The ostrich effect

For too long, member states have had their heads in the sand over their gambling practices. This ostrich effect is socially and economically detrimental and something needs to be done. As policymakers, we would be neglecting our duty if we were not to question this behaviour and demand that member states take a less blinkered view.

There was an opportunity to tackle these issues in the services directive, but at the request of a large majority of member states, gambling was specifically excluded from the scope of the directive.

This missed opportunity has essentially meant that member states have been able to regulate gambling as they see fit, continuing to restrict cross-border gambling services. But, in doing so, member states are openly violating the key EU principles of freedom of establishment and freedom to provide services, discriminating against legitimate and well-managed sports betting activities.

While restricting access to their markets, EU countries are allowing massive advertising and promotion of their own state-sponsored gambling activities, and investing in online games.

As stacks of infringement proceedings pile up in the European court of justice, the argument that member states are restricting competition to protect citizens from gambling has been comprehensively demolished. Given this context, one has to ask yet again whether it is not time to create a single regulated market for the gambling sector.

The need for European regulation has to be seen in light of what is best for consumer protection. European citizens have already decided that they want to take part in online gambling and other forms of betting activity and we must protect them, rather than limit them.

There has been significant concern that opening the market would lead to consumer detriment, but an open and regulated gambling sector would not necessarily lead to lower consumer protection.

We could impose controls on gambling advertising, regulate or even ban persuasive forms of advertising, such as those on television, and force operators outside the EU to comply with EU rules, or face restriction and prohibition.

Furthermore, the example of the liberated but tightly regulated gambling market in the UK is testament to the fact that there is little link between an open gambling market and an increase in the prevalence of gambling or addiction.

The UK’s national lottery also shows how a competitively won lottery can be both profitable while also contributing significant amounts of revenue to charitable and good causes. Nearly 30 per cent of the UK’s national lottery revenues are channelled into beneficial causes, showing that an open market will not necessarily decrease funding for these areas.

Further still, EU-wide regulation would be economically beneficial. Now that gambling is no longer exclusively conducted within a single member state, and with the fast growth of online gambling services, EU-level regulation would enable member states to gain tax revenues and to impose standards to address problem gambling, underage participants and addiction.

It is clear that the time has come for member states to act in a more strategic way, instead of following a piecemeal and fragmented approach.