GPWA Times Magazine - Issue 19 - February 2012

By Yehoshua Gurtler, Herzog Fox & Neeman, Israel F rom the onset of the online gambling industry, the Eu- ropean Union has deferred to local interests – often motivated by national protectionism or political values – and refrained from extending to that industry the full range of benefits offered by the European Internal Market. In the ab- sence of a single EU regulatory regime governing online gam- bling, the industry continues to suffer from precisely those mis- fortunes that the European Internal Market was created to avert. Localized legislation often results in access barriers that have no substantive justification. Indeed, the fragmented regulation of on- line gambling has created various practical difficulties for opera- tors committed to conducting a compliant business (for example, varying technical standards often require operators to develop tailored technical platforms for each regulated market, result- ing not only in upfront costs but a serious ongoing develop- ment and maintenance burden). More troubling is the fact that several Member States regulating online gambling have lamentably done so in a manner not entirely con- sistent with the utopian Internal Market ideal of free- moving services, often for purely protectionist reasons (a notable recent example is the new German Inter- StateGamblingTreaty, which, like its predecessor, has already been declared by the European Commission to be incompatible with EU law). Requirements in- cluding maintenance of local server infrastructure, establishment of a local corporation or subsidiary, reliance on local financial institutions, and ring- fencing of player pools are all examples of various restrictions imposed by Member States through lo- cal gambling laws, in flagrant violation of the core principles of EU law. The mosaic-like regulation of online gambling by the various Member States has led to the basic principles of EU law governing commercial activity over the Internet being increasingly sidelined. Thanks for nothing Unless something changes soon, the EU’s online gambling “Green Paper” will be just another missed opportunity for the industry COVER STORY Thanks for nothing