Opinion: Time to harmonise European regulation

Admittedly the penny has not dropped with all EU countries that their people actually like to gamble online, and that it is here to stay. However the UK, Belgium, Italy and Denmark have all produced internet gambling legislation along with 14 countries in Eastern Europe. Soon the Netherlands and one day even Germany will adopt internet gambling.

The offshore centres of Malta, Alderney, Gibraltar and Isle of Man have been licensing and regulating for a long time and have built up a valuable store of knowledge, yet few countries seek their advice.

Many egaming companies are already licensed and regulated offshore. They operate to high standards and their equipment has been tested by the various laboratories that EU member countries now use. So why do operators have to have their equipment tested over and over again when they apply for a new licence by the very same testing labs? The answer is a lack of harmonisation.

This will come as a surprise to most Europeans because the EU is all about harmonisation. There are general standards for cosmetics, childrens’ toys, radio and telecommunications, lifts, rail systems, pressure vessels, packaging – the list is endless. But not egaming.

The cost to operators to comply with standards across all borders is very high and, as the respective governments are now coining it with the various licence fees and taxation, wholly unfair too.

This was picked up by the former EU Commissioner Michel Barnier who actively promoted greater harmonisation of gambling regulation. In October 2014 he issued a report encouraging member states to engage in the sharing of information and best practice to promote greater consistency across the EU. The report recommended certificates of good standing which would enable an operator to bypass certain regulatory requirements so long as they had been approved by another member state. All perfectly sensible.

However the current EU commissioner for gambling Elżbieta Bieńkowska has stated that the EU will not pursue a common gambling legislation framework across the continent. This is perfectly understandable; I just hope they have not thrown the baby out with the bathwater. The requirement is for common standards not of legislation but certain regulation where agreement would be easily reached.

I mention technical standards but there are other inconsistencies across the EU. Player’s funds in the Isle of Man are protected by the operating company by placing those funds in a separate trust bank account, it has worked so far, and I believe it will work in the future. There are many jurisdictions where this is not applied, odd when you think that most jurisdictions create new legislation supposedly to protect the consumer.

Suspicious Transaction Reporting is yet another grey area. Operators have a legal obligation to report however the various crimes units do not want to receive confetti of enquiries and instruct accordingly. However if an operator fails to report and something goes wrong he can face criminal charges, and would have no defence. Very often police and regulators have a different approach. With so many jobs being de-skilled through greater investment in smart software operators we have to rely on people with fewer skills to make a decision.

The internet model worked perfectly well when Europe was one market but that has changed. Operators have to licence in every jurisdiction and to apply different standards for reporting suspicious transactions, different technical standards and the security of player’s funds. Let each country produces its own laws but please let’s harmonise some of the mundane stuff that is so costly to operators.

Governments have a duty of care to do so because operators need some relief from the taxation being imposed upon them.