HIT LARIX, par. 28-32. 
149 C-546/07 Commission v Germany, par. 39. 
150 See, inter alia, Case C-452/04 Fidium Finanz AG, ECR [2006] I-09521, par. 46. 
151 Dickinger and Ömer, p.79, Engelmann, p. 34. 

45 

 
 
                                                 
as  a  justification  for  derogation  from  a  fundamental  principle  of  the  Treaty,  be  narrowly 
construed." 152 

In  Engelmann,  the  national  (Austrian)  legislation  provided  that  one  of  the  conditions  for 
granting  concessions  for  the  operation  of  land-based  games  of  chance  was  that  operators 
should have their seat in Austria. The Austrian Government claimed that the purpose of this 
was to permit effective control of operators in the gambling sector, with a view to preventing 
those  activities  from  being  carried  out  for  criminal  or  fraudulent  purposes.  The  obligation 
would permit, in particular, a degree of control to be exercised over the decisions taken by the 
company's organs by reason of the presence of representatives of the State in organs such as 
the supervisory board. 

The CJEU ruled however that, without it being necessary to determine whether that objective 
can fall within the definition of public policy, "the categorical exclusion of operators whose 
seat is in another Member State appears disproportionate, as it goes beyond what is necessary 
to  combat  crime.  There  are  indeed  various  measures  available  to  monitor  the  activities  and 
accounts of such operators".153  

The Court referred, inter alia, to the possibility of requiring separate accounts audited by an 
external  accountant  to  be  kept  for  each  gaming  establishment  of  the  same  operator,  the 
possibility  of  being  systematically  informed  of  the  decisions  adopted  by  the  organs  of  the 
concession holders and the possibility of gathering information concerning their managers and 
principal shareholders. Any gaming establishment in the Member State can be supervised and 
have sanctions imposed on it, regardless of the residence of its managers. Member States can 
also  carry  out  supervision  on  premises  of  the  gaming  establishments  located  in  national 
territory  in  order,  in  particular,  to  prevent  any  fraud  being  committed  by  operators  against 
consumers.154 

In Dickinger and Ömer, the Court assessed a similar condition for the exploitation of online 
casinos.  The  national  (again  Austrian)  law  provided  that  the  holder  of  the  monopoly  of 
operating  lotteries  must  have  its  registered  office  in  national  territory.  According  to  the 
Austrian  Government,  this  obligation  should  allow  effective  monitoring  the  holder  of  the 
monopoly  for  online  casinos,  and  it  is  necessary  to  ensure  effective  supervision  of  the 
operator,  inter  alia  by  the  presence  of  State  commissioners  in  its  supervisory  bodies.  The 
CJEU  ruled  that  it  is  for  the  national  court  to  determine,  first,  whether  the  objectives  in 
question  are  capable  of  falling  within  the  concept  of  public  policy,  and,  if  so,  whether  the 
obligation  concerning 
the  criteria  of  necessity  and 
proportionality.  In  particular,  it  must  be  considered  whether  there  are  other  less  restrictive 
means of ensuring a level of supervision of the activities of operators established in another 

the  registered  office  satisfies 

152 Par. 82 of the Dickinger and Ömer. 
153 Engelmann, par. 37, with reference to, inter alia, the judgments in the cases Gambelli and Placanica. 
154 Engelmann, par. 38-39. 

46 

 
 
                                                 
Member  State  equivalent  to  that  which  can  be  carried  out  in  respect  of  operators  whose 
registered office is in the country of the provision of the service.155 

5.7.2.  Legal form for operators of games of chance  

The CJEU has clarified that the requirement of a particular legal form for operators of games 
of chance such as a public limited company may, by virtue of the obligations binding certain 
kinds of company with respect in particular to their internal organisation, the keeping of their 
accounts, the scrutiny of which they may be subject and their relations with third parties, be 
justified by the objective of preventing money laundering and fraud.156 

5.7.3.  Minimum share capital requirements  

Similarly, the requirement for a share capital of a certain amount may prove to be of use in 
order to ensure a certain financial capacity on the part of the operator and to guarantee that it 
is in a position to meet the obligations contracted towards winning gamblers. The observance 
of the principle of proportionality requires however that the restriction imposed does not go 
beyond what is necessary for achieving the aim pursued, having regard to other possible ways 
of ensuring that the claims of the winning gamblers will be honoured by the operator.157 

5.8. Application of State aid rules 

The  European  Commission  opened,  under  the  EU  state  aid  rules  (Articles  107  and  108 
TFEU), two formal investigations in the field of gambling. One formal final decision has been 
adopted whilst the other one is pending: 

•  Denmark:  here  the  Commission  examined  whether  lower  taxes  for  online  casinos  in 
comparison  to  traditional  casinos  in  Denmark  could  procure  an  anticompetitive 
advantage  for  such  online  casinos.  Denmark  had  decided  to  reform  the  national 
legislation on gambling and betting services and to replace the monopoly regime with 
a  regulated  and  partially  liberalised  one.  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 submits that the measure constituted 
State  aid  as  the  differential  treatment  entails  a  competitive  advantage  for  online 
casinos  as  compared  to  their  land-based  "competitors".  However,  the  Commission 
concluded  that  the  measure  is  compatible  with  the  internal  market  under  Article 
107(3)(c)  TFEU  because  the  overall  balance  of  implementing  the  measure  was 
considered to be positive. If the tax rate for online gambling had been set at the same 
rate or at a similar level as the rate for land-based gambling operators this would have 
led to a situation where the industry and the players would not have responded to the 
possibility of legally providing  online  gambling services on the Danish market. This 

155 See par. 83 and 84 of Dickinger and Ömer. 
156 Dickinger and Ömer, par. 76; Engelmann, par. 28-30. 
157 Dickinger and Ömer, par. 77. 

47 

 
 
                                                 
would  have  defeated  the  objectives  of  general  interest  pursued  by  the  Gaming  Act 
(keep gambling at a moderate level, protect gamblers, ensure public order and prevent 
gambling being used for criminal purposes).158  

•  France: here  the Commission  has  opened the  formal investigation  procedure to examine 
whether  a  parafiscal  tax  (levy)  to  finance  horse  racing  companies  is  in  line  with 
competition  rules  because  of  its  doubts  regarding  the  qualification  of  the  mission 
conferred  on  horseracing  companies  as  a  service  of  general  economic  interest.159  The 
procedure is still to be finalised with a formal decision. 

158  Commission  Decision  2012/140/EU  of  20  September  2011  on  the  measure  C  35/10  (ex  N  302/10)  which 
Denmark is planning to implement in the form of duties for online gambling in the Danish Gambling Duties Act, 
OJ L 68/3 of 7.5.2012. Two appeals to the General Court have been submitted against this decision:  T-601/11 
submitted by the DAB (Danish Amusement Machine Association) and T-615/11 submitted by the Royal Casino 
Aarhus. To be noted, in this context, that the Commission has received other complaints against Member States' 
regulations  imposing different taxation on online and off-line gambling services.   
159 State aid C 34/10 (ex N 140/10) – Levies to finance the public service mission of improvement of the equine 
species  and  the  promotion  of  horse  breeding,  training  in  the  horse  racing  and  breeding  sector  and  rural 
development. See the invitation to summit comments ex Article 108 (2) TFEU in OJ C 10/4 of 14.1.2011.   

48 

 
 
 
                                                 
6.  ADMINISTRATIVE COOPERATION AND EFFICIENT ENFORCEMENT 

The  increased  supply  of  online  gambling  services,  authorised  and  unauthorised,  their  cross-
border  impact  and  the  progressing  regulation  of  gambling  services  in  Member  States  raises 
the immediate question about the need for enhanced administrative cooperation and efficient 
national enforcement. One of the objectives of the Green Paper consultation was to determine 
if greater cooperation at EU level would help Member States to achieve more effectively the 
objectives  of  their  gambling  policy.  The  response  has  been  an  almost  unanimous  call  from 
Member  States,  the  European  Parliament  and  stakeholders  for  an  enhanced  administrative 
cooperation  between  gambling  authorities  at  EU  level.  The  Council  already  stressed  in 
December  2010  in  its  conclusions  on  the  framework  for  gambling  and  betting  in  the  EU 
member states160 that "the cross-border nature of the different issues requires Member States 
to  work  more  closely  together,  and  with  third  countries  where  appropriate,  in  order  to 
address them". 

Set the conditions for a successful administrative cooperation  

The supervisory structure in Member States differs significantly. The role and competences of 
the  gambling  regulatory  authorities  differ,  yet  sufficient  competences  are  crucial  if 
administrative cooperation is to be effective. Albeit administrative cooperation is taking place, 
this is often on an ad-hoc basis and informally. Existing bilateral and multilateral cooperation 
is considered useful by Member States. However they recognise the deficits in terms of the 
quality of information that can be exchanged and the implementation of the decisions taken in 
the ambit of these multilateral structures because frequently these do not meet the needs of a 
regulator.  Outside  the  area  of  sports  administrative  cooperation  with  other  stakeholders  is 
limited.  

Ensure effective enforcement for the achievement of policy objectives 

The Green Paper also highlighted the importance of effective enforcement for Member States 
to  ensure  the  achievement  of  the  public  interest  objectives  behind  their  national  gambling 
policy.  Effective  enforcement  encompasses  the  organisational  structure  and  competences  of 
the  national  gambling  authority,  adequate  administrative  cooperation  with  other  regulators 
and suitable enforcement tools. The responses to the Green Paper show a relative absence of 
preventive  enforcement  methods.  While  responsive  enforcement  methods  are  used  by  some 
Member States there is still a lack of information and of experience on these methods in the 
EU. Therefore, the efficiency, technical limits and costs of responsive enforcement methods 
need to be discussed.  

6.1. The regulatory authority 

The effective implementation and enforcement of gambling rules and an efficient cross-border 
administrative cooperation requires strong institutional arrangement in Member States.  

160  Conclusions  on 
the  EU  member  states,  3057th 
COMPETITIVENESS (Internal Market, Industry, Research and Space) Council meeting, Brussels, 10 December 
2010 

the  framework  for  gambling  and  betting 

in 

49 

 
 
                                                 
6.1.1.  Role and competences of regulators 

In the EU the role and competences of gambling regulators differ amongst Member States in 
terms  of  powers  and  scope.  Whilst  more  and  more  Member  States  establish  independent 
regulatory bodies, normally in parallel with the introduction of an open licensing system for 
the offering of online gambling services, the majority of Member States still entrust a specific 
department  within  a  Ministry  (mainly  within  the  Ministry  responsible  for  finance  or  the 
interior)  with  the  task  of  regulating  and  supervising  the  gambling  market.  Having  said  this, 
the  regulation  and  supervision  of  gambling  services  can  be  the  competence  of  several 
authorities,  depending  for  example  on  the  type  of  game  regulated  or  the  channel  of 
distribution.  

6.1.2.  Institutional arrangements 

In a rapidly developing market, it is essential for regulators to understand the business and the 
technology and to have up-to-date information. This assists regulators not only when setting 
licensing/authorisation requirements but also in the supervision of the licence holders and the 
enforcement  of  the  national  gambling  rules.  Today  a  number  of  regulators  in  the  EU  lack 
experience  with  online  gambling  regulation.  In  other  cases  regulatory  authorities  have  not 
been  set  up  or  suffer  from  limited  staff  and  resources.  In  the  workshop  organised  by  the 
Commission  on  efficient  national  enforcement  measures  and  administrative  cooperation  a 
number of regulators expressed a lack of experience with online gambling regulation, due to 
their unregulated or newly regulated markets, as well as their desire to draw knowledge from 
the more experienced regulators161. 

Regulators  need  to  have  a  coherent  legal  basis,  be  adequately  resourced  and  have  rules  and 
procedures  that  are  fit  for  purpose.  A  number  of  regulators  deem  that  a  regulator's  powers 
should  cover  all  forms  of  gambling  (online  and  land-based).  Sufficient  competences  are 
crucial  for  effective  administrative  cooperation  with  regulatory  authorities  in  other  Member 
States. Effective cooperation could be hampered by the fact that not every Member State has a 
single,  central  and  independent  gaming  regulatory  authority.  Also  the  European  Parliament 
considers the establishment of a regulator with suitable powers in each Member State to be a 
necessary step towards more effective regulatory cooperation. 

All  Member  States  are  therefore  encouraged  to  set  up  a  regulatory  authority  with  an 
appropriate  structure  and  powers  or  embedded  in  an  appropriate  network  of  competent 
authorities at national level to ensure appropriate administrative cooperation. Regulators need 
to  have  proper  competences  and  engage  in  cooperation  with  relevant  authorities  at  national 
level in order to meet demands for cooperation from other Member States' regulators and not 
fall short of their expectations.  

6.2. Administrative cooperation 

161 http://ec.europa.eu/internal_market/services/docs/gambling/workshops/workshop-v-conclusions_en.pdf  

50 

 
 
 
                                                 
Enhanced administrative cooperation is imperative to meet today's regulatory challenges. The 
European  Parliament  calls  for  cooperation  among  national  regulatory  bodies  to  be 
considerably expanded, giving them a sufficient remit, with the Commission as coordinator, 
to develop common standards and take joint action against online gambling operators which 
operate without the required national licence. 

6.2.1.  Existing administrative cooperation 

Today administrative cooperation is organised in multilateral or bilateral agreements, mainly 
with  a  view  to  discuss  and  exchange  information  and  best  practices  on  gambling-related 
issues. 

Multilateral cooperation 

Multilateral  cooperation  between  gambling  regulators  has  been  ongoing  since  the  1980′s.  It 
takes place in two regulatory organisations, in which Member States participate: the Gaming 
Regulators  European  Forum  (GREF)162  and  the  International  Association  of  Gambling 
Regulators (IAGR)163. 

IAGR  is  a  world-wide  organisation  including  members  from  the  EU  (Austria,  Belgium, 
Bulgaria,  Denmark,  Finland,  Hungary,  Latvia,  Lithuania,  Malta,  the  Netherlands,  Poland, 
Portugal,  Slovenia,  Spain,  Sweden,  the  UK).  The  mission  of  IAGR  is  to  advance  the 
effectiveness and efficiency of gaming regulation. GREF is the only multilateral organization 
that concentrates on European countries. Regulators from most but not all Member States are 
active members of GREF. GREF’s main importance is described as providing a forum for the 
competent  authorities  to  meet  both  at  formal  and  informal  level,  exchange  information  and 
views  and  learn  from  the  different  approaches of  the  participating  countries  (best  practices) 
regarding land-based and remote gambling. GREF serves as a body to represent the different 
views  of  European  gambling  regulators  and  also  provide  a  central  point  of  contact  for 
enquiries directed at them from authorities or related organisations in Europe and elsewhere. 
Both,  GREF  and  IAGR,  have  established  eGambling  working  groups.  The  work  focuses 
primarily on getting a common understanding of the risks and the options for dealing with the 
risks  in  terms  of  consumer  protection,  ensuring  gambling  is  fair  and  keeping  crime  out  of 
gambling. 

Existing  multilateral  cooperation  has  been  successful  in  sharing  experiences  and  good 
practice.  The  group  has  produced  good  practice  guidelines  for  internet  gambling.  Members 
learn  from  one  another  and  discuss  particular  challenges  of  gambling  regulation  and 
enforcement,  on  a  non-political  and  technical  basis.  However  the  work  and  the  results 
achieved seem to be limited due to the scope and mandate of the organisations and a number 
of constraints on the exchange of information and data. The informal structure and the non-
binding character of statements and recommendations  discussed impede the  development of 
common policies and measures. 

162 http://www.gref.net/ 
163 http://www.iagr.org/ 

51 

 
 
                                                 
Bilateral cooperation agreements  

More  recently  Member  States'  regulators  have  started  to  enter  into  bilateral  cooperation 
agreements. On 28 June 2011 the French and Italian gambling authorities signed a first cross-
border cooperation agreement.164 The purpose of the agreement is to improve the enforcement 
of the respective national regulatory systems and the effectiveness of the regulatory work by 
sharing  information  and  experience  in  four  key  areas:  compliance  checks  on  operators 
licensed  in  both  countries  and  adoption  of  player  protection  measures,  institutional 
communication strategies, preventing fraud in the sports sector and the fight against websites 
of unauthorised operators. 

In  May  2012  Denmark  and  Malta  entered  into  a  cooperation  agreement.165  The  two 
jurisdictions intend to exchange information in particular to enhance and facilitate respective 
licensing  processes  and  the  monitoring  of  licence  holders,  to  protect  young  and  vulnerable 
groups  and  to  protect  players.  The  agreement  also  raises  the  issues  of  equipment  location 
parameters and common use of B2B service providers. The Member States aim to cooperate 
on enforcement  of  their gambling laws regarding joint  licensees  and  to  collaborate  on areas 
such  as  non-duplication  of  requirements  and  controls,  shared  responsible  gaming  initiatives 
and employee exchange programmes. 

Denmark has signed agreements with a number of jurisdictions, such as Alderney, Gibraltar 
and  the  Isle  of  Man,  in  order  to  establish  a  formal  basis  for  cooperation  and  information 
sharing between the competent authorities. 

Bilateral  cooperation  allows  for  a  better  adaptation  of  the  scope  and  content  of  the 
cooperation to the individual needs of the parties and can be more effective than multilateral 
cooperation.  However,  by  its  very  nature  it  covers  only  two  Member  States  and  does  not 
allow  for  common  initiatives  tackling  the  existing  challenges  in  the  cross-border  online 
gambling market. Bilateral cooperation agreements furthermore require sufficient resources if 
entered into with a number of Member States. 

Existing  bilateral  and  multilateral  cooperation  agreements  help  Member  States  in  their 
regulatory  work  and  have  proved  useful  in  achieving  a  certain  degree  of  cross-border 
cooperation. These  agreements  however have deficits in terms  of  the quality of  information 
that can be exchanged and the implementation of decisions taken in multilateral structures and 
thus often does not meet needs of a regulator. Member States miss appropriate structures for 
the exchange of information as well as focussed discussions and an appropriate follow-up on 
agreed implemented programmes.  

6.2.2.  Areas for administrative cooperation 

Successful administrative cooperation requires a clear definition of the areas Member States 
can request and exchange information on and develop common actions and initiatives.  

164 http://www.arjel.fr/IMG/pdf/20110628CP.pdf 
165 http://www.lga.org.mt/lga/content.aspx?id=319936 

52 

 
 
                                                 
In the conclusions on the framework for gambling and betting in the EU Member States the 
Council concluded that the cooperation between the Member States seems required to assess 
the scope, possibilities and mechanisms, in order: 

• 
• 
• 
• 

to share information on gambling operators, 
to protect consumers, minors and ensure the integrity of games, 
to minimize, where possible, any unnecessary administrative burdens, 
to  identify  and  share  best  practices  in  relation  to  for  example  player  protection, 
technological tools for effective regulation and responsible gambling measures. 

The  development  and  implementation  of  technical  solutions  such  as  cross-border  B2B 
licences or cloud computing in the gambling sector might pose further challenges in terms of 
multijurisdictional regulation and increases the need for enhanced cooperation.  

The  level  of  administrative  cooperation  depends  on  the  information  and  data  that  can  be 
exchanged between gambling regulators. In terms of the quality of the information and data 
and  the  conditions  for  sharing  it  a  distinction  can  already  be  made  between  sharing 
information of a more general nature and sharing information and data on specific issues.  

General information sharing would concern  

• 

• 

• 

National  legislation  governing  online  gambling  and  the  competences  of  the  national 
authorities regulating gambling, 
Experience  and  best  practice  regarding  the  enforcement  and  supervision  of  national 
online gambling regulations, consumer protection, gambling addiction, prevention of 
fraud and money laundering, ensuring the integrity of sports, 
Authorisation/licensing conditions for operators seeking to operate in a Member State, 
including information on testing and certification of gambling equipment. 

Information and data exchange on specific issues would cover 

• 
• 
• 

• 

Applicants at the pre-licensing stage, 
Testing results and certification of gaming equipment, software, games to be offered, 
Post-licensing information exchange such as  
o  monitoring of authorised operators,  
o  enforcement of applicable rules for consumer protection,  
o  enforcement of applicable rules prevention of fraud  and of money laundering,  
o  operators' compliance with applicable legislation and/or licence conditions,  
o  any breach by operators of their license conditions,  
o  audit reports/findings,  
o 
licensees suspended,  
o  customer interaction, and 
o 
Consumers/players such as  
o  exclusion lists or barred citizens,  
o 

identity checks for the purpose of age verification,  

 complaints against authorised operators, 

53 

 
 
o 

identity  checks  for  the  purpose  of  crime  prevention  (identity  theft,  money 
laundering), 

• 

Illegal unregulated operators such as  
o 
o 
o 
o 

their identity,  
the means used to detect them,  
the means used to prevent them from operating in the jurisdiction, and  
interaction with the authority/jurisdiction authorising them (where this exists). 

6.2.3.  Tools for administrative cooperation 

Administrative cooperation will only work if arrangements are put in place defining why, on 
what and how regulators should cooperate. Many responses to the Green Paper consultation 
see  a  crucial  role  for  the  Commission  in  organising  administrative  cooperation  among 
Member  States.  The  Commission  is  called  on  to  create  a  structure  for  administrative 
cooperation and to assist this cooperation, in order to ensure focused discussions as well as an 
appropriate  follow-up  on  agreed  implemented  programmes.  In  exploring  how  to  improve 
administrative cooperation in the EU two different goals have to be distinguished: (1) involve 
the  Member  States  in  the  development  and  implementation  of  an  EU  policy  on  online 
gambling  services  and  (2)  provide  a  structure  for  the  coordination  of  administrative 
cooperation between Member States. Both are needed. 

Involve  Member  States  in  the  development  and  implementation  of  an  EU  policy  on 
online gambling services  

The  Communication  "Towards  a  comprehensive  European  framework  for  online  gambling" 
and this Commission Staff Working Paper define an action plan identifying initiatives to be 
taken at national and EU level in response to key challenges for the regulation of gambling 
services. In order to better involve Member States in the development and implementation of 
an EU policy on online gambling services the Commission will establish an expert group on 
gambling.  The  expert  group,  composed  of  representatives  of  Member  States,  will  provide 
advice  and  expertise  on  the  preparation  of  EU  initiatives.  It  will  also  be  tasked  with 
facilitating  the  development  of  mutual  understanding  and  the  exchange  of  information  and 
best practices. Several Member States have called for the establishment of an expert group by 
the  Commission.  Stakeholder  experts  may  be  invited  to  the  expert  group,  in  line  with 
respective Commission procedures. 

Provide  a  structure  for  the  strengthening  of  administrative  cooperation  between 
Member States  

In order to strengthen cooperation assisting Member States and gambling regulators in their 
regulatory and supervisory work and responding to daily and operational needs an appropriate 
structure  for  administrative  cooperation  between  Member  States  needs  to  be  in  place.  This 
corresponds to a request from the European Parliament calling on the Commission to explore 
– in keeping with the principle of ‘active subsidiarity’ – all possible tools or measures at the 
EU  level  designed  to  protect  vulnerable  consumers,  prevent  addiction  and  combat  illegal 

54 

 
 
operators  in  the  field  of  gambling,  including  formalised  cooperation  between  national 
regulators. The structure such formalised cooperation between national regulators could take 
however  depends  to  a  large  extent  on  the  kind  of  information  and  data  to  be  exchanged 
between the authorities.  

As a first step cooperation needs to focus on exchange of more general information and best 
practices, in order to share  intelligence,  reduce administrative burdens and build confidence 
and  trust  between  regulators.  Member  States  have  suggested  that  regulators  should  start 
collaborating on common objectives. 

In order to facilitate this cooperation the Commission will set out, together with all EU/EEA 
regulators  and  in  cooperation  with  Member  States,  the  objectives  of  cooperation,  common 
principles  and  cooperation  arrangements.  Ultimately,  the  aim  is  to  facilitate  cooperation 
between the all EU/EEA regulators, setting out the arrangements for sharing of information, 
views  and  assessments,  and  preparing  for  the  management  and  resolution  of  cross-border 
issues. 

The advantage of a step-by-step approach as regards administrative cooperation is the general 
acceptance  of  all  Member  States  and  the  prospect  of  immediate  implementation.  It  may  be 
general  in  scope  and  requests  for  information  or  intelligence  exchange  may  be  more  on  a 
case-by-case basis, entailing therefore a degree of administrative work. In the long term this 
may not suffice to deal with the challenges of the online gambling market adequately as inter 
alia it may not facilitate the exchange of information on applicant licensees and on authorised 
operators  (eg  minimal  application  process  requirements  met,  such  as  financial  stability  of 
company,  shareholders,  certified  technical  equipment  and  software,  monitoring,  complaints 
by  customers,  interaction  with  regulator),  and  it  will  not  allow  for  the  use  of  existing 
instruments  for  mutual  assistance  and  administrative  cooperation  in  the  EU,  such  as  the 
Internal Market Information system (IMI)166. 

Therefore,  in  a  second  step  cooperation  could  be  extended  to  exchange  of  information  on 
operators  and  players.  This  will  enable  administrative  cooperation  to  be  fully  functional. 
However, the challenge will be to define the kind of information to be shared and to put the 
right infrastructure in place to guarantee protection and reliability of data.  

The  EU  has  a  solid  data  protection  legal  framework.  The  exchange  of  information  between 
Member  States  should  comply  with  the  rules  on  the  protection  of  personal  data  in  the  Data 
Protection  Directive.  The  processing  of  personal  data  under  EU  Law  may  only  take  place 
under  certain  conditions  and  in  accordance  with  a  set  of  principles.  EU  law  furthermore 
requires an adequate and specific legal basis for the processing of personal data.  

In  its  conclusions  on  the  framework  for  gambling  and  betting  in  the  EU  member  states  the 
Council  concluded  that  IMI  could  become  a  useful  tool  in  order  to  facilitate  administrative 
cooperation167. This has been reiterated by a number of Member States and stakeholders in the 

166 About IMI: http://ec.europa.eu/internal_market/imi-net/index_en.html 
167 3057th COMPETITIVENESS (Internal Market, Industry, Research and Space) Council meeting 

55 

 
 
                                                 
consultation.  The  European  Parliament  states  that  IMI  could  serve  as  the  basis  for  more 
effective  cooperation  among  national  regulatory  bodies.  IMI  is  a  software  application 
accessible  via  the  Internet,  developed  by  the  Commission  in  cooperation  with  the  Member 
States,  in  order  to  assist  Member  States  with  the  practical  implementation  of  information 
exchange  agreements  by  providing  a  centralised  communication  mechanism  to  facilitate 
cross-border  exchange  of  information  and  mutual  assistance.  In  particular,  IMI  helps 
competent  authorities  to  identify  their  counterpart  in  another  Member  State,  manage  the 
exchange  of  information,  including  personal  data,  on  the  basis  of  simple  and  unified 
procedures  and  overcome  language  barriers  on  the  basis  of  pre-defined  and  pre-translated 
workflows. 

The Commission proposal for a Regulation on administrative cooperation through IMI168 is to 
create  the  possibility  to  launch  IMI  pilot  projects  to  test  the  use  of  IMI  for  administrative 
cooperation, including the exchange of personal data, in any single market area. In practice, 
IMI  guarantees  a  high  level  of  technical  and  procedural  data  protection.  The  processing  of 
personal data in IMI offers a considerably higher level of protection and security than other 
methods  of  information  exchange  such  as  mail,  telephone,  fax  or  e-mail.  In  addition,  data 
protection considerations are addressed in the day-to-day use of the system. The Commission 
will therefore, through a dialogue with Member States, explore further the possibilities for an 
exchange of personal data, in particular through the application of IMI and in compliance with 
applicable data protection rules.  

The  Regulation  on  Consumer  Protection  Cooperation169  sets  up  an  EU-wide  network  of 
national  enforcement  authorities  with  similar  investigation  and  enforcement  powers 
investigating  possible  breaches  of  consumer  laws  and  to  take  action  against  traders.  The 
network seeks to tackle breaches of consumer law in areas such as misleading advertising and 
distance selling. The Regulation further sets out supporting measures to foster expertise and 
cooperation  between  authorities  as  well  as  the  possibility  of  international  cooperation 
agreements with third countries. The Commission will further assess the use of this tool and 
may  draw  from  this  network  in  seeking  to  facilitate  administrative  cooperation  amongst 
regulators. 

6.2.4.  Cooperation with other enforcement bodies and stakeholders 

In the Commission's workshop on efficient national enforcement measures and administrative 
cooperation participants considered cooperation with other enforcement bodies and dialogue 
with industry (not only operators but also related services such as hardware and software IT 
providers and consumer associations) crucial to properly regulate the market as well as share 
knowledge  and  experience.  Cooperation  on  criminal  investigations  should  be  improved. 
Dialogue  with  industry  can  be  formal  or  informal  or  on  an  ad-hoc  basis.  Regulators  and 

168 The proposal for a Regulation is envisaged to be adopted by the European Parliament and the Council before 
the end of 2012. 
169  Regulation  (EC)  No  2006/2004  of  the  European  Parliament  and  of  the  Council  of  27  October  2004  on 
cooperation  between  national  authorities  responsible  for  the  enforcement  of  consumer  protection  laws  (the 
Regulation on consumer protection cooperation) 

56 

 
 
                                                 
industry alike stressed that continuous cooperation and dialogue can only benefit the quality 
and efficacy of regulation. 

The Commission therefore encourages Member States to ensure cooperation between relevant 
competent  authorities  at  regional  and  national  level,  such  as  enforcement  and  consumer 
organisations. In order to respond to the regulatory challenges of a technologically complex 
and fast developing market regulators should also engage in a constructive dialogue with the 
industry sectors concerned. 

6.2.5.  Cooperation with third countries 

The  challenges  in  the  online  gambling  market  are  of  a  transnational  character,  often 
originating  from  outside  the  EU  borders.  With  regard  to  illegal  offers  from  third  countries 
regulators have little or no contact with relevant authorities in other parts of the world, often 
because no such regulators or contact points exist, making it difficult for the regulators of the 
Member  States  to  follow-up  on  operators  from  such  countries  (e.g.  Asian  ones).  In  some 
instances  regulators  use  established  networks  in  other  industry  sectors,  such  as  financial 
services, for information sharing.  

Currently no agreements exist between the EU and third countries covering gambling related 
issues.  However,  Member  States  almost  unanimously  call  on  the  Commission  to  coordinate 
actions and initiatives toward third countries. 

The Commission will together with Member States identify the issues that need to be raised 
with  third  countries  and  will  seek  to  strengthen  the  dialogue  with  these  countries.  Existing 
international  information  and  intelligence  exchange  mechanisms  need  to  be  understood  and 
better exploited. 

6.3. Enforcement measures 

The  success  of  a  national  gambling  policy  also  depends  on  a  Member  States'  ability  to 
effectively enforce its national rules. For this purpose Member States can use preventive and 
responsive enforcement measures. 

6.3.1.  Preventive enforcement measures 

Preventive  enforcement  means  aim  at  reducing  the  contact  of  citizens  with  the  unregulated 
gambling  offer  and  ensuring  compliance  with  national  gambling  rules  and  common 
principles. 

Inform players about the available legal offer 

Today many players are not aware of or ignore if and where a gambling service is authorised. 
In order to enforce national gambling rules players need to be enabled to make a distinction 
between authorised and unauthorised gambling services offered online. Member States should 
therefore  explore  means  encouraging  users  to  play  on  websites  of  authorised  operators  as 
opposed to websites of unauthorised operators providing services without a licence. 

57 

 
 
While many Member States have information campaigns to inform consumers about the risks 
of gambling the Commission has little information about campaigns held to inform consumers 
about  the  availability  of  an  authorised  offer  and  the  specific  risks  of  using  unauthorised 
gambling services provided without a licence.  

One way of informing players about the reliability of a gambling service offered online is the 
use of trustmarks, issued by gambling regulators to authorised operators. They exist in several 
jurisdictions and players are thus better able to identify if a gambling site is licensed and by 
which  jurisdiction.  Nonetheless,  the  question  remains  as  to  effective  such  trustmarks  are  in 
channelling  players  to  regulated  websites,  in  particular  without  complementary  promotional 
campaigns enabling player recognition. In the Commission's workshop on enforcement views 
differed  on  the  impact  that  trustmarks  have  on  consumers  in  choosing  an  operator  over 
another. 

The  Commission  will  explore,  together  with  Member  States,  best  practices  for  consumer 
information and education. 

Understand citizens' choice/behaviour 

Many  EU  citizens  purchase  online  gambling  services  for  entertainment  purposes.  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 online gambling services across 
borders. It was highlighted in many responses to the Green Paper, from Member States and 
stakeholders alike, that in order to channel these requests into the authorised national market a 
Member State will have to provide an attractive authorised offer.  

Responsible Business Conduct 

Naturally,  industry  inherently  has  an  important  role  to  play  in  the  enforcement  of  national 
gambling  rules.  The  nature  of  the  internet  allows  consumers  to  access  gambling  services 
cross-border.  Very  often  Member  States  require  a  national  licence  for  the  offering  of 
gambling  services  to  a  citizen.  In  order  to  ensure  the  effectiveness  of  national  gambling 
regimes  operators  need  to  respect  these  regimes  and  refrain  from  offering  their  services  to 
consumers if not authorised to do so.  

At the same time industry can and has launched its own initiatives to ensure the attainment of 
policy objectives. The European Committee for Standardisation (CEN) workshop agreement 
on  responsible  remote  gambling  measures170  for  example  was  initiated  by  the  gambling 
operators.  The  CEN  workshop  agreement  developed  a  set  of  control  measures  designed  to 
ensure  the  adequate  protection  of  customers  and  the  responsible  behaviour  of  gambling 
operators, software suppliers and associated service providers. 

Appropriate reporting obligations and supervision of licensees 

170 ftp://ftp.cen.eu/cen/AboutUs/Publications/GamblingMeasures.pdf  

58 

 
 
                                                 
A  thorough  post-licensing  process  is  imperative  to  ensure  full  compliance  of  authorised 
operators with the respective national regulatory regime. In order to have a full understanding 
of the market and of the regulated entities that are operating it is crucial to collect information 
from all relevant sources not only from the regulated operators. Establishing the information 
requirements, collecting and processing the information are key challenges for regulators.  

In an online and technology-based sector the monitoring of gambling transactions between the 
player and the operator and access to the operators' server are considered essential for proper 
supervision  of  authorised  gambling  operations.  In  some  Member  States  monitoring  of 
gambling transactions is conducted in real time. Access to the server is important to perform 
the monitoring of gambling transactions and of the operator's compliance with the licensing 
requirements.  In  order  to  have  access  to  an  operator's  server  it  does  not  seem  necessary  to 
have  the  server  located  in  the  Member  State  where  a  game  is  offered.  From  the  authorities 
present  in  the  Commission's  workshop  on  efficient  national  enforcement  measures  and 
administrative  cooperation  only  few  regulators  consider  the  location  of  the  server  in  the 
recipient Member State as essential while the majority of regulators do not see a need for such 
requirement from a technological standpoint. Instead, access to servers at a distance, central 
control units and real time control through technical supervisory tools (allowing, for example, 
for  "know  your  customer"  (KYC)  checks  by  operators,  central  list  of  excluded  players  and 
storage of players' balances) were considered far more efficient and appropriate, provided that 
the  information  is  processed  and  analysed  adequately.  Ensuring  the  accuracy  of  data  is 
considered more important than physical access to it. Software and hardware certification can 
play an important role in this respect. Duplication of IT infrastructure furthermore increases 
the complexity of a system without necessarily facilitating access to information.  

However,  while  technology  is  an  important  enforcement  tool  many  regulators  have 
highlighted that it should not be overestimated. They consider direct contact with operators to 
be at least equally important. 

Together  with  Member  States  the  Commission  will  discuss  the  necessary  means  for  the 
supervision  of  authorised  gambling  operators  and  explore  methods  and  technologies  for 
remote  supervision.  The  Commission  could  promote  best  practices  for  this  important 
regulatory task. 

Administrative cooperation  

Enhancing  administrative  cooperation  amongst  public  authorities,  including  enforcement 
bodies, and with the gambling operators and other relevant stakeholders will further improve 
the quality of enforcement. 

6.3.2.  Responsive enforcement measures  

Responsive  enforcement  measures  should  provide  the  appropriate  tools  to  cater  for  those 
cases  where  gambling  operators  or  other  relevant  service  providers  do  not  comply  with 
national  rules.  Member  States  are  in  need  of  means  for  the  execution  of  administrative 
decisions  prohibiting  the  provision  of  unauthorised  gambling  services  in  cases  where  an 
59 

 
 
operator  fails  to  implement  a  decision  prohibiting  the  offer.  Technical  enforcement  means 
available have certain benefits but also a number of significant shortcomings. As responsive 
enforcement  measures  directly  impact  not  only  on  the  rights  of  the  player  but  also  of  the 
service providers they require a proper legal basis in national law.  

Blocking access to websites 

Blocking access to websites is used in a number of Member States in order to enforce national 
gambling rules. This is the case at least in Belgium, Estonia, France and Italy. Other Member 
States have provisions for blocking access to websites in their national gambling laws but are 
currently  not  applying  them,  such  as  Denmark.  While  in  principle  two  main  methods  are 
available for blocking access to websites, Domain Name System (DNS) filtering and Internet 
Protocol  (IP)  blocking,  most  Member  States  applying  blocking  methods  seem  to  use  DNS 
filtering: 

In order to access a website, rather than having to write the full IP address (which is actually 
the  ‘location’  where  the  content  really  is  on  the  worldwide  network),  it  is  possible  to  use  a 
domain  name.  A  domain  name  is  an  alias  to  an  IP  address,  and  an  IP  address  can  have  an 
unlimited amount of aliases. A domain name looks like http://europa.eu. To ensure that these 
aliases work, a matching table associates a precise domain name to a specific IP address; they 
are provided by the DNS Servers. 

An example: 

1. 
2. 
3. 

4. 

The Internet user opens a web browser and types "europa.eu"; 
The browser asks the DNS servers which IP address is associated with "europa.eu"; 
The  DNS  server  checks  its  matching  table  and,  if  a  match  is  found,  it  answers  by 
giving the associated IP address ‘123.345.567.789’; 
The browser contacts the given IP address and tries to access its content. 

DNS blocking occurs at Step 3. Instead of answering the real IP address which is associated to 
the  given  alias,  the  DNS  Server  answers  with  another  IP  address  which  is,  in  most  of  the 
cases,  owned  by  a  governmental  service  such  as  the  police  or,  in  the  case  of  gambling,  the 
gambling authority. 

National procedures 

Procedures  for  the  rules  for  blocking  access  to  websites  offering  unauthorised  gambling 
services  differ  between  Member  States.  Gambling  authorities  are  either  authorised  to  order 
internet  service  providers  (ISPs)  directly  to  block  access  to  websites  identified  by  the 
regulator or they first have to seek a court order: 

In  the  first  case,  the  gambling  authority  is  authorised  to  issue  a  list  of  websites  providing 
unauthorised gaming services. The list, which is regularly updated, is communicated to ISPs, 
which have to deny access to listed websites, normally by redirecting players to a regulator's 
website  informing  them  that  they  were  trying  to  access  a  website  offering  an  unauthorised 

60 

 
 
gambling service. The gambling authority can also be empowered to impose fines on ISPs for 
any breach of their blocking obligations. 

In the latter case, a court, upon an application by the gambling authority, may order a provider 
of information society services to restrict access to websites through which online gambling 
services  are  provided  without  authorisation.  Before  applying  for  a  Court  decision  the 
gambling  authority  will  have  to  request  the  gambling  operator  to  cease  its  activities  in  the 
Member State and the operator has to fail to abide by this decision. Member States associate a 
number of benefits with blocking access to websites. It is considered as a communication tool, 
providing information to consumers in terms of what are authorised and unauthorised offers 
under  national  law.  Citizens  are  thus  made  aware  of  the  existence  of  authorised  and 
unauthorised gambling services offered online. For those who do not wish to use unauthorised 
operators  or  first  time  gamblers  blocking  can  serve  as  an  effective  deterrent.  Authorised 
operators and consumers consider state control as beneficial. 

However, blocking access to websites does not work as an isolated enforcement tool and can 
be easily circumvented. Moreover, depending on the technology used, website blocking can 
impact on legitimate businesses. The efficiency of the blocking method furthermore depends 
on the validity of the list of blocked websites. Keeping the list up-to-date requires significant 
resources  while  internet  addresses  can  be  changed  instantly.  Lastly,  ISPs  are  faced  with  the 
implementation of the provisions for blocking access to websites, not only implying costs and 
tying-up of resources but also creating potential liability issues. 

EU framework 

The  E-Commerce  Directive  provides  for  exemptions  from  liability  for  information  society 
service providers when they host or transmit illegal content that has been provided by a third 
party.  Information  society  service  providers  can  under  certain  conditions  benefit  from  these 
exemptions when they provide one of the so-called intermediary services set out in Articles 
12 to 14 of the Directive. Moreover, Article 15 of the Directive prohibits Member States from 
imposing  on  providers  of  these  services  a  general  obligation  to  monitor  content  that  they 
transmit  or  host.  The  Directive  provides  for  a  technologically  neutral  framework  and  the 
liability regime strikes a balance between the several interests at stake, in particular between 
the development of intermediary services, the societal interest that illegal information is taken 
down quickly, and the protection of fundamental rights. 

Article  14 of the E-Commerce Directive contains the basis for  procedures for  notifying and 
acting on online illegal content. It provides that hosting providers, in order to benefit from a 
liability  exemption,  should  act  expeditiously  to  remove  (take  down)  or  to  disable  access  to 
(block) illegal activity or information of which they have obtained actual knowledge.  

EU initiative 

The E-Commerce Directive provides the basis for Member States' rules on blocking access to 
websites  of  unauthorised  gambling  operators.  As  announced  in  the  Communication  on  the 
"Completing  the  Digital  Single  Market  –  A  coherent  framework  for  building  trust  in  the 
61 

 
 
Digital  Single market for E-commerce and online services",171 the Commission services are 
preparing  an  initiative  on  procedures  for  notifying  and  acting  on  illegal  online  content.  The 
cross-border nature of the Internet, the lack of development of regulatory codes at European 
level and conflicting jurisprudence within and across Member States justify an analysis of the 
need for EU action. The initiative will have a horizontal scope in the sense that it will cover 
all types of online services (not only gambling but also entertainment, adult, health, etc.)172. 

Blocking payments between players and operators 

A  number  of  Member  States,  such  as  Belgium,  Denmark,  France,  and  Germany,  are 
introducing or have introduced provisions in their national gambling laws on the blocking of 
payments between players and gambling operators not authorised to offer their services in the 
Member State. Different payment means are offered and used in gambling transactions. The 
methods  for  blocking  payments  between  the  player  and  the  gambling  operator  and  their 
efficiency depend on the payment means used: 

•  Payment  blocking  for  card  payments  is  based  on  the  Merchant  Category  Code  (MCC) 
used  by  the  merchant,  i.e.  gambling  operator.  All  card  transactions  are  tagged  with  a 
specific  four-digit  identifier,  the  MCC.  This  number  is  based  on  ISO  standards  and  is 
applied globally by issuing and acquiring member banks. The purpose of the MCC is to 
identify  the  goods  or  services  the  merchant  provides  or  to  classify  the  nature  of  the 
merchant’s  business.  MCC  7995  is  the  universal  identifier  for  gaming  and  gambling 
merchants and is linked to all transactions from these merchants. It covers all transactions 
(face  to  face  and  online)  from  merchants  that  provide  betting,  lottery  tickets,  casino 
gambling chips, off-track betting and wagers at racetracks. 

•  The prohibition of processing payments is undertaken via the blocking of payment orders 
where cards are using MCC 7995. Payment for authorised gambling services in a Member 
State  is  approved  using  of  the  respective  country  code  in  combination  with  MCC  7995. 
Payment service providers covered by the regulations therefore must implement routines 
to differentiate between requests for the authorization of payments for authorised and for 
unauthorised  gambling  services,  on  the  basis  of  the  combination  of  the  MCC  and  the 
respective country code, before the approval or denial of a transaction. 

•  Payment blocking for bank transfers is based on the account number used by the gambling 
operator.  It  covers  transactions  both  originating  from  (payments  crediting  players’ 
accounts)  and  going  to  (repatriation  of  profits  by  players)  unauthorised  gambling 
operators. The implementation requires the gambling authority to identify bank accounts 
used by unauthorised operators and submit respective bank account numbers to the banks. 
Banks  then  have  to  block  these  accounts;  they  cannot  be  used  for  payment  transfers 
related to gambling activities to and from the Member State. 

171 COM (2011) 942 final 
172 See for more details: http://ec.europa.eu/internal_market/e-commerce/notice-and-action/index_en.htm  

62 

 
 
                                                 
•  For  e-wallets,  the  implementation  of  the  prohibition  of  processing  payments  to 
unauthorised gambling operators seems to depend on the active involvement and internal 
controls of the e-money issuer. The issuer uses a single worldwide system for senders and 
receivers  of  payments.  Both,  sender  and  receiver  are  customers  of  the  issuer  and 
information is available about each party involved. All gambling operators are identified 
as  such  in  the  system,  and  a  payment  is  considered  to  be  for  gambling  if  it  goes  to  a 
gambling  operator.  Based  on  the  verified  and  recorded  information  to  indicate  a 
customer's  nationality  the  issuer  can  block  payments  for  gambling  services  according  to 
the customer's nationality. The issuer can also check the payer's IP address at the time of 
payment as an additional precaution. 

For  other  payment  means,  such  as  pre-paid  cards,  little  information  has  been  provided  in 
response  to  the  public  consultation  on  how  the  prohibition  of  processing  payments  is 
undertaken. 

Some  gambling  regulators  consider  financial  blocking  a  more  efficient  instrument  than  ISP 
blocking.  The  European  Parliament  calls  on  the  Commission  to  examine  the  possibility  of 
proposing a legally binding instruments obliging banks, credit card issuers and other payment 
system  participants  in  the  EU  to  block,  on  the  basis  of  national  black  lists,  transactions 
between their clients and gambling providers that are not licensed in their jurisdiction, without 
hindering  legitimate  transactions.  However,  being  a  relatively  new  enforcement  tool  the 
debate  about  the  use  and  efficiency  of  payment  blocking  system  suffers  from  a  lack  of 
experience and data. 

Within  Europe  Norway  is  the  only  country  having  significant  experience  with  the 
implementation and enforcement of payment blocking rules. In a recent evaluation of the law 
the Norwegian authorities concluded that access to gambling without a Norwegian license has 
become somewhat complicated, but the effect of the ban on payment transfers has been less 
effective than intended when the provisions were introduced173. 

The advantages most frequently attributed to payment blocking rules are the observation that 
the  transfer  of  payments  to  unauthorised  gambling  operators  becomes  more  difficult  for 
players  and  the  prohibition  is  considered  to  have  an  effect  on  spontaneous,  first  time 
gamblers.  The  prohibition  provides  the  information  to  the  player  that  an  available  online 
gambling site is not necessarily licensed or supervised by the national authority. 

However, a number of shortcomings of payment blocking systems are raised in the debate. A 
payment  blocking  mechanism  may  result  in  blocking  licit  commercial  transactions,  in 
particular  if  based  on  the  operators  MCC.  At  the  same  time  the  effectiveness  seems  to  be 
limited as in those countries applying payment blocking the majority of players continues to 
use the services of unauthorised gambling operators, using their credit or debit cards. Payment 
blocking systems can also be circumvented, for example by using third-party solutions or by 

173  "A  ban  for  Norwegian  companies  to  provide  payment  services  to  gambling  services  on  the  Internet  will 
significant help to reduce the availability of such gaming" (Proposition. No. 80 2007-2008, p. 19). 

63 

 
 
                                                 
changing payment details frequently. If a payment blocking system covers only certain means 
of payments it might urge players to resort to less controlled and regulated means of payment, 
not  covered  by  existing  enforcement  measures.  The  implementation  of  payment  blocking 
systems  entails  substantial  costs  for  the  payment  service  provider  and  other  financial 
institutions. 

EU framework 

The  main  objective  of  the  EU  policy  on  payment  services  is  the  establishment  of  a  Single 
European Payment Area, in which citizens and businesses can make cross-border payments as 
easily,  safely  and  efficiently  as  they  can  within  their  own  countries  and  subject  to  identical 
charges.  The  Directive  on  Payment  Services  (PSD)174  provides  the  legal  foundation  for  the 
creation of an EU-wide single market for payments. In Article 55 II to IV the PSD provides 
rules  on  the  blocking  of  payment  instruments  referring  inter  alia  to  the  suspicion  of 
unauthorised or fraudulent use of the payment instrument. However, it is unclear how existing 
rules  on  the  blocking  of  payments  for  unauthorised  gambling  services  would  fit  within  the 
PSD provisions.  

EU initiative 

Considering the general lack of data and experience with payment blocking methods it is not 
the time to consider an EU policy initiative. The Commission will assess the possibilities and 
limits  of  payment  blocking  in  more  detail  before  taking  a  final  decision.  It  will  discuss  the 
issue  with  Member  States  and  stakeholders  concerned.  The  upcoming  review  of  the  PSD 
might also offer an opportunity to look into the issue.  

Other enforcement means 

White- and Blacklisting 

In most Member States gambling regulators provide a list of licenced operators (white list). 
These lists can provide useful information on the one hand to players, informing them that a 
gambling operator is authorised to offer services in the Member State and supervised by the 
competent authorities, and on the other hand to regulatory authorities in other Member States, 
verifying that an operator is regulated in another EU jurisdiction.  

In a few instances Member States provide lists of operators not authorised to offer gambling 
services  in  the  Member  State.  The  European  Parliament  stresses  in  this  respect  that  more 
action should be taken by Member States to prevent illegal gambling providers from offering 
their services online, for example by blacklisting illegal gambling providers. While black lists 
in principle can also inform consumers and regulators about the absence of an authorisation 
and thus the absence of supervision in a Member State it is almost impossible to keep these 
lists up-to-date, considering the huge number of gambling operators active on the internet.  

174  Directive  2007/64/EC  of  the  European  Parliament  and  of  the  Council  of  13  November  2007  on  payment 
services  in  the  internal  market  amending  Directives  97/7/EC,  2002/65/EC,  2005/60/EC  and  2006/48/EC  and 
repealing Directive 97/5/EC. 

64 

 
 
                                                 
In both cases players need to be aware of the existence and accessibility of the list.  

Domestic Domain Name 

A  number  of  Member  States  require  that  licence  holders  offer  their  gambling  services  on  a 
website with the country code top-level domain of the respective Member State, for example 
website.fr  for  France  or  website.es  for  Spain.  Players  should  thus  be  enabled  to  identify 
quickly if the gambling service offered on a website is authorised in a Member State.  

Advertising bans 

National  gambling  laws  commonly  prohibit  the  advertising  of  online  gambling  services  not 
authorised in the respective Member State. Member States consider such a prohibition as an 
indispensable  part  of  their  enforcement  policy.  Advertising  bans  for  unauthorised  gambling 
services  are  generally  compatible  with  EU  law.  In  Sjöberg  &  Gerdin  the  Court  found  that 
Article  56  TFEU  does  not  preclude  legislation  of  a  Member  State  which  prohibits  the 
advertising to residents of that State of gambling not authorised in the Member State, under 
the  condition  that  the  general  regulatory  framework  for  gambling  services  in  the  Member 
State is in compliance with EU law. In HIT and HIT Larix it held that Article 56 TFEU does 
not  preclude  legislation  of  a  Member  State  which  permits  the  advertising  in  that  State  of 
casino's located in another Member State only where the legal provisions for the protection of 
gamblers adopted in that other Member state provide guarantees that are in essence equivalent 
to  those  of  the  corresponding  legal  provisions  in  force  in  the  first  Member  State.  Member 
States however find it difficult to enforce the restrictions on advertising, in particular against 
advertising on the internet. Regulators experience the same technical and legal challenges as 
with blocking access to the unauthorised gambling service itself. Links and banners directing 
players  to  unauthorised  gambling  websites  are  easily  changed  and  difficult  to  control  and 
hosting  websites  often  receive  a  percentage  of  the  profit  for  each  player  directed  to  the 
website.  

Administrative and criminal sanctions 

In  the  workshop  on  efficient  national  enforcement  measures  and  administrative  cooperation 
some  regulators  suggested  that  regulatory  authorities  need  to  have  full  enforcement  rights 
against  unauthorised  offers,  including  appropriate  administrative  and  criminal  sanctions. 
Without  such  powers  close  and  robust  working  arrangements  with  law  enforcement 
authorities  are  required.  A  number  of  participants  advocated  that  a  sanction  regime  should 
also cover related services, such as ISP, financial services and media services. 

EU initiative 

The efficiency of enforcement tools is crucial for the successful implementation of a national 
gambling  policy.  Commission  services,  together  with  Member  States  and  stakeholders 
concerned, will discuss the issue of efficient enforcement measures and seek to develop best 
practices.  

65 

 
 
66 

 
 
 
7.  PROTECTION  OF  CONSUMERS  AND  CITIZENS,  INCLUDING  MINORS  AND 

OTHER VULNERABLE GROUPS 

The Green Paper consultation embraced the relevant public interest objectives like consumer 
protection that gambling touches upon. The objective of protecting consumers and preventing 
gambling  disorders  are  societal  issues  recognised  by  the  Court,  providing  a  margin  of 
appreciation for Member States in devising national policy in this area, in compliance with the 
Treaty  and  respective  case-law175.  Further,  in  2008  the  Council  highlighted  the  'significant 
similarities in the Member States objectives as regards gambling and betting', and the variety 
of  arrangements  devised  to  attain  the  converging  aims176.  Taking  account  of  the 
contributions177  to  the  Green  Paper  from  Member  States,  stakeholders  and  the  European 
Parliament, the calls for measures to protect all citizens and consumers are intended to 

•  Protect minors and young adults from gaining access to gambling facilities 
•  Protect other vulnerable groups 
•  Channel players (recreational and professional) into an authorised competitive offer 
•  Prevent the development of gambling-related disorders 

as well as ensuring a transparent, fair and safe gaming environment. 

7.1. The current framework 

In the EU a number of similar if not outright common measures for safeguarding consumers 
exist in the regulatory frameworks of Member States. This is clearly manifested through the 
contributions  provided  in  the  Summary  of  Responses.    However,  whilst  these  are  generally 
provided  for  in  legislation,  the  range  and  detail  of  the  prescribed  provisions  required  by 
licensed operators differ. The requirements to be met by licensed operators may also be laid 
out in the licence requirements, against which an operator is to be monitored for compliance. 
Some competent authorities substantiate these provisions with other initiatives, such as Codes 
of  Practice.  Industry  has  also  developed  its  own  initiative  towards  adequate  detective  and 
preventive consumer standards through the CEN workshop agreement178, and against which 
the signatory gambling operators are externally audited.  

Although clearly a number of binding and non-binding measures exist, given the lack of such 
measures at an EU level, not all citizens may be adequately protected, minors may be exposed 
to gambling content and consumers in general may be exposed to unregulated gambling sites. 
Not all regulatory systems may require strict age verification and player identification checks 
and controls to open an account with an authorised operator, on-line self-reality checks in real 
time or protection of player funds/accounts. Different solutions are used in the Member States 
for  personal  identification,  digital  or  manual,  and  not  all  may  be  robust  enough  to  prevent 
minors  accessing  online  gambling  activities.  Support  to  customers  by  operators  and  by 

175 See Chapter 5 of this document 
176  Council  Presidency  Progress  report  'Gambling  and  betting:  legal  framework  and  policies  in  the  Member 
States of the European Union', 27 November 2008, 16022/08 
177 See Chapter 3 of the Summary of Responses 
178 ftp://ftp.cen.eu/CEN/AboutUs/publications/GamblingMeasures.pdf 

67 

 
 
                                                 
regulators may not currently be obligatory in all regulatory systems to which a customer can 
turn to for information and complaints. Further, education and awareness of online gambling 
and  potential  ensuing  risks,  including  for  minors,  as  well  as  information  on  the  national  or 
regional  regulating  authority  are  not  necessarily  readily  available  in  the  Member  States.  In 
addition,  gambling  service  providers  use  a  broad  range  of  commercial  communications  for 
marketing purposes and citizens may not be well-informed on the choices they may pursue. 
However,  gambling–specific  advertising  initiatives  are  not  available  in  all  Member  States, 
even though there are existing examples such as codes of conduct by regulatory authorities or 
other designated competent bodies as well as industry. 

Lastly, the intrinsic nature of gambling can give rise to problem gambling or lead to gambling 
addiction. However, research and studies or surveys on the nature and scale of this aspect is 
significantly  limited.  Yet,  this  is  imperative  for  instance  to  ensure  that  the  preventive  and 
detective measures in place serve the purpose of protecting consumers adequately. The factors 
potentially  leading  to  gambling-related  problems  equally  need  to  be  better  grasped.  These 
issues  are  important  in  order  to  be  able  to  prescribe  the  dedicated  treatment  that  would  be 
required by those exposed to such problems. 

The Commission is seeking to ensure that all citizens across the EU/EEA are afforded a high 
level of common protection throughout the internal market, both as regards an authorised and 
safe offer and against the unregulated offers which are accessible to consumers because online 
gambling  inherently  crosses  national  borders.  As  highlighted  earlier,  consumers  do  not 
necessarily  pay  attention  to  operators'  authorisation  details  when  seeking  to  play  online.  In 
any event, market figures show that there is consumer demand for this type of service in the 
EU179.  As  the  Commission  described  in  launching  the  Green  Paper  consultation  'Citizens 
search across borders for competing online gambling services and currently they may not be 
sufficiently protected against the risks associated with these illegal offers'. It is therefore also 
imperative that regulatory approaches to protect consumers are not overly cumbersome such 
that  players  seek  access  to  unregulated  sites.  Further,  according  to  available  data  online 
gambling  is  a  recreational  activity  for  the  majority  of  consumers  in  Europe.  However, 
although  the  percentage  of  people  with  a  type  of  gambling-related  disorder  has  broadly 
remained  within  0.5-3%  to  date  it  is  nonetheless  a  significant  number  of  individuals  in  the 
EU. It is an area which duly requires dedicated research to understand the risks entailed and to 
identify  adequate  early  detection  and  preventive  measures.  Finally,  there  is  an  important 
segment  of  the  population  that  must  be  protected  appropriately,  that  is  minors  and  other 
vulnerable groups. 

Following  from  this  perspective  the  Commission  is  proposing  a  number  of  actions  with  a 
view  to  providing  adequate  protection  of  consumers  and  citizens,  including  minors  and 
vulnerable groups, as well as drawing from relevant Commission initiatives. 

7.2. A safe and regulated offer to protect consumers 

179 See Chapter 3 

68 

 
 
                                                 
From  the  outset,  the  Green  Paper  stressed  the  importance  of  adequate  protection  of 
consumers.  More  than  enhancing  consumer  confidence,  consumers  need  to  be  able  to  make 
informed  choices  online  and  be  cognisant  therefore  of  the  existing  offers  online  of 
unregulated gambling. Transparency is important, including clear terms and conditions on the 
operator's  site.  It  is  frequently  said  that  consumers  are  faced  with  information  overload  on 
online  services  in  general  but  consumers  do  not  necessarily  have  the  information  they  need 
and do rely on labels.180. First and foremost given the number of unregulated gambling sites 
on the European market181 and the ensuing risk of fraud, the Commission services believe that 
consumers  need  to  be  able  to  distinguish  a  regulated  online  gambling  offer  from  an 
unregulated one. This is primarily possible through an immediately visible and recognisable 
logo of the authorising competent authority in the EU/EEA Member States together with the 
details  of  the  authorised  operator  on  its  website.  In  this  respect  trustmarks,182  raised  earlier, 
are  generally  referred  to  for  online  services  inter  alia  to  protect  consumers  against  illegal 
sellers  and  can  provide  a  means  by  which  consumers  can  be  informed  on  the  protection 
offered by the authorised operator.  

In the EU consumers should feel assured that an authorised online site they choose to play on 
has adequate safeguard measures in place, such as  
•  prevention and detection measures e.g.,  

time and financial limit-setting possibilities for the player, 

o 
o  signposting to helplines (in respective languages),  
o  exclusion possibilities,  
o  reality  checks  (e.g.  account  and  session  activity  on  player  screen  at  regular 

intervals), 

•  no playing on credit or wagering a bet if the registered player account does not have 

the necessary funds,  
the protection of their funds,  

• 
•  customer  support  inter  alia  for  treating  information  requests  and  for  handling 

complaints.  

It follows that players must be able to review deposit limits, that their requests are promptly 
dealt  with  and  that  any  requests  for  upward  increases  are  enabled  only  after  a  fixed  period. 
Information on the types of games offered on respective authorised sites and warning signs of 
addiction  possibilities  should  also  be  available.  Identity  checks  and  age  verification  for 
registering and opening an online gambling account are to be carried out in the first instance 
to  abide  with  age  limit  requirements  and  to  protect  minors  from  accessing  online  gambling 
sites.  Currently,  it  may  not  always  be  the  case  that  an  account  is  activated,  enabling  player 
activity,  only  once  all  checks  are  carried  out.  Furthermore,  player  activity  should  be 
monitored  by  the  operator  including  for  tracking  gambling  behaviour.  The  training  of 

180 Commission Communication to the European Parliament, the Council, the Economic and Social Committee 
and  the  Committee  of  the  Regions  'A  European  Consumer  Agenda  –  Boosting  confidence  and  growth  COM 
(2012) 22 final 
181 Green Paper: out of 14,823 active gambling sites in Europe more than 85% operate without any licence 
182 See Chapter 6.3.1 'Inform players about the available legal offer' 

69 

 
 
                                                 
employees  responsible  for  such  monitoring  is  necessary  in  order  to  be  able  to  identify 
alterations  in  player  activity.  This  is  also  so  as  to  ascertain  adequate  awareness,  enable 
appropriate  intervention  (e.g.  cooling  off  period)  or  if  required  provide  guidance  to  support 
centres,  treatment  centres  or  to  debt  counselling  for  instance.  The  Commission  services 
encourage both Member States' regulating authorities and industry to provide for these. 

To  adequately  protect  consumers  all  regulatory  frameworks  need  to  embrace  these  types  of 
safeguards, with authorised operators incorporating these in the responsible business conduct 
that they pursue and as part of their authorisation requirements. A regulating authority should 
responsibly  carry  out  checks  and  controls  on  operators  as  an  intrinsic  part  of  post-licensing 
monitoring to ensure the protection of consumers. In a similar vein, the Commission services 
believe  that  support  to  customers  should  extend  to  regulators,  so  as  to  enable  consumers  to 
take complaints to the responsible regulator. In this respect complaints relating to contractual 
disputes for instance could be handled through the use of alternative dispute resolution (ADR) 
and online dispute resolution (ODR) entities183. Today, data on complaints taken to regulating 
authorities  does  not  seem  to  be  readily  available,  however  consumers  should  be  afforded 
support.  

The  benefit  of  these  types  of  measures  is  that  they  can  be  viewed  as  benchmarks  against 
which  regulators  assess  authorised  operators  for  compliance.  Currently,  some  authorising 
systems can monitor operators in real times whilst others entail reporting obligations184. 

The Commission services consider that at the minimum a common set of principles is to be 
established with a view to providing a high level of consumer protection across the EU/EEA. 
This  is  also  essential  for  enhancing  trust  and  for  facilitating  the  exchange  of  information 
between regulators. Developing common measures at EU level contributes to mutual trust and 
to  confidence-building.  As  regards  exchange  of  information,  as  described  earlier  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 data185. 

The  adverse  effect  of  the  absence  or  lack  of  common  measures  is  less  protection  being 
afforded  to  consumers.  This  is  because  authorised  operators  in  the  EU  may  choose  to 
concentrate  their  activities  in  the  larger  markets,  due  to  costs  of  compliance  to  meet  the 
requirements  of  the  regulatory  regimes  across  the  Member  States.  Secondly,  overly  rigid 
measures  sought  by  a  regulatory  system  can  lead  consumers  to  seek  more  accessible  offers 
across borders. The net effect is that consumers may end up on unregulated sites, and out of 
the protection of a regulated framework. 

7.2.1.  A Recommendation on common protection of consumers 

183  E.g.  The  Commission has adopted    a proposal  for  a Directive  on consumer  Alternative Dispute  Resolution 
and  a  proposal 
final, 
for  a  Regulation  on  Online  Dispute  Resolution  COM 
http://ec.europa.eu/consumers/redress_cons/adr_policy_work_en.htm 
184 See Chapter 6.3 on 'Appropriate reporting obligations and supervision of licensees' 
185 Directive 95/46/EC  

(2012)  19 

70 

 
 
                                                 
To  this  effect  the  Commission  intends  to  ensure  comparable  and  improved  information  and 
safeguards  to  consumers,  including  a  high  level  of  protection  as  regards  minors  and  other 
vulnerable  groups,  and  will  as  a  matter  of  course  adopt  a  Recommendation  on  Common 
Protection of Consumers. The Commission will draw on the existing practices introduced in 
the  EU  in  identifying  solutions  aimed  at  safeguarding  consumers  and  protecting  minors. 
These will be drawn up with Member States' authorities in the expert group on gambling that 
is being established by the Commission.  

In  a  first  phase  the  Recommendation  will  provide  Member  States  with  an  instrument  at  the 
national  level  for  the  adequate  protection  of  consumers  and  it  should  also  help  optimise 
synergies between competent authorities. The Recommendation can be only be effective if it 
is  applied  by  Member  States.  It  is  therefore  significantly  reliant  on  the  take-up  by  Member 
States at the national and regional level within their system of authorisation and supervision. 
Having said this, action requires efforts of all stakeholders. In light of the Communication the 
Commission  services  will  assess  the  application  of  the  Recommendation  after  its  adoption. 
The  information  provided  by  Member  States  on  the  actions  undertaken  to  implement  the 
Recommendation  will  help  the  Commission  services  to  assess  the  effectiveness  of  the 
implementation  of  the  Recommendation.  The  findings  will  help  determine  the  course  of 
action  that  will  be  subsequently  called  for.  A  Recommendation  can  take  the  form  of 
standardisation  of  protective  approaches.    The  Commission  could  mandate  CEN  to  develop 
standards for the protection of consumers in the area of online gambling, which can also take 
the  form  of  a  European  standard.  CEN  provides  a  platform  for  developing  European 
standards, recognised under the Transparency Directive186.  Service standards can be used to 
promote  best  practices  or  to  set  benchmarks  to  measure  the  quality  and  performance  of  the 
service.  Their  value  is  that  these  are  drawn  up  by  bringing  together  expertise  of  interested 
parties  (manufacturers,  consumers,  regulators)  of  a  particular  service.  European  standards 
offer  a  common  standard  in  the  Member  States,  in  the  area  of  online  gambling  helping  to 
enhance the understanding of consumer protection requirements and transparency.  

A Behavioural Study on Online Gambling could test the consumer policy options187. The 
Commission  services  could  undertake  this  exercise  through  a  framework  contract  for 
behavioural studies. It analyses policy options from a consumers' perspective and is intended 
to support an initiative such as the above-mentioned Recommendation. Carried out for areas 
like  retail  investment  services,  tobacco  and  bank  accounts,  these  studies  have  provided  a 
useful  foundation,  as  well  as  supplementary  information  for  the  initiatives  subsequently 
undertaken.  As  an  example,  the  study  could  provide  whether  warning  signs  and  helplines 
provided on websites are effective or to what extent types of images used are effective. The 
benefit of this study is that it can be carried out within a 6-month period from the date it is 
contracted, within the terms of reference provided. 

7.2.2.  The Commission Proposal on Electronic Identification  

186 Directive 98/48/EC 
187 http://ec.europa.eu/eahc/consumers/tenders_2011_cons_01.html  

71 

 
 
                                                 
The Commission services believe that registration by customers to open a player account with 
an  online  gambling  operator  should  be  a  pre-requisite  of  the  protective  measures  in  place 
online.  According  to  the  contributions  to  the  Green  Paper  consultation  identification  checks 
are  carried  out  by  authorised  operators,  in  line  with  the  requirements  of  respective 
jurisdictions.  Currently,  there  are  different  solutions  in  the  Member  States  for  personal 
identification, which can be digital or manual (e.g. credit card details, tax registration number, 
recognised  third  party  databases,  hard-copy  documentation)  which  lend  to  interoperability 
problems, and which gives rise to challenges in view of the number of EU citizens, including 
consumers, crossing borders for short or longer term periods. A legal frameworkfor the legal 
acceptance  and  recognition  of  electronic  identification  means  improves  confidence  in 
electronic  transactions  for  consumers,  enhances  the  technical  interoperability  of  identity 
authentication  schemes  and  facilitates  the  administrative  work  of  the  gambling  regulating 
authorities.  The  importance  of  consumers'  perception  of  less  cumbersome  but  secure 
registration processes is also in light of the prevalence of unregulated online gambling offers 
on the European markets. The need for an EU-wide legislation on electronic identification and 
authentication  was  identified  in  the  Digital  Agenda188  and  the  Single  Market  Act189  and 
confirmed by the results of the public consultation launched by the Commission190.  

The Commission has adopted a proposal for a Regulation on electronic identification and 
trust services for electronic transactions in the internal market191 providing common rules 
on  mutual  recognition  and  acceptance  of  electronic  identification  means,  which  are  already 
used  in  many  Member  States  to  access  mostly  public  online  services  but  not  yet  generally 
utilised to access online gambling services. The proposal should support further Commission 
initiatives  to  foster  administrative  cooperation  between  gambling  regulators  as  well  as 
consumer  protection  in  the  context  of  the  above-mentioned  Recommendation.  Furthermore, 
the  mutual  recognition  and  acceptance  of  eIDs  enables  age  verification  without  the  need  to 
disclose  personal  data.  However,  the  proposed  Regulation  does  not  in  itself  oblige  Member 
States to introduce electronic identification schemes.  

In Denmark, for example electronic identification with a code card is obligatory, together with 
a  secure  digital  signature  which  the  players  provide.  when  they  register  with  a  gambling 
provider.192 

'Scoping  the  Single  Digital  Identity  Community  (SSEDIC)  is  a  thematic  network  for 
European  eID193.  Its  objective  is  to  provide  a  platform  for  all  stakeholders  of  electronic 
identity  to  collaborate  together  to  develop  an  agenda  for  a  SSEDIC.  A  number  of  sectoral 
stakeholder  groups  were  set  up,  including  a  business-focused  group,  to  assess  the  political, 

188 Digital Agenda for Europe COM(2010)245 
189  Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  Economic  and  Social 
Committee and the Committee of the Regions, Single market Act, Twelve Levers to boost growth and strengthen 
confidence, "Working together to create new growth" COM(2011) 206 final 
190 Public consultation: http://ec.europa.eu/information_society/newsroom/cf/itemdetail.cfm?item_id=6732 
191 COM(2012) 238/2 
192 http://cms.skat.dk/SKAT.aspx?old=2035321&lang=US 
193 http://www.eid-ssedic.eu/ 

72 

 
 
                                                 
economic,  social,  technical,  legal  and  environmental  aspects  of  a  single  European  digital 
community.  In  this  respect,  the  ongoing  work  by  SSEDIC  may  be  of  interest  to  online 
gambling operators.  

7.2.3.  Consumer Survey of Gambling Services 

Information  on  national  consumer  conditions,  consumer  markets  and  consumer  behaviour 
assists the devise of policies that fit the purpose. The Commission attaches utmost importance 
to  providing  adequate  policy  responses  at  EU  level.  Since  2008  the  Commission  has  been 
gathering  evidence  by  monitoring  markets  and  national  consumer  conditions  and  studying 
consumer  behaviour.  The  Commission's  annual  Consumer  Scoreboard194  includes  the 
market  for  gambling  and  lottery  services  (online  and  offline  combined)  amongst  the  50 
consumer markets that it monitors garnering feedback from consumers in the Internal Market. 
However,  the  Commission  services  feels  that  better  information  regarding  the  market 
performance  of  the  online  segment  and  the  behaviour  of  consumers  regarding  online 
gambling is needed. This should assist the Commission in its approach towards ensuring the 
protection  of  all  consumers  in  the  EU.  Therefore,  the  Commission  services  seek  to  better 
identify any malfunctioning of online gambling from the consumers' perspective.  

The aim of the Scoreboard is to show those markets which are at risk of malfunctioning and 
which are not meeting consumer expectations. The market performance is monitored from the 
perspective  of  economic  and  social  results  for  European  consumers  and  ranks  and  monitors 
markets from their perspective. The indicators used to rank the markets include comparability 
of  offers,  trust  in  retailers  or  providers,  problems,  complaints  and  overall  consumer 
satisfaction.  As  a  second  step  in-depth  market  studies  for  the  sectors  that  appear  to 
underperforming are carried out to analyse the problems and propose possible solutions. 

The Scoreboard edition of October 2011 rates the market for gambling and lottery services as 
tenth  out  of  the  30  services  markets  surveyed,  performing  above  the  average  of  all  services 
markets  on  almost  all  indicators.  Consumers'  ranking  of  'comparability',  a  key  component 
capturing consumers' ability to compare offers and therefore to make informed choices was at 
7.3  out  of  a  0-10  scale  mirroring  2010,  whilst  'trust'  is  ranked  6.8.  This  is  0.4  and  0.2 
respectively  above  the  average  for  all  service  markets,  mirroring  the  ranking  achieved  in 
2010. Further, only 3% of consumers mentioned that they have experienced problems in the 
market  in  comparison  to  the  average  of  12.5%  of  all  services  markets.  Moreover,  the 
proportion of experienced problems in this market dropped in comparison to 2010 (4.2% in 
2010). In terms of complaints, 78% consumers complained about problems with 55% being 
complaints to the retailer or provider. As for the overall consumer satisfaction the market is 
ranked  7  on  a  scale  of  0-10  which  is  below  the  average  score  of  7.3  points  of  all  service 
markets.  Finally,  with  an  average  on  the  competition  component  of  8.0,  the  market  for 
gambling and lottery services is among the top markets of all services markets.  

194 http://ec.europa.eu/consumers/strategy/cons_satisfaction_en.htm 

73 

 
 
                                                 
Market performance  

 Breakdown by indicator 

0-4 

5-7 

8-10  Average
2011 

average
 2010 

COMPARABILITY 
Gambling And Lottery Services   10.4%  33.6%  56.0% 
14.0%  37.0%  49.0% 
All services markets average 
TRUST 
Gambling And Lottery Services   16.2%  36.9%  47.0% 
All services markets average 
15.9%  41.6%  42.5% 
SATISFACTION 
Gambling And Lottery Services   12.5%  36.8%  50.7% 
All services markets average 
54% 
CHOICE 
Gambling And Lottery Services   7.4% 
All services markets average 
12% 
Source: 2011 Market Monitoring Survey 

24.5%  68.2% 
29.4%  58.7% 

37% 

9% 

7.35 
7.00 

6.69 
6.75 

6.85 
7.43 

7.32 
6.91 

6.76 
6.62 

6.98 
7.28 

7.98 
7.39 

The  Commission  will  seek  to  obtain  more  thorough  feedback  on  market  performance  of 
gambling. Therefore from 2013 the Commission will obtain targeted feedback for the online 
gambling market separate to the offline market, in light of adequate consumer protection and 
player support that should be sought. 

74 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7.3. The protection of minors  

An underlying objective of the Commission in launching the Green Paper consultation was to 
gather  information  on  the  measures  in  place  at  national  level  to  protect  minors  from  online 
gambling.  The  internet  is  used  as  a  source  of  information,  education  and  entertainment  by 
children  and  therefore  they  may  be  exposed  online  gambling  content.  One  way  in  which 
regulatory  frameworks  seek  to  protect  minors  is  by  setting  age  limits  against  which  an 
authorised operator is to comply. In this respect, operators are also generally required to carry 
out  age  verification  checks  alongside  identification  controls.  However,  diverse  methods  are 
used to carry out these checks and the extent of their effectiveness in detecting an under-aged 
seeking  to  open  an  account  may  differ.  Furthermore  initiatives  regarding  education  and 
awareness  of  minors  and  parents  on  internet  content  and  the  safe  use  of  the  internet  are 
important.  Different  regulatory  or  self-regulatory  policies  are  implemented  in  the  Member 
States. Some Member States require ISPs to provide parental control software as a means to 
raise awareness and provide support to parents in protecting minors.  

As  indicated  earlier  Member  States  share  common  objectives  in  their  respective  regulatory 
frameworks. As recognised by the Council in 2008 'the protection of minors and vulnerable 
persons is a concern shared by all Member States'195. In fact the Council held, amongst other, 
that the possibility of a common approach on access of such persons to gambling and betting 
could be explored. Further, the EP has called on the Commission to explore 'all possible tools 
or measures at the EU level designed to protect vulnerable consumers'196. Vulnerable groups 
were highlighted in the Green Paper to gather specific feedback. 

The  Green  Paper  contributions  show  that  most  Member  States  set  age  limits  for  gambling 
services and 18 is by and large the minimum age limit set for online gambling services. In fact 
one reason regulatory systems require age verification to register with an authorised operator 
is to protect minors (children and  young  persons) from gambling content.  At  the same time 
different identification requirements and methods exist to be able to open a player's account as 
the  contributions  to  the  Green  Paper  indicate,  and  they  may  not  all  be  robust  to  a  similar 
degree. In addition age verification tools to protect minors from accessing online content such 
as  gambling  in  the  Member  States  are  mainly  implemented  as  a  voluntary  measure  and  are 
widely  used  for  online  services  such  as  gambling197.  Age  verification  for  the  purpose  of 
protecting  minors  must  also  be  viewed  from  a  risk  management  perspective.  A  prevailing 
issue is that there will be instances where a minor manages to circumvent systems and open 
an online account. Detection by the operator may then be more difficult. Although there is no 
available data, one way in which minors can manage to do this is through the use of parent's 

195 Presidency Progress Report 2008 
196 2011/2084(INI) 
197 Background Report on Cross Media Rating and Classification, and Age Verification Solutions, Safer Internet 
Forum, 25-26 September 2008 

75 

 
 
 
                                                 
credit  cards,  so  called  'identity  theft'.  This  is  by  no  means  the  only  possibility,  as  there  are 
other payment systems used (see Section 8.2). 

It  seems  that  traditional  authentication  controls  serve  to  prove  the  user's  identity  without 
necessarily  providing  accurate  information  about  the  age  of  the  registering  player.  In  this 
respect, the non-activation of accounts until all checks are carried out and carrying out checks 
also at the time of withdrawal of winnings to verify the age can mitigate this risk. A number 
of  preventive  possibilities  exist,  such  as  requiring  systems  to  feature  messages  regarding 
under age play and clearly displaying information on the measures taken to verify age. 

Nonetheless, the Commission services feel that age verification solutions should complement 
other methods to protect minors in the online environment. The Internet is increasingly used 
as  a  source  of  information,  education  and  entertainment  by  children  not  just  adults. 
Conversely,  it  exposes  children  as  they  may  be  less  able  to  immediately  identify  potential 
risks during the time they spend online. Minors may be prone to misuse of the internet and 
must  be  protected.  For  instance  parental  awareness  of  associated  risks  can  be  increased  as 
well as encouraging software filtering in the home. As the findings in the recent Commission 
Communication 'European Strategy for a Better Internet for Children'198 show, different 
regulatory  or  self-regulatory  policies  are  implemented  in  the  Member  States,  such  as  for 
parental controls or for content rating. A Member State can require ISPs to provide parental 
control software free of charge or they can require that customers are asked if they want such 
software at the time of purchase. Industry has also drawn up Codes of Conduct.  

7.3.1.  Initiatives to protect minors 

The envisaged Recommendation on Common Protection of Consumers is also intended to 
protect  minors  from  accessing  gambling  websites  and  one  of  its  core  principles  will  be  a 
requirement  of  age  verification  controls,  which  are  necessary  in  order  to  substantiate  the 
identity details which should be provided to register and open an account. 

Through the Safer Internet Programme (2009-2013)199 which runs till 2014 as well as the 
Connecting  Europe  Facility200  the  Commission  will  vigorously  seek  to  increase  the 
awareness of parents and of children on the safe use of the internet to protect children. The 
Commission will support benchmarking and testing of parental controls and relevant support 
services to empower parents and children, as well as research and development (R&D) to look 
into how age-rating and content classification systems could be made interpretable by parental 
controls that can deal with a wide range of languages. . 

198 Commission Communication to the European Parliament, the Council, the Economic and Social Committee 
and the Committee of the Regions COM(2012)196 final 
199  Decision  No  1351/2008/EC  of  the  European  Parliament  and  Council  of  16  December  2008  establishing  a 
multiannual  Community  programme  on  protecting  children  using  the  Internet  and  other  communication 
technologies 
200 Proposal for a Regulation of the European Parliament and of the Council establishing the Connecting Europe 
Facility COM(2011) 665 

76 

 
 
                                                 
Safety  education  and  awareness  raising  are  key.  The  Digital  Agenda  promotes  awareness-
raising campaigns for the wider public. The Commission encourages Member States to pursue 
these objectives through e-safety curricula in schools and by analysing the impact on children 
of  using  digital  technologies  through  independent  research201.  The  Commission  also 
encourages public authorities to take a more prominent role, by equipping children and young 
people  with  knowledge  and  skills  to  navigate  the  internet  safely.  In  this  respect,  operators 
should  provide  a  link  to  a  recognised  filtering  programme  to  assist  parents  in  preventing 
minors from  going on  gambling sites.  Further, the Commission services believe that a clear 
message that minors are not permitted to participate in online gambling activities should also 
feature prominently on the website of the operator. 

Whilst  the  role  of  parents  in  the  home  is  imperative,  the  Commission  has  also  called  on 
industry to take positive action and in response a Coalition202 has been set up committing to 
make the  internet  a better place for children  and to achieve this goal in the EU. One of the 
concerted  efforts  of  the  Coalition  is  the  establishment  of  age-appropriate  privacy  settings 
across services, as well as build on content classification systems. This  requires outreach to 
interested stakeholders. The uptake of parental control tools by industry is also stressed in the 
Communication 'European Strategy for a Better Internet for Children'. Industry need to ensure 
that user-friendly parental controls are available and accessible as regards all internet-enabled 
devices in Europe. Parental control tools must enable the blocking, filtering and monitoring of 
websites  to  prevent  minors  from  accessing  online  gambling  websites.  The  Commission 
encourages Member States to carry out awareness-raising campaigns and education on risks 
associated with gambling and with playing excessively seeking abroad outreach and targeting 
all vulnerable groups. A main role of a regulating authority should be to assure the protection 
of minors and vulnerable groups, including through responsible advertising requirements. 

Mystery  shopping  exercises  are  carried  out  to  check  the  possibilities  of  minors  accessing 
online sites. The contributions to the Green Paper did not give in-depth detail. However these 
exercises serve to test compliance with age limit requirements and with verification systems. 
Regulating  authorities  can  commission  mystery  shopping  designed  to  protect  minors  and 
vulnerable groups. This initiative can be carried out as part of a rolling programme of mystery 
shopping  exercises  looking  at  compliance  of  authorised  operators  with  social  responsibility 
and  license  requirements.  They  can  also  serve  to  re-test  operators  found  non-compliant 
through the exercise.  

7.4. Responsible Advertising 

A wide array of commercial communications is used by online gambling service providers for 
marketing purposes. Whilst gambling services are not subject to sector-specific regulation at 
EU level the advertising and marketing of the offer and promotion of gambling services are 
covered  by  the  Unfair  Commercial  Practices  Directive.  The  Commission  believes  that  in  a 

201 COM(2010)245 
202 The Coalition builds on, inter alia, the Safer Social Networking Principles, Framework for the Safer Use of 
Mobile Phones and the Principles for a Safer Use of Connected Devices 

77 

 
 
                                                 
competitive online cross-border environment consumers need to be sufficiently informed on 
the choices they make and they should feel that enforcement of existing provisions for online 
services  is  adequate.  Another  important  consideration  however  given  the  broad  outreach  of 
advertising  in  printed  or  online  form  is  that  limitations  of  advertising  are  to  be  regulated  to 
protect minors and other vulnerable groups.  

The Green Paper specifically raised the issue of regulation of commercial communications at 
national  level  to  protect  all  vulnerable  groups.  Vulnerability  may  arise  due  to  a  financial 
situation,  previous  behavioural  including  gambling  disorders  or  daily  interaction  by  persons 
working in or with the gambling industry, as well as the frequent exposure of persons such as 
athletes  and  other  sport  persons.  Responses  show  that  there  are  a  few  codes  of  conduct  or 
codes of practice for socially responsible advertising and promotions drawn up by competent 
authorities or by industry, and there are variations in these. However, not all Member States 
have  advertising  regulations  specific  to  gambling  services  or  dedicated  to  online  gambling 
services.  National  legislation  can  provide  for  the  limits  of  advertising  which  can  then  be 
detailed further by the competent authorities and to which operators are to comply as part of 
their license requirements.  

International organisations such as the European Advertising Standards Alliance (EASA) or 
the  International  Chamber  of  Commerce  (ICC)  have  drawn  up  best  practice  models  and 
standards  respectively  for  self-regulatory  advertising  with  a  view  to  protecting  consumers. 
These  concern  advertising  in  general  but  principles  that  advertising  should  be  honest  are 
applicable to gambling-related advertising. Another pan-European self-regulatory initiative is 
the  CEN  workshop  agreement  which  incorporates  guidelines  for  responsible  marketing, 
including for the protection of minors. IAGR eGambling Guidelines on the other hand are an 
international  initiative.  Similar  initiatives  also  exist  in  some  jurisdictions  with  a  view  to 
contributing to integrating of online gambling. 

Challenges 

All  citizens  need  to  be  well-aware  that  gambling  can  be  harmful  if  not  played  responsibly, 
from  a  financial,  social  and  health  perspective.  Transparency  is  key.  The  inherent  risks 
associated with gambling, such as problem-gambling or addiction, call for clearer guidelines 
across Member States as regards responsible gambling advertising. Furthermore, this is also 
called for in light of unregulated offers of online gambling so as to ensure that consumers are 
channelled  to  authorised  and  regulated  sites.  There  is  the  risk  that  overly  restrictive 
advertising requirements will inadvertently be to the detriment of consumer protection leading 
them to the black market. Nonetheless, the provision of certain key information on any form 
of advertising should be compulsory, such as the details of the regulating authority and that 
underage gambling is not allowed. Factually correct information should equally be given as to 
the  winning  and  losing  possibilities  for  example,  the  risks  of  chasing  losses  and  warning 
messages against excessive gambling.  

As regards minors advertising concerns frequently focus on the potential effects on children 
and  young  people.  Advertising  Codes  generally  outright  prohibit  the  specific  or  intentional 

78 

 
 
targeting  of  minors,  including  in  the  media,  or  require  a  clear  'No  underage  gambling' 
message.  However,  online  commercial  communications  such  as  pop-up  promotional  images 
on  non-gambling  sites  also  need  to  be  addressed.  There  is  the  risk  that  minors  are  not 
protected or shielded from exposure to the same degree in all Member States. 

A main aim of regulating authorities should be to provide the parameters for advertising and 
promotion  messages  or  images  that  authorised  operators  are  to  comply  with.  The  core 
principle  should  be  that  gambling  advertisements  are  to  be  socially  responsible.  These  can 
comprise  provisions  to  the  effect  that  advertising  shall  not  imply  that  gambling  allows  for 
social acceptance, that it shall not play on the susceptibilities of the vulnerable, in particular 
minors or young adults and that it shall not be portrayed as means to solve financial or other 
problems. Under-age and vulnerable groups must be specifically protected and in no manner 
enticed to gamble, whilst images used should not portray persons which look below the age 
limit or within the minimum age limit threshold. Further, operators should not engage directly 
or  indirectly  in  unsolicited  mail,  including  to  persons  who  have  self-excluded  themselves 
from a site.  

7.4.1.  A Recommendation on Responsible Gambling Advertising 

The  Commission  aims  to  improve  socially  responsible  advertising,  seeking  to  guarantee  an 
equal  level  of  protection  of  European  consumers,  minors  and  other  vulnerable  groups.  The 
Commission  will  adopt,  a  Recommendation  on  Responsible  Gambling  Advertising.  The 
aim is to draw up common rules of conduct at European level according to the specifics of the 
sector..  The  aim  is  to  capitalise  on  synergies  of  existing  regulatory  and  self-regulatory 
approaches  encompassing  both  regulators  and  industry  to  devise  a  set  of  core  principles  for 
responsible  advertising.  The  objective  is  to  provide  Member  States  with  the  parameters  to 
undertake adequate protection measures, including therefore sanctions for non-compliance or 
for knowing or repeated breaches which in themselves are an incentive for operators to abide 
by them. The Commission intends to seek the balanced involvement of all stakeholders. The 
Recommendation  will  be  drawn  up  with  the  expertise  of  industry  and  discussed  with  the 
authorities in the expert group on gambling that is being established.  

The  Recommendation  should  extend  to  intermediaries  providing  the  ancillary  marketing 
service  and  operators  should  be  ensure  that  intermediaries  contracted  to  carry  out  their 
advertisements do so in respect of the code. 

The Recommendation will take the form of a voluntary commitment by Member States and 
industry.  However,  self-regulation  cannot  operate  in  a  vacuum.  The  effectiveness  of  the 
Recommendation  will  depend  on  its  functioning  within  a  regulatory  framework  and  should 
therefore be concretely implemented. Regulating authorities should be able to actively assess 
the Recommendation against the requirements set out for the authorised gambling operators. 
The  Commission  will  encourage  Member  States  to  endeavour  to  take  up  its  provisions  of 
within  their  regulatory  frameworks.  Member  States  may  set  out  more  detailed  provisions  at 
national  level,  in  law  or  in  regulatory  practices,  to  cater  for  respective  regulatory  systems, 
given that contexts differ from one Member State to another.  

79 

 
 
Additionally, self-regulatory approaches require  regular review as to whether the provisions 
are sufficient in meeting the objectives. The Commission will carry out such an assessment in 
cooperation with Member States to review its operation throughout the EU and to determine 
the course of action that may be subsequently called for. The findings will be published in the 
form  of  a  report.  Where  implementation  falls  short  of  the  core  principles  set  out,  the 
possibility of introducing more binding norms can be considered.  

The  Commission  encourages  the  Member  States  to  complement  the  Recommendation  on 
Responsible  Advertising  with  awareness  and  education  campaigns  at  national  and  regional 
level. This should include informing on the regulating authority so that the logo indicating an 
operator is authorised is well-recognised from a potential false one. 

The Recommendation does not replace national legislation nor applicable EU legislation. It is 
intended to compliment legislation, beyond what is already provided for. In addition, it will 
compliment  and  support  the  Recommendation  on  Common  Protection  of  Consumers  as 
well as the Unfair Commercial Practices Directive203. 

Finally, the Unfair Commercial Practices Directive has contributed to better protection of 
consumers against misleading or aggressive marketing. Misleading commercial practices can 
be  misleading  actions  or  omissions  and  to  this  effect  the  Directive  refers  to  information 
requirements  that  must  be  provided  to  consumers.  Aggressive  practices  include  those 
practices  that  use  undue  influence  impairing  consumer's  ability  to  make  a  decision.  To  this 
end the Commission will undertake a more prominent role in monitoring the Directive in the 
Member States. The Report on the application of the Unfair Commercial Practices Directive 
will  be  published  in  autumn  2012  and  will  assess  the  existing  relevant  provisions  aimed  at 
safeguarding  minors  and  vulnerable  groups.  The  Directive  covers  the  vulnerability  of 
consumers  and  protects  their  economic  interests;  it  does  not  extend  to  other  areas  such  as 
safety or health. 

7.5. Problem-gambling and gambling addiction 

The development of online gambling services gives rise to gambling disorder considerations. 
The  need  to  protect  consumers,  including  minors  and  vulnerable  groups,  from  potentially 
developing  a  gambling  problem  is  invoked  by  Member  States  in  restricting  or  limiting  the 
offer of online gambling or the types of games and bets that may be offered.  

One of the aims of the Green Paper has been to look at the potential social consequences of 
online  gambling.  The  Green  Paper  sought  to  gather  evidence  on  the  factors  linked  to  the 
different types of games or bets, the instruments used to keep gambling habits in check and 
types of games suggested to be more problematic, as well as the scale of the problem in the 
Member  States  and  available  treatment.  The  responses  primarily  point  to  a  limited 
understanding of problem-related gambling behaviour, which is needed so as to comprehend 
the  nature  and  scale  of  a  problem.  Conversely  this  is  also  needed  in  order  to  determine  the 
action  required,  both  as  regards  detection  and  prevention  measures  as  well  as  the  type  of 

203 Directive 2005/26/EC  

80 

 
 
                                                 
treatment.  These  findings  were  confirmed  by  the  expert  participants  in  a  workshop  on 
detection  and  prevention  of  problem  gambling  and  gambling  addiction  organised  by  the 
Commission services.  

Member States, the European Parliament and stakeholders call for more action at EU level in 
this  sphere.  A  main  objective  of  the  Recommendation  on  common  minimum  protection  of 
consumers is to prevent problem gambling or gambling addiction.  

The  Green  Paper  showed  that  there  are  marked  differences  (e.g.  scope,  criteria,  population 
range) in the studies and surveys on gambling carried out in the EU. The available studies do 
not  allow  for  comparisons  to  be  drawn  between  Member  States  or  for  instance,  the 
environmental factors that may be linked to the problem. The lack of empirical evidence or 
comparable national studies do not allow for a much-needed comprehension of the prototype 
and  percentage  of  the  adult  population  gambling  online  excessively  and  the  elements 
categorising the behaviour of a person. Current research or academic writings extend to two 
ends of the pendulum ranging from gambling overall viewed as inherently dangerous to views 
that  the  majority  of  the  population  and  players  in  that  respect  are  not  subject  to  gambling-
related actual harm. This is also because behavioural research in this area is in its infancy. 

Extracts from the Green Paper responses204: 

Year 
2007 Report  20,000  deemed  pathological  players  from  an  estimated 

+/- Scale of problem given 

MS 
Belgium 

Denmark 

2006 
Survey 

Finland 

2007 Study 

France 

Germany 

2009/10 
Phone 
Survey 
2011 Study 

Italy205  

2010 

Norway 

2008 
Survey 

100,000 players  
0.2%  of  18-74  deemed  addicted  to  gambling  at  some  stage, 
0.13% 'currently' addicted or had been in the last 12 months. 
A 2007 survey found 1 in 3 of problem gamblers referred to 
the internet 
3% of the population deemed problem gamblers, 1% deemed 
gambling addicts 
0.4%  of  18-85  deemed  pathological  gamblers,  0.8%  deemed 
problem gamblers (at moderate risk) 

0.35% of 14-64 deemed pathological gamblers, the prevalence 
of problem gambling is 0.31%, 1.41% are 'high risk gambling' 
1.01%  of  18-74  deemed  problem  gamblers,  1.71%  of  adult 
gamblers deemed problem gamblers 
0.7-0.8% of population deemed problem gamblers but not all 
can be categorised as pathological problem gamblers. Surveys 
for 2002 and 2007 provide the same % 

Poland 
Sweden

2010 Study  Adolescent (13-17) gaming: 1% deemed problem gamblers 

2009/10 
Study 

3% of the population deemed problem gamblers 
1.9%  deemed  at  moderate  risk,  0.3%  deemed  problem 
gamblers 

204 The data cannot be compared because the range, scope and criteria of terms used differ, and the surveys are a 
mix of online and offline offers and regulatory situations in the individual Member States. Link to contributions: 
https://circabc.europa.eu/faces/jsp/extension/wai/navigation/container.jsp 
205 Carried out by Lottomatica in collaboration with La Sapienza university of Rome and Eurisko 

81 

 
 
 
 
 
 
                                                 
UK 

2009/10 
Survey 

Problem  gambling  is  0.7%  or  0.9%  of  adult  population  (2 
screening  instruments  used).  Overall  prevalence  is  that  5.5% 
are  deemed  at  low  risk  gambling,  1.8%  at  moderate  risk 
gambling  and  92%  experience  no  problems  from  gambling. 
Online gambling represented 2% of the gamblers. 

2008 

1-2%  of  the  population  deemed  problem  gamblers  (at  risk 
players) 

2007 Study 

1% of players considered highly involved bettors 

Other 
INSERM 
global 
study206 
Harvard 
Medical 
School 
affiliate 

The prevalence level depends extensively on the tool used. A range of identification tests are 
used in prevalence surveys, with South Oaks Gambling Screen (SOGS) being the most used 
tool. Other surveys and studies may be carried out differently. Nonetheless, the scale of the 
problem  also  depends  on  the  population  used  as  the  denominator,  which  could  the  whole 
population or all of-age gamblers for example. 

A common set of criteria is called for, particularly to determine the link with the size of the 
problem  and  with  regulatory  approaches  including  monitoring  systems  for  early  problem 
detection. 

7.5.1.  Key challenges 

•  Understanding the definitions and terminology 

The  terms  generally  used  are  'problem  gambling',  'gambling  addiction',  'compulsive 
gambling', 'excessive gambling' and 'pathological gambling'.  There is a tendency to use the 
terms interchangeably but there are variances between these terms. 'Pathological gambling' for 
example means a mental disorder, according to the international disease classification systems 
DSM, IV, ICD 10. A 'problem gambler' for instance may gamble frequently or infrequently 
and does not need to gamble every day to manifest  symptoms  of  a  problem.  A  'compulsive 
gambler'  finds  it  difficult  to  control  the  impulse  to  gamble,  whilst  problems  caused  by 
'excessive  gambling'  are  not  only  financial  ones.  Impulsive  behaviour  in  itself  lends  to 
vulnerability of the player. 'Gambling disorder' is a more neutral term to refer to the issue. 

A complex pattern of genetic, neuropsychological, individual vulnerability and social factors 
are  relevant  to  the  development  of  an  expression  of  terms  used.  A  core  set  of  agreed 
definitions is needed for a better understanding of the problem, the scale of the problem at EU 
level, the determinants and the type of treatment required. 

•  Understanding the determinants 

206 http://english.inserm.fr: Institut National de la sante' et de la recherche medicale 

82 

 
 
 
 
 
                                                 
The Green Paper suggested non-exhaustive factors that may be relevant to the development of 
a gambling disorder: event/game frequency, payout interval, accessibility/social environment, 
chasing  losses/being  close  to  winning,  perceived  skills,  commercial  communications. 
Frequency,  duration  of  gambling  episodes  or  intensity  of  gambling  engagement  are  factors 
often highlighted. However, the responses to the Green Paper confirm the lack of researched 
evidence  on  the  factors.  Whilst  a  combination  of  factors  can  be  relevant  to  defining  the 
problem,  none  of  these  types  of  factors  individually  cause  the  development  of  a  gambling 
disorder or rank higher in terms of potential harm than another. Furthermore, consideration to 
the development of new markets or the expansion of existing ones is required, for instance the 
wider  accessibility  of  the  internet  to  young  people,  women and  ethnic  groups,  as  well  as  to 
pensioners. 

The lack of interdisciplinary collaboration restricts evidence on the situational and structural 
features  contributing  to  the  risk  of  problem  development.  There  are  also  genetic  features  to 
consider. Past manifestations of behavioural characteristics or disorders can also contribute to 
the risk, including previous gambling problems in the off-line environment. Accessibility of 
the  online  environment  and  the  development  of  new  enabling  technologies  can  be  a 
characteristic.  Available  research  suggests  that  online  gamblers  tend  to  be  frequent  players 
who take part in different forms of gambling not only online. Further research is required as to 
whether  internet  gambling  is  the  cause  of  problem  gambling  or  reflective  of  problem 
gambling.  

In addition, individual characteristics such as genetics, personality factors (impulsivity), early 
vulnerability  factors  (stress)  and  impaired  cognitive  control  must  play  a  role  in  the 
development of gambling disorders, compared to gambling characteristics and environmental 
factors. It is a minority of regular gamblers that develop some type of gambling disorder. 

The  Commission  services  feel  that  a  better  understanding  is  needed  amongst  researchers 
experienced in online gambling as to the direct or indirect link of these types of factors to the 
development  of  a  gambling  disorder  or  the  transition  to  pathological  gambling.  A  stronger 
evidence base for the possible links and relative risks will help identify and sustain adequate 
protective measures in the EU to deter the development of gambling disorder.  

As  regards  commercial  communications,  regulatory  frameworks  should  require  socially 
responsible  advertising  in  particular  for  the  protection  of  consumers  and  vulnerable  groups. 
Additionally,  imagery  and  test  should  not  give  rise  to  false  perceptions  about  gambling. 
Whilst advertising should be subject to regulatory oversight, this may be more challenging for 
online advertising. 

•  Understanding the types of games and bets 

In  the  EU/EEA  more  than  one  type  of  online  game  or  bet  can  be  promoted  and  offered  on 
authorised  gambling  sites  and  a  player  may  participate  in  more  than  one  type  at  any  time. 
There is no causal evidence available to allocate levels of risk to different types of games or 
bets as being more problematic or riskier than another.  Some games or bets may appear to be 

83 

 
 
more  problematic  than  others.  Slot  machines,  bingo,  casino-type  games  or  skill  games  are 
types of games that are sometimes cited as being potentially riskier both in the online and in 
the offline environment. However, whilst there is no supporting evidence the potential risks 
need to be seen alongside other situational features and corresponding factors.  

Players do use multiple gambling products and they also tend to have preferences for a type of 
game. The problem or addiction will be to gambling and not to an individual type of game or 
product.   

Regulators  not  just  business  need  to  appreciate  the  technology  and  be  up-to-date  on  related 
information. The Commission services encourage Member States to increasingly promote the 
use of risk-assessment mechanisms, such as the objectives of AsTERiG207 or GAM-GaRD208 
to test new products against a number of factors and determine the level of risk. The factors 
used  by  such  mechanisms  to  assess  the  potential  risk  of  products  are  not  unlike  those 
highlighted in the Green Paper. 

•  Understanding the preventive instruments 

The regulatory systems in the EU/EEA often require the authorised operator to have in place a 
number of preventive measures. However, a comparison of the impact of regulatory systems 
in the EU is needed to understand if these are effective in helping the prevention of problem 
development and facilitate early detection or if there is a risk that over-regulation or restricted 
competition leads players away from an authorised offer to an unauthorised one. 

The  Green  Paper  listed  the  instruments  most  often  used  to  protect  consumers,  including 
minors and vulnerable groups: age limits, self-limitation (financial and time), self-exclusion, 
information, warnings, self-tests, banning use of credit, reality checks, diligence obligations, 
restricting certain types of games or bets.  The responses clearly indicate that none of these 
measures can meet the objective individually, they are effective where all or most are required 
to protect players. As the summary to the responses shows, to varying degrees, these types of 
measures  are  in  place  in  a  number  of  Member  States,  mainly  through  legislation  or  license 
requirements  and  supplemented  by  industry  self-regulatory  measures.  Additional  detective 
and  preventive  measures  such  as  customer  support  or  remitting  player  funds  into  the  same 
deposit  account  are  referred  to  earlier.  Employees  responsible  for  player  monitoring  are 
warranted  so  as  to  be  able  to  detect  behavioural  changes  in  player  activity  and  have  the 
powers to act accordingly, such as triggering 'self-exclusion' if necessary. This should be part 
of the 'Know Your Employee' criteria. 

Players  should  be  able  to  follow  their  own  activities  online.  There  are  arguments  that  the 
online  environment  entails  the  risk  of  'loss  of  social  control'.  On  the  other  hand,  the  online 
environment offers technical possibilities for player self-control, alerts during game play and 
for close monitoring of individual player activity by the operator, which should enable early 
detection of behaviour symbiotic to the development of a problem. The supervisory role of the 

207 http://www.forschung-gluecksspiel.de/pdf/AsTERiG.pdf 
208 http://www.gamgard.com/ 

84 

 
 
                                                 
regulator  is  key.  The  regulator  should  have  sufficient  competence  to  be  able  to  carry  out 
adequate  monitoring  of  the  authorised  operators  and  follow-up  on  customer  complaints. 
Further research as to the effectiveness of these measures for the early detection of potential 
problem development is called for. This is also so as to better understand the potential shift 
from a 'social' gambler to a problem gambler. In this respect, data on the use of responsible 
gambling tools by the players would help such research. 

Self-exclusion and cooling-off possibilities 

Warning signs of addiction possibilities should be provided at all times on the operator's site, 
alongside  helplines  and  signposting  to  dedicated  support  sites.  The  possibility  of  immediate 
and confidential support to callers is of great importance. The responses to the Green Paper 
suggest  player  self-exclusion  possibilities  amongst  the  preventive  measures.  Generally, 
regulatory systems require that a player must be able to self-exclude or authorised operators 
provide for this as part of their responsible gambling tools. The self-exclusion period can be 
up to twelve months or more. However, there should be a minimum period for self-exclusion.  

Some  regulatory  systems  also  provide  for  cooling  off  periods  as  part  of  reality  check 
possibilities. Cooling-off enables player to voluntarily lock their account for a shorter period, 
in order to prevent themselves from online gambling participation. Cooling-off can be for 24-
hour period or longer.  

In  both  instances  however,  the  player  request  to  reactivate  an  account  should  be  done  by 
email  or  phone  to  the  authorised  operator,  in no  manner  giving  the  player  the  possibility  to 
reactive  the  account  simply  by  accessing  the  registered  player  account.  During  the  self-
inactivation  period,  efforts  should  be  undertaken  to  prevent  marketing  to  such  consumers, 
including emails. Furthermore, a player should also be able to choose further increments. The 
procedures  concerning  self-exclusion  and  cooling-off  similarly  to  warning  signs,  should  be 
readily  accessible  through  the  website.  Finally,  guidance  to  dedicated  assistance  should  be 
immediately  provided  by  the  operator  in  processing  exclusion  requests.  Where  exclusion 
requests  are  by  third  parties,  such  as  family  members,  the  identification  provided  should  be 
verified.  

In  some  Member  States  a  registry  of  self-excluded  persons  is  maintained.  However,  having 
such a registry in place at European level raises issues of enforcement and of data protection 
of individuals.  

•  Treatment 

In  the  EU  access  and  availability  of  general  or  dedicated  treatment,  including  counselling 
differs. In some Member States services are provided free of charge. Given the different types 
of centers and treatment possible, as well as respective national policy (e.g. in Scandinavian 
countries the system would view this from a social rather than a health perspective) it does not 
seem  opportune  to  promote  a  network  linking  national  research  centers.  Furthermore, 
gambling  disorder  treatment  is  not  necessarily  of  long  duration  as  for  other  behavioural 
disorders  and  often  the  treatment  required  is  brief  intervention  or  non-medical,  for  instance 
85 

 
 
debt-related  or  money-management  counselling.  However,  the  nature  of  the  treatment,  and 
whether this should be inpatient or out patient, should be dependent on the type of gambling 
disorder problem of the individual. 

There  are  also  social  repercussions  concerning  the  immediate  family  and  employment  for 
example resulting from the development of the problem or addiction. 

Funding 

The responses to the Green Paper on funding of problem gambling from gambling revenues 
provide that some Member States re-distribute parts of this revenue to treatment and research 
centers  or  to  education  campaigns.  Voluntary  contributions  by  operators  are  also  made 
directly or indirectly. The optimal scenario is that treatment is independent from industry and 
that  funding  is  channelled  through  governments  or  a  central/regional  fund  but  not  directly. 
Furthermore,  there  seems  to  be  scope  for  funding  being  directed  into  gambling-related 
research and education. 

7.5.2.  EU Initiatives 

The Commission believes that evidence is the first required step to determine the prevalence 
and the scale of the problem. Identification of the risk and vulnerability factors for gambling 
disorders and improved knowledge about the trajectories of the players are key objectives for 
setting out preventive actions as well as for defining the relevant treatment. The objective of 
having  adequate  measures  should  be  to  prevent  adverse  social,  economic  and  health 
consequences that may result from gambling.  

A trans-disciplinary EU co-funded project 'ALICE RAP' is underway with the objective 
of  re-framing  the  understanding  of  addiction  and  re-designing  addiction  policy  based  on 
objective scientific evidence209. Online gambling is one of addictions that is being researched, 
to help policy making and political decisions to be taken through informed debates. Whilst the 
overall  project  runs  for  5  years  given  its  broad  scope,  it  is  divided  into  areas  and  work 
packages  which  will  carry  out  interim  reports.  Gambling  will  be  researched,  with  other 
addictions, under the following working group areas:  

•  Counting  addictions:  definition  and  classification  of  addictions,  compiling  data  and 

impacts on health and society 

•  Determinants  of  addiction:  arriving  at  a  better  understanding  of  the  initiation  of  the 
problem,  the  transition  to  problem  use,  the  transition  to  dependence  and  emerging 
from the problem 

•  Business of addiction: studies of revenues, profits and participants in legal and illegal 

trade the impact of suppliers and the webs of influence on policy responses 

209 Co-financed by the Seventh Framework Programme for research and technological development, under the 
theme    'socio-economic  sciences  and  humanities'  and  coordinated  by  a  team  in  the  Fundació  Clínic  per  la 
Recerca Biomèdica (Hospital Clínic de Barcelona) 

86 

 
 
                                                 
•  Governance  of  addictions:  research  the  ways  in  which  societies  steer  themselves  to 
deal  with  different  lifestyles,  present  governance  practices  on  established  and 
emerging addictions and future scenarios. 

The findings of the research work, together with the review of the Recommendation and the 
Code  of  Conduct,  will  assist  the  Commission  to  determine  further  action  in  this  field.  The 
project  is  also  envisaged  to  provide  a  consolidated  figure  for  the  percentage  of  problem 
gambling in the EU. 

Initiatives under Horizon 2020 will seek to deepen the scientific understanding of consumer 
behaviour  and  health,  safety  and  sustainability  dimension  of  choices  they  face.  Through  a 
challenge-based approach it aims to bring together resources and knowledge across different 
fields, technologies and disciplines. It covers activities from research to market. Funding will 
include focus on health, demographic change and wellbeing. The Commission publishes calls 
for proposals. 

Education and awareness should be part and parcel of preventive measures by Member States. 
This  public  information  can  be  made  available  through  self-tests,  advertisements  and 
brochures and also by dedicated government authorities or agencies 

The Commission services also see the relevance of bringing the public health dimension into 
the  debate  as  it  broadens  the  focus  on  individual  behaviour  and  it  would  also  better-
encompass  societal  issues  and  costs.  Therefore,  the  Commission  will  capitalise  on  the 
meetings with experts from Member States working with the relevant Commission services, 
such  as  the  expert  group  on  mental  health.  These  can  serve  to  draw  up  common  actions  or 
good  practice  guidelines  of  national  authorities,  including  health  promotion  agencies,  and 
research  networking  across  the  Member  States.  This  is  also  in  consideration  of  the  role  of 
health authorities in developing relevant policies in the Member States.  

Minors  and  adolescents  are  a  specific  vulnerable  group  in  looking  at  risk  of  addictive 
behaviour of persons. A Study on Internet Addictive Behaviour of Minors is being carried 
out  through  EU  NET  ADB  project  which  is  evaluating  the  prevalence  and  determinants  of 
addictive  behaviour.  The  project  is  looking  at  specific  issues  on  the  magnitude  of  internet 
addictive  behaviour,  the  factors  that  lead  to  development  of  addictive  behaviours,  the 
consequences  and  the  psycho  social  correlates.  Increasing  awareness  amongst  relevant 
stakeholders  and  the  public  at  large,  and  improving  the  knowledge  base  towards  bettering 
public health strategies related to internet addictive behaviour amongst the young in Europe is 
an intrinsic objective of the project. The project outcome should feed into policy making and 
awareness  raising  as  well  as  provide  impetus  for  further  actions  and  studies,  in  particular 
through the harmonized databank that will be developed. Finally, the policy recommendations 
stemming from this project, which are for October 2012, will be both for the Commission and 
Member States. 

87 

 
 
Further, Commission services will draw from the surveys that are carried out by Eurostat on 
behaviour  of  children  more  generally,  every  3-5  years  with  a  view  to  conducting  more-
tailored surveys.  

88 

 
 
 
8.  FIGHT AGAINST FRAUD AND MONEY LAUNDERING 

The prevention of fraud and money-laundering are amongst the main objectives of Member 
States regarding public order. In principle, all existing national gambling regulations seek to 
prevent  and  tackle  gambling  fraud  in  order  to  protect  consumers  as  well  as  gambling 
operators.  Different  types  of  fraudulent  behaviour  may  occur  in  the  online  gambling 
environment but among them identity theft seems to be the most frequently committed crime. 
Identity theft may be defined as the misuse of personal data in order to impersonate another 
individual with the intent to commit an illegal activity (e.g. abusing the victim’s banking or 
other facilities,  unduly  gaining  employment or receive medical treatment). In the context of 
online  gambling,  identity  theft  aims  at  opening  a  player's  account  falsely  and  is  very  often 
linked with unauthorised use of credit cards in order to obtain a credit and other benefits in 
another person's name.  

Another common fraudulent behaviour identified by stakeholders is the so called chargeback 
fraud.  This  occurs  when  an  individual  claims  that  a  transaction  is  fraudulent  and  the  credit 
card  issuer  then  debits  the  money  from  the  merchant's  account.  This  facility  is  designed  to 
protect consumers from fraudulent use of their credit card, but can also be used to try to get 
back  any  losses  they  may  have  occurred  while  gambling.  It  is  suggested  that  a  significant 
number  of  these  claims  are  fraudulent.  When  it  comes  to  cyber-attacks  against  gambling 
operators'  infrastructure,  their  frequency  and  risk  is  not  considered  higher  than  in  any  other 
industry sector. 

As for money laundering, there is currently very limited information or evidence suggesting 
that licensed online gambling operators in Europe are subject to money laundering activities.  
The prevailing problem is linked to unregulated operators who are offering their services at a 
distance  from  outside  of  the  EU  with  either  no  or  a  very  low  degree  of  regulation  and 
supervision.  

The  fact  that  regulated  gambling  operators  are  subject  to  strict  antifraud  and  anti-money 
laundering provisions, which stem either from licensing conditions including certification of 
gambling equipment or internal risk assessment procedures, does not, however, mean that no 
problematic  issues  arise,  in  light  of  the  cross  border  context.  It  seems  that  structured 
cooperation  between  national  gambling  authorities,  national  police  and  international 
enforcement authorities needs to be enhanced given the complexity of fraudulent transactions 
operators and regulators have to face. In a number of jurisdictions either no online gambling 
regulations exist or there are weak regulations and the lack of cooperation at the international 
level,  including  with  authorities  such  as  Interpol,  gives  rise  to  problems  in  the  cross-border 
application  and  enforcement  of  existing  tools,  such  as  customer  verification  checks, 
transactions and audit trail integrity. 

8.1. Commission initiative on identity theft  

The  Commission  has  been  addressing  identity  theft  for  several  years,  both  with  legislative 
measures and with other initiatives. In 1995 a Directive on the protection of individuals with 

89 

 
 
regard to the processing of personal data was adopted210.  The Directive laid down rules for 
the legitimacy and the confidentiality and security of data processing. The EU Action Plans 
2001-2003 and 2004-2007 on fraud on non-cash means of payment developed public/private 
cooperation between the financial sector, law enforcement agencies, other Ministries, retailers 
and consumer groups211.  

The  need  to  more  effectively  combat  identity  theft  on  a  transnational  level  has  been 
recognized in the EU policy framework on several occasions, such as for example in the 2009 
Stockholm Programme212 and in the 2010 Council Conclusions on Preventing and Combating 
Identity-Related Crimes and on Identity Management.213 The Commission also carried out a 
study on the status quo of the legal framework governing identity theft in the Member States, 
which  resulted  in  a  2011  report  on  the  "Comparative  Study  on  Legislative  and  Non-
Legislative Measures to Combat Identity Theft and Identity-Related Crime". As a follow up to 
this  report,  the  Commission  has  launched  an  external  study  for  an  impact  assessment  to 
explore what is needed to tackle the issue of identity theft effectively. Subject to the results of 
the  study  and  the  Commission  impact  assessment,  such  provisions  may  include  a  common 
definition of identity theft, the establishment of identity theft as a criminal offence, measures 
to  protect  the  victims  of  identity  theft,  and  an  obligation  to  establish  national  reporting 
mechanisms that would also allow a follow-up of complaints.  

In this context, the possibility of mandating the European Cybercrime Centre214 to cover other 
forms of cybercrime than those related to identity theft such as hacking into on-line gambling 
systems, will be explored. The European Cybercrime Centre, which will be established within 
Europol in the beginning of 2013, will strengthen the EU's capacity to tackle cybercrime and 
could contribute to addressing other forms of cybercrime. It should, amongst other, help the 
fight against online identity theft by tackling organized crime groups involved in online fraud 
through stolen credit cards and banking credentials. The Centre should act as the focal point 
in the fight against cybercrime in the EU, having four core functions 

• 
• 
• 

it should serve as the European cybercrime information focal point,  
it should pool European cybercrime expertise to support Member States,  
it should provide support to Member States' cybercrime investigations,  

210 Directive 95/46/EC of the European Parliament and of the Council  of 24 October 1995 on the protection of 
individuals with regard to the processing of personal data and on the free movement of such data 
211 Communication from the Commission to the Council, the European Parliament, the European Economic and 
Social Committee, the European Central Bank and Europol of 20 October 2004 - A new EU Action Plan 2004-
2007  to  prevent  fraud  on  non-cash  means  of  payment  [COM(2004)  679  final  –  Official  Journal  C  49  of 
28.6.2006]. 
212  The  Stockholm  Programme:  An  open  and  secure  Europe  serving  the  citizen,  is  a  five-year  plan  with 
guidelines for justice and home affairs of the member states of the European Union for the years 2010 through 
2014. 
213  Council  conclusions  on  preventing  and  combating  identity  related  crimes  and  on  identity  management, 
including the establishment and development of permanent structured cooperation between the Member States of 
the European Union, adopted on 2 and 3 December 2010 
214  Communication  from  the  Commission  to  the  Council  and  the  European  Parliament  of  28  March  2012 
Tackling Crime in our Digital Age: Establishing a European Cybercrime Centre COM(2012) 140 final, Council 
Conclusions of 4 June 2012 on the establishment of a European Cybercrime Centre 

90 

 
 
                                                 
• 

it should become the collective voice of European cybercrime investigators across law 
enforcement and the judiciary. 

8.2. The EU Anti-Money Laundering Directive  

The  Green  Paper  consultation  has  confirmed  that  the  following  practices  are  being  used  for 
money laundering purposes: 

•  Online gambling firms credit winnings or unused funds back to an account other than 

the one from which the original bet was made, 

•  Players are allowed 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. Players will make large bets on very bad hands (expecting to lose to the 
accomplice), 

•  Use of e-cash as a payment option or similar means of payments such as Stored Value 
Cards (those of concern are characterised by high limits, no post-purchase monitoring 
and poor KYC controls).  

As  regard  the  EU  legislative  framework,  the  AMLD215)  applies  to  casinos  with  regard  to 
gambling  activities.  The  term  'casinos'  is  not  defined  in  the  Directive.  In  addition  to  the 
general  aspects  caught  by  the  Directive  as  described  above  in  section  4.1,  the  Green  Paper 
consultation  shows  that  regulated  online  gambling  operators  and  national  regulators  have 
established a range of operational practices to fight against money laundering. These include:  

•  Customer  due  diligence  tools  aimed  at  verifying  the  player’s  identity,  the  player’s 
place  of  residence  and,  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  whereby  the  player  should  always  receive  any  pay  out  from 
winnings by the same means in which the money was originally received (and to the 
account from which it was deposited). Operators also carry out controls over the credit 
card  numbers  and  personal  data,  relating  to  players,  which  they  have  stored  in  their 
systems.  Moreover,  direct  payments  between  customers  are  often  prohibited.  With 
regard  to  the  use  of  means  of  payment  (e.g.  credit  cards,  pay  safe  cards)  for  online 
gambling,  it  is  suggested  that  these  could  pose  different  risks  in  terms  of  fraud  and 
money laundering. Some may be subject to identity thefts whilst others, due to their 
anonymity, could be abused for money laundering operations. Operators deal with the 
different fraud/money laundering risks within the due diligence checks carried out on 
customers, taking account of the degree of regulation of the different payment systems 
and anti-money laundering controls already applicable to the financial sector. 

215 Directive 2005/60/EC 

91 

 
 
                                                 
•  Operational  controls  whereby  operators  use  age  verification  lists  and  lists  used  by 
banks to identify terrorists and politically exposed persons (PEPs), i.e. World Check  
and  the  European  Sports  Security  Association's  (ESSA  )  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).  

There  is  a  broad  demand  to  extend  the  scope  of  application  of  the  AMLD  to  all  types  of 
games of chance. This general support for a broader definition of gambling under the AMLD 
is  based  on  a  number  of  reasons.  Namely,  to  create  a  level  playing  field  for  all  gambling 
operators  since  the  cost  of  compliance  would  give  entities  that  are  not  covered  an  "unfair" 
economic  advantage,  and  to  remove  market  access  obstacles  arising  from  the  application  of 
different national anti-money laundering regulations in the field of gambling.   

The  Directive  is  currently  under  review  and  the  Commission  services  have  been  seeking 
views from stakeholders about how the Directive is applied, and what possible changes could 
be introduced when the Directive is revised. The process of revision of the AMLD will not be 
confined  to  a  straight  implementation  of  the  new  FATF  international  standards.  The 
Commission is conducting its own review process to assess the need for change to EU rules 
beyond simply taking on board the new FATF standards. The Commission will reflect on how 
broad  the  definition  of  gambling  should  be,  and  how  could  proportionality  be  assured  (for 
example, ensuring that bars and social establishments that include one or two slot machines 
would not fall under the AMLD rules).  

8.3. Certification of gambling equipment  

Certification  of  gambling  equipment  is  another  instrument  used  in  the  gambling  sector  in 
order  to  prevent  fraud.  Certification  of  online  gambling  software  is  commonly  required  by 
Member State's competent authorities within the process of gambling licence application. To 
that  end  accredited  testing  agencies,  specialising  in  the  certification  of  online  gambling 
software and systems are being entrusted. 

In  this  context,  there  is  a  strong  call  by  gambling  operators  for  more  approximation  of 
technical standards so that re-testing and certification of equipment, with the associated costs, 
is not required.  The Commission services indeed believe that in order to ensure a comparable 
level of security of online gambling in the EU as well as to reduce the administrative burden 
relating  to  different  national  certification  procedures,    it  would  be  useful  to  explore  the 
possibility of introducing an  EU standard on gaming equipment certification. The main added 
value  of  European  standardisation  is  facilitation  of  free  movement  of  goods  and  services. 
Standards  normally  increase  competition  and  lower  output  and  sales  costs,  benefiting 
economies  as  a  whole.  In  addition  standards  may  maintain  and  enhance  quality,  provide 
information  and  ensure  interoperability  and  compatibility,  thereby  increasing  value  for 
consumers.  European  standards  are  adopted  by  CEN,  the  European  Committee  for 

92 

 
 
Electrotechnical  Standardisation 
Standards Institute (ETSI).  

(CENELEC)  or 

the  European  Telecommunications 

93 

 
 
 
9.  INTEGRITY OF SPORT AND MATCH FIXING  

The Commission fully acknowledges the seriousness of the problems related to match fixing 
that are affecting the ethics and integrity of sport. In the Communication on Developing the 
European Dimension in Sport216, the Commission addressed the issue of sports integrity and 
proposed  a  number  of  initiatives  to  be  taken  over  the  next  few  years.  Furthermore,  the 
Commission  adopted  in  June  2011  a  package  of  measures  which  cover  the  fight  against 
corruption at EU level and which includes corruption in sport, match fixing in particular217.  
Within  the  Green  paper  consultation  on  online  gambling  in  the  Internal  Market218,    the 
Commission  sought  i)  to  understand  the  scale  of  the  problem,  ii)  to  map  the  measures 
currently in place in order to combat match fixing as well as the efficiency of these measures.  

The European Parliament has also given consideration to the issue of match-fixing, in its 2009 
Resolution  on  the  integrity  of  online  gambling  (the  'Schaldemose  Report')219,  the  2011 
Resolution  on  online  gambling  in  the  Internal  Market  (the  'Creutzmann  Report')220,  and  the 
2012 Resolution on the European Dimension in Sport (the 'Fisas Report')221. The Council first 
dealt  with  the  fight  against  match-fixing  in  the  EU  Work  Plan  for  Sport  and  in  November 
2011 adopted conclusions on combating match-fixing. In these conclusions, Member States, 
the Commission and relevant stakeholders are invited to forge  close cooperation in order to 
better  protect  the  integrity  of  sport.  The  two  EU  agencies  in  charge  of  cross-border  judicial 
and  police  cooperation,  EUROPOL  and  EUROJUST,  are  also  actively  involved  in  the  fight 
against match-fixing through the establishment of Joint Investigation Teams (JIT) involving 
several countries. 

Besides the EU, on 28 September 2011, the Committee of Ministers of the Council of Europe 
adopted the Recommendation on the promotion of integrity of sport against manipulation of 
results,  notably  match-fixing.222  On  15  March  2012,  the  Council  of  Europe's  Conference  of 
Ministers Responsible for Sport meeting in Belgrade invited the Enlarged Partial Agreement 
on  Sport  (EPAS)  to  launch  the  negotiations,  in  coordination  with  the  EU,  on  a  possible 
international legal instrument (Convention) against the manipulation of sports results, notably 
match  fixing.  Negotiations  on  the Convention  are  expected  to  be  launched  in  autumn  2012, 
following  the  meeting  of  the  Committee  of  Ministers  of  the  Council  of  Europe  on  13  June 
2012. 

The International Olympic Committee launched a working group in March 2011, composed 
of  high-level  representatives  of  the  sport  movement,  public  authorities,  international 

anti-corruption  measures 

216 Communication from the Commission to the EP, the Council, the Economic and Social Committee and the 
Committee of Regions "Developing the European Dimension in Sport, 18/1/2011 COM(2011) 12 final 
217  Package  of 
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/678 
218 Commission's Green paper on online gambling in the Internal Market COM (2011) 128 final  
219 2008/2215(INI) 
220 2011/2084(INI) 
221 Motion for a European Parliament resolution on the European dimension in sport (2011/2087(INI)) 
222  Recommendation  CM/Rec(2011)10  of  the  Committee  of  Ministers  to  member  states  on  promotion  of  the 
integrity of sport against manipulation of results, notably match-fixing (Adopted by the Committee of Ministers 
on 28 September 2011) 

the  Commission  on  6 

adopted  by 

June  2011, 

94 

 
 
                                                 
organisations including the European Commission, and betting operators. The objective of the 
working  group  is  to  propose  ways  to  fight  against  irregular  and  illegal  sports  betting.  A 
roadmap for follow-up action was adopted by the working group on 2 February 2012223. 

There  are  currently  various  interpretations  of  the  concept  of  match-fixing,  also  described  as 
sporting  fraud  or  sport-fixing.  The  Commission  services  believe  that  an  agreed  definition 
would facilitate a common understanding of the problem and would ensure that an appropriate 
legal  arsenal  is  in  place  to  fight  against  this  phenomenon.  The  definition  provided  in  the 
Council  of  Europe  Recommendation  on  the  promotion  of  integrity  of  sport  against 
manipulation of results, notably match fixing, provides a good working basis for this purpose:  

"The manipulation of sports results covers the arrangement on an irregular alteration of the 
course  or  the  result  of  a  sporting  competition  or  any  of  its  particular  events  (e.g.  matches, 
races…)  in  order  to  obtain  financial  advantage,  for  oneself  or  for  other,  and  remove  all  or 
part of the uncertainty normally associated with the results of a competition". 

Despite the lack of a common definition, there is a broad agreement amongst all stakeholders 
that match fixing poses a direct threat to the integrity of sport competitions. Past experience 
shows that match fixing can occur both with and without the involvement of betting operators. 
This  means  that  not  all  match  fixing  scandals  are  necessarily  betting-related224.  When  it 
comes  to  betting-related  match  fixing,  Member  States,  sport  organisations  and  regulated 
gambling operators seek to fight this specific type of gambling fraud in order to, in particular:  

1.  protect financial interests of both players (consumers) and regulated operators,  
2.  prevent money laundering through betting on events with fixed outcome,  
3.  protect  fairness  in  sport  which  is  crucial  for  sport  organisations  as  well  as  for 

individual sportspeople.  

Match fixing occurs in both the offline and the online gambling markets, and both regulations 
and  self-regulations  seek  to  address  this  threat  in  similar  ways,  at  the  same  time  taking 
account  of  technical  specificities  of  the  particular  platform  used.  In  this  context,  it  is 
suggested  that  in  regulated  markets,  due  to  customer  identity  verification  procedures  and 
profiling  of  customer's  behaviour,  online  bets  are  less  anonymous  than  offline  bets  and, 
therefore, match fixing threats are more detectable in the online segment. When it comes to 
sport disciplines exposed to match fixing, whilst it is easier to influence the outcome of events 
of  individual  sports,  football  seems  the  most  threatened  discipline  because  of  its  popularity 
and the liquidity volume involved.  

As regards the scale of the problem, the Commission services note a lack of reliable data since 
in the majority of cases online betting related match fixing seem to occur, through gambling 
operators established in unregulated markets outside the EU.  Statistics confirm that regulated 

223 IOC recommendation against match fixing of 2 February 2012 
224  Research  by  the  Centre  for  the  International  business  of  Sport  at  the  University  of  Coventry  shows  that 
57.89%  of  proven  match  fixing  cases  between  200-2010,  which  were  subject  to  analysis,  were  betting  related 
and 42.11% of them non-betting related.  

95 

 
 
                                                 
operators detected very few match scandals over the past few years225. It certainly has to do 
with  the  fact  that  in  regulated  gambling  markets  monitoring  mechanisms  designed  to  detect 
suspicious  betting  patterns  have  been  developed  by  regulators,  gambling  operators  or  sport 
federations and, therefore, fraud attempts are likely to be efficiently tackled. On the contrary, 
cases originating outside regulated markets cannot be systematically monitored and, therefore, 
there is a real lack of information concerning the scale of match fixing at global level. By way 
of  example,  Interpol  has  conducted  four  soccer  gambling  operations  (SOGA)  over  the  past 
years targeting illegal football gambling across South-East Asia. These operations led to more 
than 7,000 arrests, closure of illegal gambling dens226 and seizure of close to $27 million in 
cash. 

9.1. Existing anti-match fixing measures  

As  far  as  the  current  measures  to  combat  match  fixing  are  concerned,  a  number  of  various 
regulatory  (gambling  licensing  conditions,  statutes  of  sport  federations)  and  self-regulatory 
mechanisms  (codes  of  conduct),  exist,  introduced  either  individually  or  jointly  by  Member 
States,  sport  federations,  associations  of  athletes  and  gambling  operators.  Educational 
campaigns  for  athletes,  coaches  and  referees  are  in  place  but  it  is  often  questioned  whether 
these  adequately  reach  out  to  the  targeted  audience227.  Other  preventive  measures  used  are 
conflict  of  interest  rules  such  as  betting  bans  for  sports  people  and  their  family  relatives, 
betting  bans  for  employees  of  operators,  exclusion  of  certain  events  from  betting  such  as 
youth competitions, limitation or prohibition of certain types of bets, authorisation of bets by 
sport bodies, bet monitoring systems, alert tools (whistle blowing, hotlines), mutual reporting 
obligations  applied  between  operators,  sport  bodies  and  gambling  regulators  (e.g.  through 
memoranda of understanding).  

In the context of anti-match fixing measures, it is argued by some that certain types of bets 
increase the risk of an event being fixed and should be, therefore, prohibited. There are also 
calls for a system whereby sport federations remain in control of the way bets are offered on 
competitions organised by them. The Commission services believe that as regards limitation 
and  regulation  on  types  of  bets  and/or  types  of  events  on  which  bets  can  be  placed,  further 
debate is necessary. Whilst at this stage it may be difficult to determine by law for all sports 
which types of bets are or are not allowed, the risk to the integrity of sport should be a factor 
in  determining  which  bets  may  be  offered.  Gambling  regulators  could  play  a  role  in  this 
context, certainly facing the challenge to strike the right balance between commercial interests 

225  According  to  its  Integrity  Report  2010,  the  European  Sports  Security  Association  (ESSA)  identified  58 
incidences  across  its  members  in  2010  that  were  deemed  to  be  irregular.  Only  4  of  these  58  alerts  were 
suspicious and their case files were sent to the relevant sports governing bodies. In 2011, there were 69 alerts 
leading  to  8  referrals  of  suspicious  betting  patterns  to  the  relevant  sports  governing  and  gambling  regulatory 
authorities.  The  European  Lottery  Monitoring  System  (ELMS),  founded  in  1999,  investigated  5000  matches 
between January and April 2011 and raised 93 alerts. According to research by the Centre for the International 
business of Sport at the University of Coventry cases out of 2089 proven cases of corruption over the period 200-
2010, which were subject to analysis, only 57 concerned match fixing (both betting and not betting related). 
226 These dens handled more than $2 billion worth of bets. 
227  According  to  research  conducted  by  Sport  Athletes,  in  the  UK  40%  of  football  players  and  60%  of  rugby 
players are not aware of rules/limitations on self-betting enshrined in statutes or contracts with sport federations. 
96 

 
 
                                                 
of  gambling  operators  and  interests  of  sport  bodies  so  that  customers  are  not  directed  to 
unregulated  markets  with  more  attractive  gambling  offers.  Therefore,  increased  structured 
dialogue  between  gambling  regulators,  sport  bodies  and  gambling  operators  is  certainly 
necessary.  Cross  border  dialogue  and  exchange  of  best  practice  between  national  gambling 
regulators  is  equally  important  in  this  respect  given  the  differing  regulatory  approaches  in 
Member  States.  In  this  context,  the  Commission  will,  by  using  part  of  the  funds  available 
under  the  2012  Preparatory  Action  for  European  Partnerships  in  Sport,  launch  test  projects 
aimed at promoting international cooperation in the fight against match fixing notably in the 
area of prevention through education and awareness-raising mechanisms228.  

Various regulatory and self-regulatory mechanisms also exist in relation to sponsorship and to 
ownership  of  sport  events/clubs  by  gambling  operators,  bearing  a  different  degree  of 
restriction across Member States and sport disciplines. In general, the responses to the Green 
Paper consultation indicate that sponsorship by betting companies of sport clubs or sporting 
competitions  does  not  create  a  higher  risk  of  fixed  outcome  of  an  event,  especially  in  well 
regulated  gambling  markets.  Operators  seek  sponsorship  of  sport  events  and  clubs  within 
regulated  markets  because  this  gives  credibility  and  fair  play  labels  and  in  this  way 
distinguish them from the unregulated operators.  

As for bet monitoring systems, a number of them are currently used by stakeholders such as 
sports governing bodies, betting operators and gambling regulators. A number of memoranda 
of  understanding  on  sharing  of  intelligence  and  data  have  been  signed  between  some 
regulated  operators  and  large  sport  federations  as  well  as  between  regulated  operators  and 
gambling regulators. It is, nonetheless, evident that effectiveness of these systems is limited to 
bets placed through operators providing services in regulated markets. Data protection issues 
are  often  mentioned  as  a  barrier  for  sharing  information,  in  particular  with  regard  to  match 
fixing  alerts  involving  player's  sensitive  data.  Furthermore,  it  seems  that  the  various  bet 
monitoring  systems  currently  in  place  should  be  better  coordinated  and  complement  each 
other, in order to increase the overall efficiency of detection of match fixing threats. To that 
end, a higher level of cooperation seems necessary both at national and international level.   

With  regard  to  financing  of  sports  integrity  mechanisms/measures  including  bet  monitoring 
systems, there are clearly different approaches across Member States. For example, the Italian 
gambling  regulator  runs  its  own  real  time  monitoring  system,  financed  from  gambling 
licensing fees, France by law requires the operators to directly contribute to sport federations 
in charge of the event on which bets are placed, whilst in the UK sports integrity measures are 
financed  by  the  sport  sector  itself.  Also  gambling  operators  (both  lotteries  and  commercial) 
have established their own detection systems in order to protect themselves from the negative 
effects of match fixing. None of the financing models currently applied has been found to be 
more  or  less  efficient  than  the  others.  Nonetheless  and  as  stated  by  the  Commission  in  its 

228 In March 2012 the Commission adopted the 2012 Annual Work Programme on "grants and contracts for the 
Preparatory  Action  -  European  Partnership  on  Sports  and  for  the  Pilot  Project  -  Knowledge  Partnerships".  On 
this  basis,  the  Commission  launched  a  call  for  proposals  to  support  transnational  projects  presented  by  public 
bodies or civil society organisations in the field of sport. See http://ec.europa.eu/sport/news/20120417-2012-call-
for-proposals_en.htm 

97 

 
 
                                                 
the  European  Dimension 

in  Sport"229,  sport 
Communication  entitled  "Developing 
stakeholders  perceive  challenges  with  regard  to  continued  income  streams  from  gambling 
activities  into  sport.  Regulatory  approaches  vary  among  Member  States  in  areas  relating  to 
intellectual  property  rights  and  gambling  activities,  in  particular  regarding  the  extent  of 
property rights for the organisers of sport competitions in relation to the events they organise, 
as well as the issue of image rights in sport.  

The Court of Justice has in a recent judgment230 held that "sporting events cannot be regarded 
as intellectual creations classifiable as works within the meaning of the Copyright Directive. 
That applies in particular to football matches, which are subject to rules of the game, leaving 
no room for creative freedom for the purposes of copyright. Accordingly, those events cannot 
be protected under copyright. It is, moreover, undisputed that European Union law does not 
protect  them  on  any  other  basis  in  the  field  of  intellectual  property.  Nonetheless,  the  Court 
also stated that "sporting events, as such, have a unique and, to that extent, original character 
which can transform them into subject-matter that is worthy of protection comparable to the 
protection  of  works,  and  that  protection  can  be  granted,  where  appropriate,  by  the  various 
domestic  legal  orders.".  In  order  to  further  explore  the  nature  and  scope  of  property  rights 
owned  by  organisers  of  sporting  competitions,  the  Commission  has  launched  an  external 
study231. The aim of the study is to provide a comprehensive analysis of the issues related to 
sports organisers' rights from an EU perspective and to formulate suggestions as to whether 
EU action is needed to address any identified problem in this respect.  

9.2. Criminalisation of match fixing  

As a follow up to the Communication on Developing the European Dimension in Sport, the 
Commission carried out a study on how sporting fraud offences, and notably match fixing, are 
being covered by the national laws of the Member States. The aim of the study was to enable 
the  Commission  to  assess  whether  EU  action  in  this  field  is  necessary.  The  study  results 
suggest that difficulties in prosecuting match fixing are frequently more of an operational than 
legal  nature  (difficulties  in  gathering  evidence,  prioritisation  of  cases  and  cooperation 
amongst law enforcement authorities). The study also showed that the specific incrimination 
of  sport  offences  did  not  necessarily  lead  to  a  better  track  record  in  courts  or  to  fewer 
suspicious  cases.  In  particular  due  to  the  lack  of  broader  EU  acquis  in  the  area  of  sport 
offences,  combating  match  fixing  at  EU  level  by  establishing  a  common  definition  of  sport 
fraud is not a feasible policy option at this stage. The Study also served as a basis for a debate 
in  the  Commission  and  Member  States'  Expert  Group  'Good  Governance',  which  concluded 
that despite the existence of differences in the Member States' legal frameworks applicable to 
match-fixing,  harmonisation  through  an  EU-defined  crime  of  sporting  fraud  does  not  seem 
necessary. Having  said this, Member States have been invited  to consider the  adoption of a 
possible  international  legal  instrument  against  match-fixing  aimed  at  ensuring  that  national 

229 Section 3.2, COM(2011) 12 final 
230  Judgment  of  4  October  2011  in  joined  cases  C-403/08  and  C-429/08  Football  Association  Premier  League 
and Others, par. 98-100. 
231  Open  Call  for  tender  EAC/18/2012,  Study  on  sports  organisers'  rights  in  the  EU  Contracting  Authority: 
European Commission Directorate-General for Education and Culture 

98 

 
 
                                                 
legal  and  administrative  systems  are  provided  with  the  necessary  legal  tools,  expertise  and 
resources to combat this phenomenon.  

When it comes to harmonisation of sanctions imposed as a result of match fixing, it should be 
stressed  that  without  a  harmonisation  instrument  in  place,  criminal  and  administrative 
sanctions cannot be laid  down at EU level. The only EU instrument in place in this field is 
Framework Decision 2003/568/JHA232 on private corruption which, however, leaves Member 
States free to set levels of sanctions and penalties.  

9.3. International cooperation on match fixing  

Law enforcement cooperation of police and judicial authorities across borders is essential in 
view of the transnational nature of match fixing, in particular when it is betting-related. EU-
wide  coordination  is  currently  implemented  through  Europol  and  Eurojust.  Cooperation  at 
international  level  between  Europol  and  Interpol  is  also  in  place  whilst  no  international 
equivalent  of  Eurojust  exists.  The  Commission  services  suggest  that  the  next  orientation 
document  to  be  adopted  by  the  Council  with  a view  to  providing  guidance  on  the  action  of 
Europol includes a reference to the fight against match-fixing as a type of serious cross-border 
crime. 

Furthermore,  the  Commission  services  cooperate  with  and  participate  in  meetings/working 
groups of the IOC and the Council of Europe. A series of measures aiming at addressing this 
phenomenon in a global manner have been recently recommended by these two organisations. 
Concerning cross-border cooperation at EU level, the Commission services will, through the 
expert  group  on  gambling,  seek  Member  States  views  on  whether  and  how  to  enhance 
cooperation  amongst  public  authorities,  including  enforcement  bodies,  in  the  fight  against 
betting related match fixing. It seems that the creation of national points of intelligence, where 
all relevant actors involved in fighting  match  fixing  at  national level would meet, exchange 
information and coordinate actions, would be the first necessary step for efficient cooperation 
at EU and global level. In this context, the possibility of including the protection of integrity 
of  sport  and  the  fight  against  match-fixing  as  topics  for  political  discussion  with  third 
countries  and  the  competent  international  organisations  in  the  field  of  sport  will  equally  be 
explored  by  the  Commission  services.  To  that  end,  identification  of  countries  that  raise 
specific issues in terms of betting related match-fixing of sport events taking place within the 
EU would be necessary.  

232 Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector 

99 

 
 
 
 
                                                 
10. FINANCING  SYSTEMS  FOR  BENEVOLENT  AND  PUBLIC  INTEREST 

ACTIVITIES  

As regards financing of public interest activities from revenue derived from gambling this is 
of  paramount  importance  for  all  Member  States.  This  was  clearly  highlighted  in  the 
contributions to the Green Paper. One of the objectives of the Green Paper consultation has 
been to determine the revenue streams from online gambling services and the mechanisms in 
place  in  the  EU.  The  consultation  encompassed  the  relevant  public  interest  objectives  that 
gambling touches upon, including the policy reasons invoked to justify the objectives such as 
the financing of benevolent or public interest activities, including sport. The Council stressed 
in  its  conclusions  of  December  2010  on  the  framework  for  gambling  and  betting  in  the  EU 
Member States233 that 'contributions, in particular from state lotteries or lotteries licensed by 
the competent state authorities pay an important role for society via for example the funding 
of good causes, directly or indirectly, where applicable'. 

The Green Paper suggested gambling-derived revenue channelling systems in place in the EU. 
The contributions confirmed that diverse systems have been set up in the Member States to 
collect  the  revenue  from  all  forms  of  gambling  (online  and  offline)  and,  in  turn,  to  allocate 
these  to  activities  of  interest  to  society  at  large.  Within  this  context,  examples  of  existing 
systems  broadly  include  the  granting  of  a  licence  for  gambling  services  often  to  a  pre-
determined  benefitting  entity,  revenue  from  the  State  gambling  operator  and  commercial 
operators channelled by the State or through an established mechanism (e.g. Funds), revenue 
from  the  State  gambling  operator  channelled  directly  to  a  benefitting  entity  or  entities  and 
voluntary  channelling  by  some  commercial  operators.  In  a  number  of  the  existing  systems 
legislation or the licence may determine the benefiting benevolent or public interest activity 
and/or the rates (aside from fiscal revenue). A mix of these financing systems also co-exists. 

In the EU contributions stemming from gambling are a source of income for a broad range of 
public interest activities largely identified by the Member State, such as  

•  culture  
•  sport 
•  youth 
• 
tourism 
•  education 

the arts 

• 
•  national heritage   
•  health and welfare  
• 

research,  education  and 
problems related to gambling 

treatment  of 

Therefore,  national  systems  of  financing  are  also  linked  to  Member  States'  ambition  to 
safeguard the revenues for the activities these are distributed to. Whilst the manner in which 
contributions are collected and re-distributed differ, in part this is also a reflection of cultural, 
historical  and  national  traditions.  Reforms  of  gambling  legislation  have  taken  place  in  a 
number  of  Member  States,  namely  to  regulate  online  gambling  which  also  at  times  seek 

233  Conclusions  on 
the  EU  member  states,  3057th 
COMPETITIVENESS (Internal Market, Industry, Research and Space) Council meeting, Brussels, 10 December 
2010 

the  framework  for  gambling  and  betting 

in 

100 

 
 
                                                 
avenues to channel revenue from this type of gambling. These considerations were confirmed 
by the stakeholder participants in the workshop on systems of revenue distribution.  

National lotteries are by and large state-owned or state-controlled in the Member States and 
the contribution systems have been set up with a view to re-distributing to society the revenue 
from this traditional offline activity, for instance lottery tickets. The expansion of the online 
environment for gambling services has given rise to questions on the collection and allocation 
of revenue from these activities, including whether the existing more traditional systems are 
directly transposable  to the online  environment and in  relation to  the  commercial  operators. 
The regulated markets in Europe allow for contributions generated from State-owned or State-
controlled  lotteries,  commercial  operators  as  well  as  charity  and  private  lotteries,  to  the 
benefit of society at large. 

However, the CJEU has expanded on the question of public interest activities benefitting from 
gambling,  that  this  should  not  be  the  real  justification  for  national  restrictions  to  the  free 
movement of services234. The Court has stated that the financing of social activities through 
proceeds from authorised gambling services is only to be an ancillary or incidental result to 
restrictions in light of reasons of public interest. This is without prejudice to the legitimacy, as 
ruled by the Court, of certain monopolies and of State aid rules.  

10.1. 

Societal activities benefitting from revenue derived from gambling 

At  the  same  time,  a  number  of  benefitting  societal  activities  do  rely  on  these  contributions, 
some organisations more extensively than others and there may be scope for national systems 
to explore alternate systems with a view to reducing over reliance on a single or main stream.  
In light of this, the Commission considers that funds lying in unclaimed prizes from gambling 
and  in  dormant  player  accounts  merit  further  consideration  in  the  Member  States. 
Furthermore, there is merit for national systems to seek fair distribution systems so that these 
do  not  inadvertently  benefit  some  benevolent  or  public  interest  activities  over  or  more  than 
others. 

There is also scope for consideration towards ensuring that revenue from gambling to certain 
organisations, for example people with disabilities, does not portray this social group as being 
dependent  on  charity.  This  was  an  intended  aim  of  the  UN  Convention  on  the  Rights  of 
Persons with disabilities which inter alia defines equal rights of persons with disabilities. 

The challenge is to reconcile the revenue generated by Member States from gambling services 
and the systems to allocate funding to support public interest activities with relevant EU rules 
and with recipient activities.  

Examples of revenue derived from gambling from the contributions to the Green Paper   

MS 
Finland 

Distribution 
State budget earmarks % of revenue from gambling: 
sports,  youth  work,  sciences,  arts,  health,  social 

€ +/- 

Year 

234 E.g. Stoß and others. See also Section 04 of this document. 

101 

 
 
 
 
                                                 
Greece 

Italy 

The 
Netherlands 

Norway 

Spain: 
ONCE 

and 

fight 

addiction, 

re-distribution 

causes 
20%  of  total  gambling  revenues  are  redistributed: 
treating 
against 
gambling 
unemployment, disabled persons 
Online  and  offline  tax  revenues  are  directed  to  the 
is  usually 
State  budget 
determined through budget laws 
By  law  50%  of  stakes  of  private  charity  lotteries  is 
for charitable organisations: development aid, human 
rights,  nature  and  environment,  health  and  well-
being,  culture  and  heritage.  Other  lotteries  are  also 
operated 
Earmarked  %  of  revenue  from  gambling  distributed 
by  government  or  by  the  Gaming  Authority:  sports, 
culture, humanitarian or social NGOs  
Spanish National Organisation of the Blind operating 
gambling in order to fund specialised social services 
it  provides  to  blind  and  severely  partially  sighted 
people  and  towards  social  inclusion  of  all  persons 
with disabilities in Spain 

10 billion 

2010

375 million  2010

2009

61%  of  the 
GGR 
re-
distributed  
800 million  p.a. 

The diverse financing systems generate revenue which is of significance to the Member States 
which adopt mechanisms they feel are most suited to channel the revenue from gambling to 
benevolent and public interest activities. A number of good practices exist, in particular where 
the proportions and the beneficiaries are pre-determined. Existing data does not indicate the 
growth in Europe of only one type or types of gambling service or to reduced revenue and, by 
analogy, of reduced contributions to benevolent and public interest activities related to such 
considerations. Gambling revenue data is provided in Section 3. 

Nonetheless, there is scope for financing systems to be as transparent as possible in terms of 
both operators and the beneficial public interest activities, inter alia the distribution as well as 
use of the contributions by recipients. However, any transparency measures should be aligned 
with  responsible  gambling  advertising  so  as  to  avoid  any  potential  misleading  portrayal  of 
gambling to the general public235. 

10.2. 

Sport, including horseracing: a main beneficiary 

In a number of Member States sports is a main beneficiary of revenue derived from gambling. 
A  specific  distributing  Fund  mechanism  for  this  type  of  revenue  is  set  up  only  in  a  few 
Member  States.  From  the  many  and  varied  sport  disciplines,  including  at  grassroots  level, 
football is a main beneficiary through direct or indirect allocation.  

A Study contracted by the Commission looked into the financing systems across the EU. The 
analysis  concluded  that  in  2008  €2.1  billion  was  directed  to  sport  through  the  State  from 
gambling  and  €0.2  billion  reached  sport  directly  from  compulsory  levies236.  Of  this,  €1.1 

235 E.g Zeturf. See also Section 7 of this document 
236 http://ec.europa.eu/internal_market/top_layer/docs/Executive-summary_en.pdf 

102 

 
 
 
 
                                                 
billion is directed to the grassroots level, representing 2.2% of the total budget of grassroots 
sport, 90% of which is channelled through government accounts. Some sports tend to have a 
more  mixed  revenue  stream  than  other  sports,  with  the  effect,  in  particular  at  the  grassroot 
level, some sport may be more reliant on these proceeds to promote their sport, attract young 
athletes,  offer  suitable  facilities  and  organise  competitive  events.  The  Study,  whilst  not 
finding significant regulatory barriers of the structures in place did not identify a single best 
practice funding model for sport, including grassroots sport.  

MS 
Denmark 
Finland 

France 

Italy 

The 
Netherlands 
Slovenia 

revenue 

the  Lottery 

System 
70.18% of profit through a fixed model 
25%  of  gambling 
from 
monopoly 
1.8% levy on lottery monopoly revenue 
1.8% tax on turnover of bets on sports  
Both  directly  to  the 
'Centre  National  pour  le 
Developpement  du  Sport'  to  distribute  across  sport 
federations.  
State 
Committee to distribute across sport federations 
14.1% from lottery revenues  

to  National  Olympic 

allocates 

funds 

80% of the concession fee (fee is 25% of GGR) 

€ +/- 

143 
million 
228 
million 
18 million  

470 
million 
61.5 
million 

Year 
2010 
2010 

2011 
2012 
est 

2009 
/2010 
2009 

Horse and greyhound racing 

Across  jurisdictions  where  this  takes  place,  horse  race  betting  systems  are  generally  set  up 
around  specific  structures  of  financing  on  which  the  industry  largely  relies.  Similar  in  this 
respect  to  the  situation  for  national  lotteries  this  financing  structure  stems  from  national 
traditions, in this case of the equestrian sport, horse breeding and husbandry. The established 
mechanism in the Member States tends to be unique to this sport. In the EU, more than €30 
billion is bet on horseracing every year. Pari-mutuel betting alone totalled €13 billion in the 
EU in 2010, with €1.2 billon of this reinvested in the horse industry and racing. In the Nordic 
countries (Sweden, Finland, Norway), an average of 12-13% of the total turnover is redirected 
into trotting and thoroughbred racing, whilst in France the rate is 8%.  

In Ireland and the UK, grey hound racing also takes place. Ireland has established a fund to 
redistribute  the  betting  duty,  set  at  1%,  both  for  horse  and  for  greyhound  racing.  The  UK 
operates a similar compulsory levy scheme for horse racing.  

MS 
France 

Italy 

The 

System 
PMU  (the  pari  mutual  operator)  funds  80%  of  the 
French  horseracing  sector,  8%  levy  return  to  the 
horseracing by PMU 
+/-  14%  of  revenue  online  and  offline  from  horse 
racing  bets  is  allocated  to  the  National  Union  for  the 
Betterment of Horse Breeds and for 2009 and 2010 an 
additional contribution of €150 million/year 
Revenue  from  the  totalisator  is  received  by  the  horse  1.9 

€ +/- 
727 
million 

Year 
2009 

2009 / 
2010 

2009 

103 

 
 
 
 
 
 
Netherlands  racing authority 
Poland 

Sweden 

UK 

to 

total 

turnover 

By  law  2%  of  total  stakes  of  horse  racing  bets  is 
allocated to the Horse Racing Club  
Swedish  Horse  Racing  Totalisator  (ATG)  directs 
around  13%  of 
trotting  and 
thoroughbred  racing  sport  (70%  returned  winnings, 
11% is State tax, 6% is ATG recovery of costs)  
Statutory  Horserace  Betting  Levy  scheme;  the  rate  is 
set annually through an established system, and varies 
per  type  of  horseracing  bet.  E.g.  1  operator  paid  `£6 
million in 2011 (+/- 10%of gross profits of horseracing 
bets  by  UK  residents).  Veterinary  science  is  also 
funded through the levy scheme. 

million 

180 
million 

2010 

20.35 
million237 

2011 

Following the Communication 'Developing the European Dimension in Sport'238 the Council 
in its Resolution on a European Union Work Plan for Sport for 2011-2014239 set up an Expert 
Group 'Sustainable Financing of Sport'. The Expert Group, to which 21 Member States have 
appointed  experts,  reports 
to  present 
recommendations  on  strengthened  solidarity  mechanisms  by  the  end  of  2012.  Commission 
will assess these recommendations with a view to determining possible future action that may 
be necessary at EU level. Furthermore the Commission will continue the discussions in this 
area  in  light  of  the  economic  dimension  of  sport,  in  particular  sustainable  financing  of 
grassroots sport, which is prioritised as a theme for EU level cooperation in sport.  

the  Council.  The  Expert  Group 

intends 

to 

237 £16.4 million 
238 COM(2011) 12 final 
239http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/educ/122118.pdf 

104