Inside Asian Gaming

January 2010 | INSIDE ASIAN GAMING 39 Regulation T here are 27 countries (Member States) in the European Union (EU). To some extent EU laws support the right of companies to trade freely within that zone. Specifically, Article 49 of the Treaty on the Functioning of the European Union (TFEU) protects the right of a business lawfully established in one EU country to operate cross border in other EU states. Article 56 of the TFEU further guarantees the right of EU-based businesses to be allowed to offer their services to consumers based in other Member States. However, Member States retain the discretion to introduce rules that limit operators’ rights to provide services to citizens within their national territory if objectively justified (e.g. to protect consumers or prevent fraud). Any restrictions must be applied consistently and Member States cannot restrict citizens’ access to gambling services if, at the same time, they encourage participation in state-owned lotteries or other gambling services. Over recent years, the European Commission has investigated potential breaches of Articles 49 and 56 of the TFEU affecting the gambling sector in ten Member States. As a result of these investigations (and decisions of national courts ruling in many cases that Member States must comply with EU law) there has been progress toward liberalisation of the gambling sector. Nevertheless, some Member States have applied and continue to apply discretionary powers to maintain state monopolies and to restrict the ability of operators licensed within other Member States from offering or advertising gambling services to their national citizens. Different approaches European countries have differing approaches to gambling regulation depending on a wide range of historical, cultural and political factors. The regimes can be broadly categorised as follows: (i) countries with an open regulatory system i.e. where operators that fulfil the relevant conditions can become licensed at any time; (ii) countries that permit a limited number of operators to apply for a local licence; and (iii) countries that only permit the offering of gambling services by national (often state- owned) monopoly providers. Below we provide a summary of the way in which a number of European countries regulate online gambling services: 1. Countries with an ‘open’ regulatory system Malta became the first EU Member State specifically to regulate remote gambling when it introduced the Remote Gaming Regulations in 2004. The Lotteries and Gaming Authority (LGA) is responsible for the governance of all gambling activities. Under the regulations, operators may become licensed: (i) to offer remote gambling of all types of games of chance and games of skill; (ii) to offer remote gambling which involves fixed odds betting, betting exchanges, spread betting and pool betting; (iii) to promote remote gambling from Malta; and (iv) to host and manage remote gambling operators (excluding the licensee). In order to become licensed, operators must pay an application fee and an annual licence fee which differs according to the class of licence. In addition, applicants must demonstrate they are a fit Is there a common basis for regulation in the European Union? Map of EU member nations Since the Gambling Act 2005 came into force, operators have been able to establish online gaming operations in Great Britain, though not many have relocated there