Expansion and Turnover Put the Cross-Border Gambling Debate on Hold in Europe

13 September 2004

An E.U. lawmaker strongly in favor of a pan-European market for gambling services has stepped down from his position as a member of the European Parliament. Freddy Blak, who continuously advocated that Denmark's gambling law is in direct violation of the EU legislation, completed his term Saturday.

After the expansion from 15 to 25 E.U. member states and the increase from 626 to 735 Parliament members (and 4,706 lobbyists accredited to the European Parliament), Blak, the lone crusader, ended his international political career after 15 year.

So no longer from the dug out, but from the stands, Blak is waiting to see what will happen with the formal notice and complaint to the Danish government (sent by the E.U. Director-General of the Internal Market) regarding the legislation on sports betting (Section 10 of the Danish gaming law; the "Pools and Numbers Game Act"). The E.U. notice can be the first step in a infringement procedure.

The DG letter was sent March, 26, 2004, and the Danish government replied in early June. The European Commission hasn't responded.

"We don't know if the commission intends to pursue the matter any further," Peter Sehestedt, head of section of the Danish Ministry of Taxation explained. "Regarding the content of the letter, I am afraid that according to standard procedures it is being classified together with the letter the commission sent. But I am not telling you any secrets if I say that of course the Danish government is of the opinion that the legislation together with the betting monopoly itself is in line with the jurisprudence of the EC court.

"As regards to the marketing--the hot legal issue today in gambling--the Danish government states that professional marketing is the prerequisite of a well functioning monopoly, which in turn is the prerequisite of an effective regulation which intends to provide Danes with modern gambling products without the dynamics of the free market. . . the end result being a much more restrained growth in the market compared with more liberal regimes. Further, the marketing is justified by the impact of the illegal competition on the Internet."

The delay of the DG actions has been caused undoubtedly by the European Union's incoming 25-nation executive body commission, which will commence officially on Nov. 1.

The new Internal Market DG will be Charlie McCreevy of Ireland. McCreevy, a finance minister in the Irish government, and other free marketers, such as former liberal Dutch transport minister Neelie Smitt Kroes (the commissioner for competition policy), will pursue a business-friendly E.U. agenda.

Perhaps that will give Blak some hope.

Didier Dewyn of the European Betting Association (the only fulltime sports betting lobbyist accredited to the European Parliament in Brussels) said the European Parliament in autumn will discuss the Service Directive, which includes text about gambling.

"EBA is currently working for the introduction in this Service Directive of a text that would, one way or the other, open up the monopolistic gambling markets to competition, specifically in the field of cross-border Internet betting," Dewyn explained.

Articles 43 and 49 of the treaty guarantees the E.U Internal Market for services, but barriers to cross-border service provision persist. In a survey published in 2002, the European Commission identified 91 such barriers affecting a wide range of service sectors throughout the business process. The main subjects are "freedom to establish a business in another member state" and "freedom to provide services abroad without being established there."

The European Betting Association's members consist of established and licensed organizations active in major European markets: Expekt, MrBookmaker, Unibet, Intertops, Betandwin, Interwetten, Globet, Betfair, Blue Square, Digibet, Bet365, Wettenleip and Primebet.

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.