Betting: a threat to society or harmless fun?

Date: 15/06/06

The World Cup has thrown the spotlight on an activity that inspires very different reactions from EU governments: gambling.

Permitted behaviour varies widely between countries. In some, betting on the World Cup is considered a threat to the moral fabric of society. In others it is a harmless leisure activity.

"It's going to be a huge event and most people will want to bet with fixed odds," said Clive Hawkswood, chief executive of the London-based Remote Gambling Association. "But, many Europeans don't license that sort of betting facility. Most will have to go on the internet, or to Gibraltar, Ireland or the UK. These are the four cross-border jurisdictions that permit this sort of gambling."

Betting companies applauded the European Commission's decision this year to tackle national legislation that restricts cross-border gambling. World Cup host Germany, Italy, the Netherlands, Sweden, Denmark, Finland and Hungary all face possible legal action at the European Court of Justice if they refuse to lift betting barriers.

Requests for information on legislation were sent by the Commission to all seven countries on 4 April. According to EU spokesperson Oliver Drewes, letters are expected back any time this week as countries have two months from the date of receipt to respond.

"Just by starting these procedures, we put a spotlight on the situation," said Torbj�rn Ihre, spokesperson for the European Betting Association in Brussels. "Hopefully it will have positive effects, even if it's just the beginning."

The prevailing logic in the offending countries is paternalistic. A flutter on national lotteries is one thing, but to open up the borders unreservedly to the evils of smoke-filled betting shops (many of which, to be fair, are rather more salubrious these days) is quite another. Revenue from lotteries can be re-invested in good causes that benefit society. Restrictions on foreign operators include obligatory licences, even for companies already licensed in another member state, and bans on advertising and sponsorship.

In April, Kari Rajam�, the Finnish interior minister, said: "The foundation of the Finnish system has proved itself to be a functioning one. In it one has been able to combine the prevention objectives pertaining to abuses and social hazards with the support of activities for the public good."

Cynics point out that taxation, rather than a philanthropic concern with the public good, is the real reason why governments protect gambling monopolies. Moral fibre is secondary to the fat contributions to national coffers made by national champions such as Finland's Veikkaus, which controls lotteries and variable odds betting. Cross-border competition would mainly be a threat to the cosy relationship that currently exists between governments and national operators.

Aware of the sensitivities surrounding the issue, Internal Market Commissioner Charlie McCreevy said in April that, rather than seeking liberalisation of the betting market, the Commission was merely "seeking reassurance that ...measures member states have in place are fully compatible with existing EU law, or have been brought fully into line".

Ihre said: "Now we will see if there will be a political initiative for a sector-specific directive on gambling." He lamented that gambling and betting groups were excluded from the services directive, approved by EU ministers at the end of last month. "The legislators had a golden opportunity to legislate for the sector. They missed the opportunity. Now we have a separate opportunity to hammer out a new directive on gambling," he said.

In theory, existing law offers substantial rights to the sector. "Under the EU treaty, if you're licensed in one jurisdiction, you should be able to offer the system cross-border," said Hawkswood. To the sector's disappointment, the issue has not been resolved in time for this year's betting frenzy. But, the odds are shortening on the EU-wide gambling market being freed up by the time of the 2010 World Cup in South Africa.

Article takes a look at national regimes on betting and gambling and the European Union's regulatory policy in this field.
Article is part of a European Voice Special Report, 'The EU and Football'.