Anticipating New Opportunities in the European Union

26 June 2007

The Audio Visual Media Services Directive, also known as the revised Television without Frontiers Directive, will enter into force by the end of this year, leaving another couple of years for EU Member States to implement it in their national laws.

Its scope of application clearly opens the door to new opportunities for EU gaming operators lawfully established in a Member State and wishing to offer their services via television.

Indeed, the new directive only excludes real-money games of chance "provided that their main purpose is not that of distributing audiovisual content."

Consequently, not only will live poker tournaments be explicitly authorized but also interactive programs where the viewers will be able to bet or gamble during the show--a horse race, a poker tournament or any other live contest, for example.

The major factor to assess the submission of the gambling program to the new directive will be the proportion of "audiovisual content," in order to exclude from the scope of the directive interactive services--like Web-based or mobile services--in which the audiovisual content is secondary.

Moreover, the core principle of the directive is the application of the "country of origin principle," that is, the submission of providers’ of audiovisual media services to the law of their country of establishment--a founding principle of EU law aimed at facilitating the offer of goods and services across the European Union. (The principle is commonly known as the "mutual recognition principle" or the "internal market clause" in the EU E-Commerce Directive.)

Exceptions of that country of origin will be possible but within very strict limits. For example, the Member State of destination of the disputed program will have to notify to the European Commission (EC) of its intention to block the provision of said program.

Useless to say that the gaming industry must now anticipate the transposition of this crucial directive, especially since the European Court of Justice (ECJ) has limited the possibility of the Member States to take measures that would jeopardize or undermine the purpose of the directive even before its transposition deadline.

Thibault Verbiest is a senior partner with the ULYS law firm, specializing in new technologies and gaming law.