EU Service Directive - Clash between Parliament and Commission

8 February 2006

In a last drive to change the voting on the EU Services Directive, The European Betting Association (EBA) and the Remote Gambling Association (RGA) have called upon the EU Parliament to keep gambling part of the policy. The voting will take place Feb 16, 2006.

"Instead of trying to erect new barriers to the outside, we need comprehensive structural reforms internally that will free our economic energies."
- Charlie McCreevy
European Commission

Inclusion in the service directive would give non-protected gambling operators opportunities under the country-of-origin principle in the way of cross-border market development via the Internet, telephone and interactive television in the EU.

The EBA and the RGA, representing the European remote gambling industry, are strongly committed to the regulation of this sector at the EU level and believe that such an approach is the only responsible way to ensure consumer protection.

"The exclusion of gambling would, therefore, be regrettable, especially as there are no valid arguments for not treating licensed gambling in the same way as any other legitimate service," the organizations said in a joint statement. "Consumer protection issues and the exclusion of criminality can only be addressed through regulation."

Didier Dewyn, secretary general of the EBA, is calling upon European Members of Parliamenet (MEPs) "not to back protectionist gambling models existing in several member states and to maintain the legal status quo of a system, which in most member states is not only in breach with internal market rules but also completely obsolete considering the very nature of this fast growing market."

Clive Hawkswood, chief executive of the RGA, recalls that "members of EBA and RGA are not advocating the abolition of lotteries. Nor does the directive, which specifically mentions that member states are not obliged to abolish existing monopolies such as lotteries or to privatize certain sectors."

He added, "Such directive would also be the best way to improve the legal certainty for governments, consumers and operators. Hence, this approach would put an end to the current situation of legal uncertainty and multiplication of court cases and complaints lodged to the commission by private operators and other associated services (media, sports, charity and tourism)."

For the above-mentioned reasons, Hawkswood is asking MEPs to "reject all amendments aimed at excluding gambling from the scope of the Services Directive and avoid excluding a whole sector on the basis of misguided information."

It is clear, however, that this won't happen under the guidance of the Christian Democrats, and that means Parliament is in flat contradiction with the European Commission and the European ministries. The commission has tried for a long time to implement the basic commercial values of the European Union, which stands for establishing a common single market, free movement of goods, people, services and capital and the European Union's policy of ensuring fair competition between businesses.

"Don't vote against the future."
- Peter Mandelson
European Commission

The basis of the European Economic Community, however, is the establishment of a single market so that (as stated on the EU's Web site) "goods and services move around Europe as freely as within one country, and in 1993, the single market was the EU's greatest achievement; it was also its toughest challenge."

And while key meetings within the fractions of the MEP to halt the developments of a stronger internal market were taking place, two commissioners, Charlie McCreevy, the European Commissioner for Internal Market and Services, and Peter Mandelson, the EU Trade Commissioner, were holding speeches.

McCreevy spoke in Washington on Tuesday of "a framework for the 21st century - the new global regulatory agenda in financial services."

". . . Protectionism is not the answer," he stated. "It never was historically ­ and led to great tension between nations. And it isn't now. A simple correlation of the degree of openness of countries' economic systems with their economic growth and development will show that openness pays. . . . Instead of trying to erect new barriers to the outside, we need comprehensive structural reforms internally that will free our economic energies. (We need) to compete more, to give people freedom and space to innovate and take risks."

In his speech given in the Czech Republic, also on Tuesday, Mandelson defended a policy of economic openness in the European Union, calling for an ambitious defense of the Services Directive and a commitment to facing the commercial challenges of globalization.

While acknowledging that the debate on the Services Directive must meet "legitimate concerns," Mandelson said it must also "lay the foundation for the completion of the single Market in Services."

He issued a warning to those who would block the directive: "Don't vote against the future."

"Next week the European Parliament will vote on the first reading of the Services Directive," Mandelson said. "The commission will at the same time take a view on the European Parliament's amendments and later make a revised legislative proposal. This revised proposal must meet legitimate concerns that are real. But it must also lay a firm foundation for the completion of a single market in services, just as we established in the 1990s a single market in goods."

Reading into these statements, it seems that severe clashes between the Parliament and the Commission are on the horizon. This game is not over yet!

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.