EU Lobbyist Critical of Newly Adopted IMCO Report on Integrity

10 March 2009
The European Parliament on Tuesday adopted a controversial report on the integrity of online gambling, but one European lobbying group said the report is unlikely to lead to any new legislation from Brussels.

The Committee on Internal Market and Consumer Protection, or IMCO, in October 2008 introduced the report, "On the Integrity of Online Gambling," in response to mounting political pressure to tackle issues like fraud, money laundering, underage gambling, misleading advertising and addiction.

In February, the committee voted 32 to 10 to adopt the report, which was drafted by Christel Schaldemose, a Socialist Group member of European Parliament from Denmark, after over 100 amendments had been considered.

Although the report does set out a number of integrity-related calls to action, it states unequivocally that growth in online gambling provides "increased opportunities for corrupt practices" and " . . . is likely to give rise to risks to consumers."

However, a November 2008 report prepared for the committee by Europe Economics, an independent economic consultancy in London, found "limited hard evidence" of gambling operators defrauding consumers.

"We do not say that it does not happen, but there is little evidence in the public domain and prima face it happens on a very small scale," the report said.

Clive Hawkswood, who is chief executive of the United Kingdom's Remote Gambling Association, was critical Tuesday of IMCO's majority decision to keep in tact the language pairing growth in online gambling with growth in opportunities for fraud.

"They don't appear to have paid any attention to the findings of the Europe Economics report," Mr. Hawkswood, whose association lobbies on behalf of online operators like Bet 365, Sportingbet and 888 Holdings, told IGamingNews in an interview.

Although the IMCO report's scope was limited to the integrity of online gambling, it nonetheless highlighted member states' rights to "regulate and control their gambling markets in accordance with their traditions and cultures."

Mr. Hawkswood believes that this language -- which runs according to the principle of subsidiarity under the European Community Treaty -- minimizes the role of the European Commission and European Court of Justice in a debate that's clearly multinational.

Eleven IMCO members in February expressed concern that the report's recommendations -- especially those regarding member states' rights to regulation -- not only exceeded the committee's original mission but undermined key principles of the single European market.

Their dissent was documented in a minority opinion that was affixed to February's IMCO report.

The minority opinion received enough votes in Parliament Tuesday to be kept as part of the main resolution, and was read by Malcolm Harbour, a European People's Party member of European Parliament from the United Kingdom.

"It was never going to get passed, but it puts down a motion that sets out an alternative view that says, as and when the European Parliament or the European Commission comes to a position in the future, they can see that, actually, there were two sides to the story," Mr. Hawkswood said.

That the bill received the broad acceptance of Parliament came as little surprise -- parliamentarians rarely oppose the majority opinion that the respective committees adopt, Mr. Hawkswood said.

He said sports rights-holders lobbied the resolution actively, and expects them to be increasingly involved at the European level after experiencing mixed results at the national level.

Rights holders are currently focusing their rhetoric on the issue of integrity: The more betting opportunities there are, the greater the risk to integrity, so the greater must be contributions from operators to protect it.

"Given that sports have strong support and influence around the place, it's a live issue. So it is one we're having to work hard on," Mr. Hawkswood said.

Looking ahead, he said, "There aren't any next steps -- that's as far as this thing runs.

"But it does send a strong signal that the European Parliament believes that this is an issue that needs to be addressed."

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.