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European Union: Commission Considers Possible Regulation of Online Gambling

(Sept. 19, 2011) On September 7, 2011, following the publication of a green paper and a public consultation, the European Commission announced that it intends to draft a communication on a proposal regulating online gambling. It is anticipated that the proposal will be in the form of a directive that will establish minimum standards concerning this issue. The Commission was prompted to take action because of the disparity in existing legal regimes for online gambling among the European Union (EU) Members and also because of the growing number of judgments delivered by the European Court of Justice (ECJ) on the subject. (Andrew Williams, Commission Eyes EU Regulation of Online Gambling, EURACTIV (Sept. 7, 2011).)

In the absence of regulation of online gambling at the EU level, EU Members have adopted their own rules to fight corruption, fraud, money laundering, and other illegal activities generated by gambling. Consequently, in some EU countries, online gambling is completely unrestricted and available, while in others, such as Sweden, it is prohibited. In June 2010, the ECJ held that EU Members have the right to completely prohibit online gambling, if they wish to do so to combat fraud. (Id.)

The gambling industry, in principle, does not oppose regulation at the EU level, but spokesmen have voiced their concerns about the effectiveness of such an action. Malcolm Bruce, a representative of Belfair, one of the world's biggest online gambling companies, expressed the sentiments of the industry by stating “[w]e welcome strong regulation and would like to see it across Europe. But it will be hard to find regulators that are competent enough to regulate the online gambling market.” (Id.)