Gambling Left out of EU Services Directive

19 April 2005

Evelyn Gebhardt, the German Socialist rapporteur for the Services Directive (SD) and a member of IMCO (European Parliament committee for the Internal Market and Consumer Protection), today proposed the amendments to the commission's Services Directive Commission in the European Parliament. The report confirms that gambling will be excluded from the SD--a huge setback for cross-border gambling worldwide.

Gebhardt dropped the most controversial element, the so-called "country-of-origin" principle, which would have allowed service providers to sell services in all member states providing they comply with legislation in their country of origin.

Tjeerd Veenstra, the general delegate of the E.U. representation of European Lotteries in Brussels, applauds the move.

"I am very glad that the Rapporteur MEP Mrs. Gebhardt in the first part of her draft report has excluded the gambling services from the proposed Services Directive, Veenstra said. "She also explained yesterday in the European Parliament what the reasons are. She mentioned that in many member states there is already a severe and restrictive law on gambling. It is also known that the benefits of the lottery activities are used for social purposes. Her opinion is that you can not completely liberalize the market without bringing this (social) system in danger. The EP (European Parliament) has to take that into account.

Veenstra said Gebhardt's message is in line with the policy of European Lotteries, but added that that the process is not finished.

We have to wait until the full report has been published, and are looking forward to the debate in the European Parliament," he said. "The conclusions in the first reading are scheduled somewhere in late autumn. So, it is too early yet to come to final conclusions. But I can not deny that I have positive feelings about the ultimate outcome."

Conversely, the exclusion of gambling from the SD is a blow to cross-border gambling interests, but Torbjörn Ihre, who oversees external affairs for the European Betting Association, pointed out that nothing has been finalized.

"There is still a number of steps on the way to the full acceptance of amendments by the European Parliament," Ihre said. "But needless to say, this exclusion of gambling makes our lobbying job more difficult. We will have to analyze the arguments for the exclusion before we can make any assessments. The EP will have its first reading of its proposal for amendments in October."

Guenter Verheugen, the European Union's industry commissioner, advised E.U. lawmakers not to hinder the service sector, which is already in an economic slump. The "country-of-origin principle" in the proposal was for many countries, including Germany and France, one step over the border.

Verheugen added, however, "We cannot have an internal market if we don't have mutual recognition."

Even an amended version of the controversial Services Directive, which aims to liberalize trade in services between the 25 member states, would not enter into force before 2010.

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.