Regulatory Developments
The European Union
In Europe, the market continues to move slowly towards a liberalisation of supply.
Member States are subject to scrutiny from The European Commission (the “Commission”) and, as “guardian” of the EC Treaty, it closely monitors existing and developing legislation in the EU. The principal method by which the Commission has applied pressure on Member States is through the use of ‘infringement proceedings’ against states in contravention of EC law. Through such proceedings, the Commission has asked a number of States to explain or even amend their laws restricting the free movement of gambling services. If Member States fail to comply, they will potentially be subject to legal action from the Commission. However, such a process is extremely slow, and while it undoubtedly exerts pressure on Member States, they have thus far been given lengthy periods in which to comply. It is over two years since the first infringement proceedings in the gambling sector were commenced, and the Commission has yet to take any Member State to court, despite ongoing non-compliance. Hungary, for example, was issued a Reasoned Opinion from the Commission in March 2007, giving it three months to amend its laws or face court action from the Commission.It has yet to implement revised laws, but has to date not faced any Court action for its failure to do so.
However, the ongoing pressure from the Commission, and in some cases national court decisions declaring domestic legislation to be incompatible with EU law, has led to a domestic review of prohibitive legislation in a number of jurisdictions, including France, Italy and Sweden.
While Member States have a growing appreciation of the reality that they may be required to liberalise their markets, the precise extent to which they will in fact do this remains to be seen. For example, on the one hand, the UK model entirely respects the principle whereby any operator licensed within the EEA (or in a whitelisted jurisdiction), is able to target the local market. Conversely, the Italian model permits EU-based operators to service the jurisdiction, but insists upon a specific Italian licence.