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Impact of online gambling on the EU gambling market

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Since the emergence of the internet in the 1990s, an increasing number of gambling services have come available on-line or through other new remote communications technologies. The rapid technological advancements, commercial initiatives, and market penetration of such commerce have made this sector of the gambling services industries extremely dynamic and potentially transformative in the years ahead.

It seems highly likely that before consensus is reached among the Member States of the EU (or through the European Court) about how best to deal with traditional (land based) commercial gambling opportunities, and how they can best be managed with respect to restrictions, regulations and tax policies in manners consistent with protecting and promoting the public interest, the gambling services market in Europe and globally will have been transformed by the ongoing expansion and evolution of remote gambling via the technologies of internet, mobile phones and interactive television.

The internet and other media are making it possible for Europeans to gamble in their homes, offices, or other venues of choice at any time on virtually any the forms of gambling available in land-based venues, as well as on some new forms, such as betting exchanges, tournaments, spread betting and poker, which are not so readily available in conventional venues.

In light of legal and political developments in other regions around the globe—especially in North America—it is quite possible that much of the world’s e-gambling business will in fact be based in European jurisdictions. Malta and the UK already have laws permitting and regulating e-gambling on their statute books, and Gibraltar—which is, for the purposes of gambling regulation, an EU jurisdiction—hosts a number of e-gambling companies which account for a large share of the world’s e-gambling market, much of it consisting of egambling services delivered to customers resident outside the EU.

It is essential therefore, in considering the likely economic impacts of removing barriers to an internal market in gambling, to consider the likely effects of remote gambling on the overall EU gambling market. This is a difficult forecast to make, partly because much depends on how the EU collectively responds to the issue of whether and how to regulate remote gambling, partly because other jurisdictions such as the USA are likely to take decisions which will affect European markets, and partly because the future market for this form of ecommerce will be dependent on both technological and legal developments which are quite difficult to anticipate.

It is therefore useful to try to identify key determinants and to discern trends when trying to construct a plausible scenario about how remote gambling might affect the traditional markets for gambling services in the EU. An additional challenge that must be addressed in this endeavor is that because remote gaming is such a new phenomenon, the availability of published peer-reviewed research covering the topic is still quite limited.1

1 See, for example, Watson, Stevie, Pearson Liddell Jr., Robert S. Moore, and William D. Eshee Jr., “The Legalization of Internet Gambling: A Consumer Protection Perspective,” Journal of Public Policy & Marketing, Vol. 23, No. 2, Fall 2004; and Eadington, William R., “The Future of Online Gambling in the United States and Elsewhere,” Journal of Public Policy & Marketing, Vol. 23, No. 2, Fall 2004.

Credit © European Union

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