Fragmentation in EU Consumer Protection Rules in Gambling Regulation

City, University of London has published a report today which highlights that the regulation of online gambling in Europe substantially diverges between Member States and find that, as a result, consumers of online gambling services are exposed to varying levels of consumer protection.

The study was commissioned by the European Gaming and Betting Association and tasked at reviewing the extent to which the current laws and regulation that govern the provision of online gambling within the EU Member States correspond to the principles set out in the European Commission’s 2014 Recommendation[1] on principles for the protection of consumers and players of online gambling services and for the prevention of minors from gambling online (Recommendation).  Only one Member State (Denmark) was found to have implemented the Recommendation in full.

The report’s findings will come as no surprise to participants in the European online gambling industry.  Even though all national regulations must comply with the fundamental principles of the free movements of goods, establishment and services enshrined in EU law, Member States have made an extensive use of the derogation rights, and have developed their online gambling frameworks incrementally, without necessarily referring to or comparing with legislative measures adopted in other European countries.  The result is that, in Europe, we still have a significant divergence in approaches between Member States, ranging from a complete prohibition, through online monopolies to closed and open licensing regimes.  Even in Member States that permit online gambling under a local licence, the detailed obligations imposed on licensees vary materially from country to country.  The lack of harmonisation creates a significant burden on operators, who struggle to comply with the myriad of (occasionally competing) obligations, which in turn hinders their ability to develop safer gambling products.

The review finds that the primary objective of the Recommendation has not been achieved and recommends that the EU Commission “should re-evaluate its decision to de-prioritise gambling–related matters” and it should “acknowledge that although the Recommendation has contributed to better consumer protection in several EU jurisdictions, it has failed to ensure consistency across all and it did not lead to regulatory convergence.

An executive summary of the study can be found here.

The full study can be found here.

 

[1] Recommendation 2014/478/EU