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Protectionism in Gambling Isn't Just a U.S. Issue...By Hartley Henderson

When Americans discuss gambling, the assumption is that things are different in other countries. Some posters at MajorWager have even suggested they may move overseas or to Canada for the ability to bet without the impediments placed on them in the U.S. It was thus somewhat surprising to learn of a site in Europe called The site is a consumer's advocacy group that is petitioning governments in Europe, as well as the European Union courts, to tear down walls in relation to gambling and give the consumers a right to choose where and how they will gamble with their own hard earned money without government interference. The mission of the site as posted on their website is as follows:

Right2bet's mission is to ensure that the principles of economic freedom in the European Union are applied as fairly to betting and gaming as they are to any other sector. Ultimately, we want all EU citizens to be able to bet with whichever EU-licensed betting company they wish, regardless of in which member state that company is based.

The group currently has just under 10,000 supporters, but eventually it hopes to be on the same scale as the Poker Player's Alliance in the U.S., and to be the first group to send a petition of 1 million signatures to the EU demanding that players be given the right to bet anywhere without impunity.

Mike Robb, a spokesperson for, gave the following explanation as to the protectionist situation in Europe and the purpose of his organization:

Europe has indeed got issues with protectionism. It is even more complex than the situation in the United States, where the focus is on the UIGEA. In the European Union individual member states are pursuing different policies when it comes to gambling, some are liberal whereas some are not, and unfortunately there are more examples of the latter.

The main argument here is that most countries in Europe offer online gambling services, but in many cases only though a state-run monopoly. What we, right2bet, argue is that this is against European Union law. If a country wants to ban gambling outright - and that means all forms of gambling, including state-owned operations - then that is one thing. However, to allow citizens to bet on sports, poker, casino, etc, with a monopoly, but not to allow free and fair competition with private operators that are legally licensed in the EU is not acceptable, and not legal.

It is like the French, as an example, saying that their citizens are allowed to drive cars, but only Renaults and no other model, even if they are produced by an auto company based and licensed in the EU. That is an absurd suggestion and certainly one that would never be allowed by the EU authorities in Brussels.

The countries that right2bet is focusing on at present are Germany, Sweden, Finland, The Netherlands and France. All of these countries are pursuing protectionist policies that are only to the detriment of consumers in those countries. We believe in the rights of consumers to choose and the campaign is determined to show policy-makers that EU consumers care about this issue and want something to be done. We want to gain one million signatures to our petition ( so that we can take it to the politicians and make them take note.

Of all the countries in the EU, the one causing the biggest stir is France. France recently passed legislation to tax online gambling for French citizens at 8.5% and also set limits on the amounts that gambling sites can pay back to winners. This was devised after France's failed attempt to ban all advertising on gambling in France with the exception of the state run gambling monopoly. France tried to stop advertising from sites like Betfair or Bwin in France, hoping that if French citizens couldn't see ads for those sites, then they wouldn't know about them and would play with the French gambling monopoly exclusively. But the EU courts ruled that gambling was a service under the EU's articles to Freedom of Establishment and Freedom to Provide Services, and under the treaty a member state must allow other European Union member states the same right to provide online gaming services as the member country allows its owned state-owned monopolies. France planned to appeal, but eventually backed down and now has devised a new plan to dissuade betting at online sites and scare off gambling companies from competing in France. It plans on imposing heavy taxes on its citizens for amounts won and limiting the amount companies can pay back to bettors to 85% of gross profits. Naturally, at this rate the sites would be uncompetitive, which would effectively make them useless and maintain Framce's state-run gambling monopoly. France is also suggesting that a percentage of sports gambling revenues should be given to sports teams to help preserve the integrity of the games.

Spain and Italy were also anxiously trying to keep out foreign entities from competing with their state-run monopolies, but when they realized they couldn't win in EU courts they decided to open the markets. The Italian market was given access to foreign sites recently, and Spain has announced that companies like William Hill and Bwin may move into the lucrative Spanish market in 2010. Both countries did so reluctantly, however, and the first inclination was to simply put up roadblocks the same way the United States has.

Ironically, to those who have followed the U.S. situation, the main reasons provided for their anti-online gambling stance is no different than those given in the United States. Underage gambling, problem gambling, fear of corruption and money laundering are all excuses used to try and argue against allowing unfettered online gambling within the EU, but at the same time those same countries have the audacity to suggest that state sponsored gambling avoids these issues, despite studies which showed the arguments aren't truthful. In fact, France actually had the gall to suggest that the 85% return on gross revenue was necessary to help prevent problem gambling, because giving bettors a fair return on their bets only entices them to bet more and become problem gamblers. Apparently a higher return in the state monopoly doesn't carry those same concerns.

In fact, the EU even has their share of "Jon Kyls" and "Robert Goodlattes". Christel Schaldemose, an MEP from Denmark was commissioned by the EU to do a study of online gambling in Europe. Like Kyl, instead of weighing all the pros and cons and providing proof, she simply gave the opinion that non state-run gambling was open to issues like corruption and money laundering and ignored any benefits in her report. On the other hand, she seemed to suggest that state-run gambling monopolies were beneficial to all (no different than U.S. states have suggested with their lotteries). Consequently, she made several recommendations that put up impediments to private gambling operators, including payment options. Many EU gambling operators were quick to point out that her report was biased and didn't differentiate between unregulated gambling operations and companies that were operating under the UK regulated system, which are many of the same arguments that have been made by Antigua regarding the U.S. situation. It appears most in the EU, however, are prepared to accept her suggestions "as is" and really don't want the discussion. Schalmdemose defended her report, stating: "this is a common sense action to protect vulnerable people".

Furthermore, many in the EU have put forth the idea of a single EU market for online gambling. But Eija-Riitta Korhola, a Finnish MEP, was quick to shoot it down, arguing that gambling isn't a normal commodity and is open to corruption, money laundering, underage gambling and problem gambling - all the same issues that have been brought up in the U.S. Ironically, Schalmerdose is socialist and Korhola is viewed as extremely left wing. This is quite the contrast to Jon Kyl, Bill Frist and Robert Goodlatte, who are all very right wing. Politics certainly makes strange bedfellows.

The EU of course is different from the United States in that all countries that are part of the EU agree to a set of rules and the EU courts have the final say. Any cross border disputes are settled at the EU courts and not by individual countries. It's somewhat similar to the NAFTA free trade agreements in North America, although the EU seems to have more power in enforcing the rules. In Europe remote gambling is not illegal and a "morals" clause can not be used to curtail it, as the United States has tried to do with the WTO issue. However, the EU seems to be refusing to adhere to its own rules. Consequently, started a campaign to solicit signatures on a petition. According to the Lisbon Treaty, if the EU Commissioner is presented with a petition of a million signatures the Commissioner has no choice but to hear the complaints and address the issue.

I spoke with Clive Hawkswood of the Remote Gambling Association (RGA), an organization aimed at preserving the rights of European Gambling operators and he applauded right2bet's mission.

"Consumers are nearly always the one group that gets forgotten in the debates about online gambling. In Europe the hope is that initiatives like right2bet will give them the voice they have so far been lacking. Giving the gambling consumer value for money is a concept that rarely, if ever, occurs to politicians...and an obvious recent example of this is the plan in France to cap return rates to players. Measures like this remove one of the largest competitive elements from the market. In every other industry competition is seen as a 'good thing' for consumers, so why should ours be treated differently?"

The one argument in the EU that was mentioned several times by all the gambling naysayers was the fear of money laundering. Consequently, the RGA commissioned a study to look at the realities of money laundering with online gambling and either confirm the risks or dispel the notion. The findings were released in July of this year and showed there was no increased risk of money laundering from online gambling than from any other business.

Hawkswood described the findings more clearly:

The findings, in a nutshell, were that all businesses of whatever kind were at risk from money laundering, but that the licensed EU online gaming industry was relatively safe, comparing well to other e-commerce businesses and bricks and mortar gambling. The main reasons for this were the cashless nature of online gambling, that in the EU it is subject to statutory gambling and money laundering regulations, and because the companies had developed good processes to combat fraud (KYC checks, etc) and these helped them to comply readily with the regulations. In other words, the safeguards were built in to the business models instead of being added as a bolt on at a later date. There was no evidence of online companies themselves laundering money, but there was a well publicised case of London based Al Qaeda gambling online. The crucial point here is that they were money laundering just about everywhere (banks, retail etc), and so gambling was not singled out as an easy option and we worked with law enforcement to deal with the problem. The bottom line is that any objective and independent study can only conclude that there is no reason why online gambling should be more of a threat than any other commercial activity. Of course the industry can never be complacent, but this is exactly why we have regulation. If it works for banks, then why not for us? And the answer is that it does.

Of course when findings like these have been presented to the U.S. governments in the past they have fallen on deaf ears and the USTR has time and time again turned down invitations by other countries like the UK and Antigua to discuss online gambling regulation, and concerns such as problem and underage gambling and money laundering. But while these arguments are always thrown out to the public by the anti-gambling crusaders to try and win favour with the uninformed, everyone in the industry knows full well that the true purpose of anti-gambling laws of any kind are for protectionist and prejudicial reasons. If the concerns were real the governments would get out of the gambling business themselves and would declare their states or countries gambling free zones. is an important gambling advocacy group, and like the Poker Player's Alliance and iMEGA, need to have its voice heard. Gambling is under attack worldwide, and these groups are necessary to let politicians, courts and the non-gambling public know that gamblers are voters and have rights like anyone else in society.

Hartley Henderson

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