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Online gaming and betting: Danish draft legislation needs amending according to the European Commission

Date

08 Oct 2009

Sections

Sports

The European Commission issued a detailed opinion against the Danish proposal to regulate online gaming and betting on 6 October 2009. The draft legislation is intended to regulate both the on - and offline gaming and betting market in Denmark.

Sigrid Ligné, Secretary General of EGBA said: “We support the Danish government’s intention to move towards a regulated opening of the online gaming market, but this has to be done in compliance with EC law requirements. We welcome the European Commission´s continued resolve to ensure that all gaming and betting legislation in the EU complies with the core principles of the EC Treaty.”

The Danish draft law was notified to the European Commission and the other Member States on 7 July 2009. The draft text was made publicly available upon notification but the Danish government later invoked the confidentiality procedure.

According to the EGBA, a number of key provisions are highly doubtful under EC law, including:

the licensing regime fails to take into account securities and controls already offered by other EU jurisdictions, in conflict with jurisprudence of the European Court of Justice;
continued monopoly on inter alia pool betting for horse racing;
introduction of ISP and financial transactions blocking and a marketing ban;
prohibition for non-Danish residents to participate in Danish licensed games.

According to Sigrid Ligné; “EU consumers demand a diverse, safe and secure online gaming and betting offer. More and more Member States are responding to these demands by moving away from their existing system of a gambling monopoly to a licensing system adapted to the Internet. We support the Danish government´s intentions but emphasize the need to ensure that any new legal framework is compliant with the EC Treaty. We would welcome an opportunity to share our expertise and knowledge of other licensing regimes in the EU to ensure an effective regime can be introduced at the earliest opportunity.”

Today’s detailed opinion extends the standstill period until 9 November, during which time Denmark cannot adopt its draft legislation. Denmark is required to reply to the Commission’s views before adopting the legislation. If Denmark adopts the current text without taking into account the Commission’s objections, the Commission can immediately launch infringement proceedings.

- END –

The Notification Procedure

Under Directive 98/34/EC, Member States must notify to the Commission and other Member States draft regulations regarding products and Information Society services such as online gaming and betting, before adopting them. This procedure is aimed at preventing Member States from creating new barriers to the internal market freedoms by giving the opportunity to the Commission and Member States to evaluate the content of a draft law before it is adopted.

The notification of a text to the Commission opens a three month standstill period during which the draft text must not be adopted. This period allows the Commission and Member States to ascertain whether the draft text presents any unjustified barriers to the internal market. The Commission and/or Member States may then issue:

a detailed opinion, if they consider that the draft text would, if implemented, create barriers to trade, services or establishment within the EU;
comments, if they consider that the text raises issues of interpretation or requires further details; or
no response, if they consider that the text is compatible with EU law.
A detailed opinion attempts to prevent Members States from adopting a text, which contains barriers to the internal market, or to urge them to remove the restrictive provisions, thereby avoiding unnecessary legislative work and future EU infringement proceedings.

Once a detailed opinion had been issued, the standstill period, during which the draft text must not be adopted, is extended by one month. If, after this time, the draft text is adopted without modification, the Commission can immediately commence an infringement procedure against the Member State’s newly adopted legislation. On 31 January 2008, the Commission launched an infringement procedure against Germany after it failed to respect the detailed opinion issued against it in March 2007: Link to Commission press release.

To access the TRIS database and search for other draft laws see:

http://ec.europa.eu/enterprise/tris/pisa/app/search/index.cfm?lang=EN

For further information or comment please contact:

Sigrid Ligné: +32 (0) 2 2567527
sigrid.ligne@egba.eu

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