Possible EC conflict with Belgian online betting law

Belgium ignores European Commission´s warning

The European Gaming and Betting Association, a trade association to which most of the large European online gambling companies belong, has expressed grave concerns about a new gaming and betting law passed by Belgian lawmakers despite criticism last June from the European Commission.

The European Commission already issued a Detailed Opinion against the draft law for violating EC law requirements back in June this year, but this has apparently been disregarded by the Belgians.

Sigrid Ligne, Secretary General of EGBA said: “It is baffling that Belgium does not take into account the opinion of the European Commission that crucial elements of the law are in conflict with EC law requirements. And even more so with a view to the upcoming Belgian presidency of the EU: how can Belgium show leadership in the EU, if it blatantly chooses to ignore the EC Treaty?”

The Belgian draft law was sent to the European Commission and the other Member States on 27 March 2009. It subsequently received a Detailed Opinion of the European Commission because certain aspects are not compatible with the EC Treaty.

A number of Members of the Belgian Senate and Parliament did raise the objections of the European Commission against the law in their discussions, including:

* the requirement for online operators to be established in Belgium;
* the unjustified limitation of the number of available licenses;
* the requirement to have a server located in Belgium;
* criminal sanctions on consumers wishing to play with EU licensed operators

Despite these discussions, the Belgian government did not see the need to change these requirements and a majority in the Parliament voted in favour of the law on 3 December 2009.

"The law is not only highly questionable from a legal point of view," said Ligné. "In the digital age, limiting the provision of online services only to those exploiting a betting shop or casino in Belgium doesn’t fit with reality. A high level of consumer protection can be achieved by specific and targeted legislation, not by protecting the operators with a vested interest in the current situation."

The secretary general said that EGBA will study the law in detail and keeps all options open, including starting legal action as soon as the law comes into effect.

Under Directive 98/34/EC, Member States of the EU such as Belgium must notify the Commission and other Member States of draft regulations regarding products and Information Society services such as online gaming and betting, before adopting them.

This procedure is aimed at preventing Member States from creating new barriers to the internal market freedoms by giving the opportunity to the Commission and Member States to evaluate the content of a draft law before it is adopted.

The notification of a text to the European Commission opens a three month standstill period during which the draft text must not be adopted. This period allows the Commission and Member States to ascertain whether the draft text presents any unjustified barriers to the internal market. The Commission and/or Member States may then issue:

* A detailed opinion, if they consider that the draft text would, if implemented, create barriers to trade, services or establishment within the EU;
* Comments, if they consider that the text raises issues of interpretation or requires further details; or
* No response, if they consider that the text is compatible with EU law.

A detailed opinion attempts to prevent Members States from adopting a text which contains barriers to the internal market, or to urge them to remove the restrictive provisions, thereby avoiding unnecessary legislative work and future EU infringement proceedings.

Once a detailed opinion had been issued, the standstill period, during which the draft text must not be adopted, is extended by one month. If, after this time, the draft text is adopted without modification, the Commission can immediately commence an infringement procedure against the Member State’s newly adopted legislation.

The Belgian issue could prove an early challenge for the new European Commissioner for internal markets, Frenchman Michel Barnier, who is scheduled to take over from present incumbent Charlie McCreevy in February next year. Barnier is at present an unknown quantity, and may not pursue the EU principles as diligently as his predecessor, who was respected as a fair but determined enforcer of the "free movement of goods and services between EU member nations" principle.

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