Gambling services are not regulated by sector-specific regulation at EU level. Nevertheless gambling services are subject to a number of EU acts. In other cases gambling services have been explicitly excluded from the scope of EU law.
The regulatory situation at national level shows a very diverse picture across the EU. Member States have regulated online gambling services in very different ways,: by banning them, by establishing a monopoly for the offering of online gambling services or by issuing licences for the operation of these services. Few Member States do not have any rules at all covering this service activity.
In addition to benefiting from horizontal rules such as those pertaining to Intellectual Property Rights (IPR) protection, the following texts are relevant to online gambling: the Audiovisual Media Services Directive, the Unfair Commercial Practices Directive, the Distance Selling Directive, the Directive on Consumer Rights, the Anti-Money Laundering Directive, the Data Protection Directive, the Directive on privacy and electronic communication, the e-commerce Directive and the Directive on the common system of value added tax.
The Audiovisual Media Services Directive (AVMSD) (Directive 2010/13/EU) aims at coordinating certain provisions laid down by law, regulation or administrative action in the Member States concerning the provision of audiovisual media services. Gambling offers, where any audiovisual content is merely incidental to the service and not its principal purpose, are not considered AVMS.
The Unfair Commercial Practices Directive (UCPD) (Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market) aims at protecting consumers from unfair practices which are likely to induce a transactional decision which they would otherwise not have taken. Common rules and principles provide consumers with protection against unfair practices whether they are buying from their corner shop or purchasing from a website based abroad. Businesses can advertise and market to all consumers in the EU, in the same way as to their domestic customers. Although the UCPD is without prejudice to authorisation regimes such as the rules related to gambling activities, advertising and marketing practices fall within its scope. As a consequence, gambling advertising falls foul of the Directive if it is contrary to the requirements of professional diligence and if it is distorting the economic behaviour of the average customer or a clearly identifiable group with an underlying vulnerability, e.g. minors, where the gambling provider can reasonably expect such a distortion. The UCPD bans in particular misleading and aggressive commercial practices.
The Unfair Contract Terms Directive (Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts) aims to protect European consumers against unfair terms in the contracts they conclude with professionals. It introduces a notion of “good faith” in order to prevent significant imbalances in the rights and obligations of consumers on the one hand and sellers and suppliers on the other hand. This general requirement is supplemented by a list of examples of terms that may be regarded as unfair. Terms that are found unfair under the Directive are not binding for consumers. The Directive also requires contract terms to be drafted in plain and intelligible language and states that ambiguities will be interpreted in favour of consumers.
The Distance Selling Directive (Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts) applies to most contracts where a consumer and a supplier running an organised distance-selling scheme do not meet face-to-face at any stage until after the contract has been concluded. “Distance communication” includes traditional means of distance communication but also covers more technologically advanced means of distance communication such as teleshopping, mobile phone commerce (m-commerce), and the use of the internet (e-commerce). The Directive provides a number of rights for consumers in order to ensure consumer protection throughout the EU, including provision of comprehensive information before the purchase, right of withdrawal, protection from unsolicited selling and protection from fraudulent use of payment cards. Article 6(3) however excludes the right of withdrawal for contracts for gaming and lottery services, unless the parties have agreed otherwise. The Directive will be repealed once the rules of the Directive on Consumer Rights will have to be applied in all Member States, i.e. by 13 June 2014. The Directive on Consumer Rights incorporates the provisions of the Distance Selling Directive.
The Directive on Consumer Rights (Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights) aims at achieving a real business-to-consumer (B2C) internal market, striking the right balance between a high level of consumer protection and the competitiveness of enterprises. The Directive contains requirements on the information to be provided by traders prior to the conclusion of all consumer contracts, provides for specific information requirements and regulates the right of withdrawal distance and off-premises contracts and for rules on delivery and passing of risk applicable to contracts for the sale of goods as well as certain rules applicable to all types of consumer contracts. These include rules on the costs for the use of means of payment (e.g. credit or debit cards), on telephone hotlines operated by traders as well as on additional payments and pre-ticked boxes. In comparison with the Distance Selling Directive, the Directive on Consumer Rights however does not apply anymore to contracts for gambling (Article 3(3), sub (c)).
The Anti-Money Laundering Directive (AMLD) (Directive 2005/60/EC) requires certain institutions and businesses to apply a series of preventive measures with a view to prevent money laundering and terrorist financing. For the gambling sector the AMLD explicitly covers casinos. Member States can however extend the rules to other categories of undertakings with a particular risk to be used for money laundering and terrorist financing purposes. Those subject to the Directive are obliged to:
– verify the identity of their customer and to monitor their business relationship with the customer (casino customers must be identified and their identity verified if they purchase or exchange gambling chips with a value of EUR 2000 or more),
– report suspicions of money laundering or terrorist financing to the public authorities; and
– take supporting measures, such as ensuring a proper training of personnel and the establishment of appropriate internal preventive policies and procedures.
Competent authorities should ensure that the persons who effectively direct or will direct the business of such entities and the owners of such entities are fit and proper persons. It furthermore imposes enhanced due diligence procedures in certain situations which carry higher risks of money laundering, e.g. where the customer has not presented himself physically.
The Data Protection Directive (Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data. On 25 January 2012 the Commission has proposed a data protection reform package, including a Proposal for a Regulation of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation) which will replace Directive 95/46/EC) and the Directive on privacy and electronic communication (Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications)) provide for the legal data protection legal framework in the EU. The Data Protection Directive sets out the general framework for the protection of individuals with regard to the processing of personal data and the free movement of such data while the Directive on privacy and electronic communication contains specific rules on processing of personal data and the protection of privacy in the electronic communications sectors, and regulates areas such as confidentiality, billing and traffic data, rules on spam/unsolicited commercial communications, cookies, etc. For gambling services these rules not only cover static data such as contact or financial information but also behavioural data, like gambling frequency and pattern or the stake.
The E-Commerce Directive (Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) Article 135(i) of the Directive on the common system of value added tax (Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax) exempts betting, lotteries and other forms of gambling, subject to the conditions and limitations laid down by each Member State, from the common system of value added tax. This however means that, in practice, a margin of discretion is available to Member States and in practice, not all forms of winnings from gambling are exempt in all Member States. In some cases, the tax exemption extends only to a limited number of forms of gambling (typically lotteries and some forms of betting) and in practice it may not specifically cover all forms of online gambling.) sets up an Internal Market framework for electronic commerce. It establishes harmonised rules on issues such as the transparency and information requirements for online service providers, commercial communications, electronic contracts and limitations of liability of intermediary service providers. While Article 1(5)(d) excludes gambling activities which involve wagering a stake with monetary value in games of chance, including lotteries and betting transactions from the scope of the directive the liability regime for information society service providers hosting or transmitting illegal content, Articles 12 to 15 of the Directive, also applies to gambling-related content.