It’s amazing what a simple change in political administration can do. In a sharp departure from what its predecessor government did when it defended an online gambling law ban to the highest court, the current administration announced yesterday that it will grant licenses for online gaming, including poker. I love the Dutch.
The Netherlands won a thrilling (at least in spurts) 3-2 football contest to advance to the World Cup finals. That should be enough to make many a gambling Dutchman happy. But there’s even more good news. Recently, a Dutch court ruled that poker is a game of skill, not chance. The ruling is limited to a single person who had been arrested back in 2006. But the decision raises hope that its core holding — skill, not chance — will be extended to all poker in Holland. Maybe if the Oranje win the World Cup the legislature will be in such a good move that they’ll expedite the change in law. Amsterdam, football, and poker? Heaven may not be in Iowa after all.
There were high hopes for the French plans to open up its gambling market. Independent businesses would be able to gain licenses that would allow them to offer their online gaming in a regulated, competitive environment. However, in October 2009, the regulation of online gaming in France fell into the hands of out-of-touch politicians concerned only with protecting their interests.
It seems European countries are getting away with so called ‘open’ gambling markets, but actually are causing more restriction, due to a loophole in the European Union’s Free Trade Treaty. This loophole allows member countries to impose some quite severe restrictions under the guise of them being necessary to protect the public from fraud and gambling problems. Portugal recently got away with this in the high profile Bwin case, and now France has decided that it needs to be a nanny to its citizens. As one French blogger, Benjo, wrote, “Les trompettes de l’Apocalyse”, meaning “The trumpets of the Apocalypse”.
The new French legislation dictates that they are opening up their gambling markets, and starting next year some of the big names in online gambling, such as Poker Stars, Full Tilt, Party Poker, and Betfair, should be able to apply for a French licenses. However, Party Poker and Betfair are ineligible because Party Poker is in Gibraltar, a tax haven and companies in tax havens are not allowed. Betfair, on the other hand, allows punters to lay their own bets and since they won’t have personal licenses they aren’t allowed either. Therefore, This opening seems to mean less choice.
Additionally, any company being granted a French gambling license will only be allowed to accept people that reside in France, limiting the playing competition. Politicians justify this by arguing that they could not otherwise control who gambles with French residents, and the residents must be protected. To make it even worse, all online gambling companies that want a French license must close all of their French players accounts when they apply. The application process could take 3-6 months, during which time those players will have nowhere to play. The player can then create an account through the approved French portal for the company. This would mean that the players would be starting from scratch, losing any loyalty points they may have built up with the sites that they currently play. They will also no longer have access to the big weekly, monthly and annual tournaments, such as the Sunday Million, FTOPs and ECOOP. Instead, they will have to play on their ‘safe’ government approved site with less prize money and potential limits on how much they can bet or win.
The “Les trompettes de l’Apocalyse” puts is nicely, saying, “On est en droit de se demander si le mot “ouverture” est celui qui convient quand l’un des points principaux de la loi est le rétrecissement du poker en ligne aux seules frontières françaises. En gros, pour être légal dans l’héxagone, un site ne pourra accepter comme clients que les joueurs résidant sur le territoire français. Dans cette optique, “fermeture” semble être un terme plus approprié, non ?” This loosely translates as: It is debatable whether the word ‘openness’ is appropriate when one of the main points of the law is the restriction of online poker to be played exclusively within France. Basically, to be legal in France, a site can only accept players residing in France. Perhaps ‘closure’ would be a more appropriate term?
If France gets away with this new legislation it is bound to be a huge worry for other European citizens. Germany, The Netherlands and Finland are looking to put gambling legislation in place. If the EU is letting its member states get away with these types of restrictions, other EU countries are sure to follow suit, if it means their politicians can take a piece of the action. The politicians have clearly not listened to what the people want nor have they taken the time to really understand the online gaming industry.
All EU citizens can sign a petition at www.right2bet.com. If enough signatures are gained the EU will be forced to listen.
There is another good article on the recent French legislation here. It is in French, so wipe the dust off your French dictionary.
You can see the full French blog post here by Benjo here.
The EU is, for the most part, supportive of gambling, but is not without conflicting interests. EU laws regarding the freedom of companies to offer their services within members state provide the illusion of inclusion for Internet gaming, as long as the companies have some measures in place to protect the consumer. However, when delving deeper into EU law, the situation becomes much more complex and grey.
It all begins with Article 49 of the EC Treaty, which sets out the freedoms allowed for companies and individuals to provide their goods and services to any country in the EU. Article 49 states, “restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community.” Based on only this, Internet gaming companies should be allowed to offer their services to any country in the EU, so long as they have a base within an EU country.
However, the European Court of Justice has made rulings regarding gambling that appear to go against Article 49. These exceptions generally apply to lotteries and sports betting, but could have an effect on poker. The first instance of the European Court of Justice ruling in favor of state run monopolies occurred in the 1999 Zenatti case. The court ruled that if restrictions were in place on foreign gambling companies in order to protect consumers from fraud, and limit the amount of gambling promotion to protect social policies, then the act of states creating monopolies could not be seen as violating Article 49. However, the argument that restrictions are in place to prevent crime must have its own exception. That is, that the country’s national court must have ruled that betting restrictions are being put in place because they feel foreign gambling companies are not providing consumers enough protection from fraud.
Because individual EU countries are allowed to establish their own laws regarding gambling, Article 49 is less clear. Another more recent example of a EU member state winning a case that goes against Article 49 is Bwin versus Portugal’s state gambling monopoly. On Tuesday, September 8, 2009, the European Court of Justice ruled in favor of Portugal’s state monopoly based on the exception that restrictions were in place to protect bettors from fraud. To confuse matters more, the EU has ruled against Italy’s attempts at protecting their state monopolies, which is now forcing Italy to open up its gaming market to foreign companies.
Since 2006, the European Commission has challenged the laws of a number of EU member states’ gaming restrictions, accusing them of infringements. In 2006, they made inquiries into the restrictions that Demark, Finland, Germany, Hungary, Italy, Austria, France, and the Netherlands were trying to enforce. In 2007, the Commission took action against the restrictions being enforced by Greece, Sweden, France, Hungary, Finland and Denmark. 2008 saw more action by the Commission with challenges against Greece, Sweden, Germany and the Netherlands. All of these proceedings by the Commission stem from Article 49 of the EC Treaty.
The exceptions allowed weaken the EU’s ability to enforce Article 49 of the EC Treaty, and is therefore a worry to Europeans that enjoy playing poker or participating in sports betting online. It seems that individual countries can protect their profits under the guise of preventing crime. With the European online gaming industry predicted to be worth 6.5 billion euros in 2009, their motive is clear. However, that does not make it right. While Internet gaming should be regulated with the genuine intention of protecting consumers, it does not mean that those consumers should not have the freedom to gamble with whom they choose.
