EL to EC: 'Do Not Deregulate'

22 March 2005

The European Lotteries (EL) on Sunday held a high-level conference in Brussels focusing on the impact of the European Commission's forthcoming Directive on Services in the internal market. Members of the EL, the IOC, the Deutsche Sportstiftung (German Sports Foundation), European Foundation Center, U.K. National Lottery Commission and UNI Europe (European Unions in the service industry) attended.

The E.U. single market relies chiefly on competition and regulatory authorities to maintain a level playing field for the free movement of goods and services, and the EL is trying to prevent this from happening in the gaming space.

According to Hans-J├╝rgen Reissiger, president of the European Lotteries and a board member for the German Class Lottery in Berlin, the reforms proposed by the Services Directive will lead to a dangerous deregulation of the European gambling sector.

The EL is against this liberalization based on the belief that it would increase the levels of problem gambling, crime and fraud and would result in an overheating of the market in Europe.

The group, which represents the state lotteries and toto companies in Europe, favors the current exclusive rights model because this gives, according to its press information, "the best guarantees for a restrictive gaming policy and provides for a better control of the market."

The E.U. Commission, at the moment, is reorienting on this directive dossier. Furthermore, the E.U. Parliament has indicated that it needs more time to come to a balanced decision.

The EL urges the European institutions to take account of the dangers of liberalization in the gambling sector and to amend the commission's proposal.

During the conference, the EL confirmed once again that there are--more than ever before--very good reasons to grant gambling services a special status in relation to the European single market.

Dutch De Lotto's Tjeerd Veenstra, general delegate in the EU Representation of European Lotteries in Brussels, said this special status has nothing to do with so-called old fashioned protectionism. Contrarily, he said, gambling must be removed from the scope of the Services Directive for reasons of public order and because of the difficulties that the inclusion of gambling would present for the adoption of social policy measures aimed at protecting consumers from the harmful effects of gambling.

Veenstra, the architect of a movement blocking foreign I-betting companies from offering their services in the Netherlands, adds willingly what the "very good reasons" are for a "special status."

"The present system with national responsibilities for national policies, and based on well known principles, is the best guarantee for controlled and legalized gaming surrounding," Veenstra stated. "Gaming is not a normal economic activity and therefore it does not fit in a free market approach."

"And above that, it is a fact that for decennials it is accepted that the revenues do not vanish in the pockets of private companies, but they flow back to the society in the form of financial support for social causes, such as sports, culture, welfare work, research, nature and environment, etc., etc.

"Of course those good causes are not a justification in itself, but is still a part of the system which is in place for decades. That is why this system should stay the way it is. Why would Europe block this good-causes system? Should we leave everything, because the bookmakers want that? Would that make a better Europe?"

Veenstra added, "Last year, the member organizations of European Lotteries gave, for example, more than 2 billion euro to sports. This funding to sports and other good causes is at risk if the plans of the European Commission are not changed."

When asked whether there were indications that the dossier of the Directive on Services goes in the wrong direction (and that is why this conference took place in Brussels), Veenstra replied, "There is no reason for at all. We have those strategic conferences more often. We feel that we have a comfortable majority within the EU member states, who are willing to exclude the e-gambling services."

Rob van der Gaast has a background in sports journalism. He worked for over seven years as the head of sports for Dutch National Radio and has developed new concepts for the TV and the gambling industry. Now he operates from Istanbul as an independent gambling research analyst. He specializes in European gambling matters and in privatizations of gambling operators. Rob has contributed to IGN since Jul 09, 2001.