2 3 March 2003

News:

Ladbrokes have made clear their determination to fight all the way to the European Court of Justice the recent Dutch court decision ordering them to block access to their site to Dutch citizens.

The European Commission is to report in July this year on an action plan to dismantle the remaining competition barriers within the Services Sector.

Sportingbet Plc is relaxed about a flurry of activity by Taiwan’s Criminal Investigation Bureau which has included raids by Bureau officials on the offices of its Taiwanese content supplier 101 Sports and its promotions company, SBC Advertising and Promotions.

Features:

Dutch monopoly operator De Lotto has won a case in the local Dutch court in Arnhem forcing Ladbrokes to restrict internet access to sports and lottery wagering from Dutch residents. John O’Reilly, Managing Director of Ladbrokes eGaming and Telephone Betting, highlights that Ladbrokes intends to have the issue raised in the case referred to the European Court of Justice, whilst at the same time raising the profile of the need for, and benefit of, a single market for betting and gaming in Europe.

The Leach Bill is designed to put online gambling operations out of business through blocking payments to and from the sites. This article, the first of two on the potential impact of the Bill, argues that the unintended consequence of this Bill will be to encourage the development of alternative payment systems that will facilitate and encourage online gambling. A second article will examine its impact on money laundering.

Within the last few years we have seen a substantial increase in the amount of gambling opportunities offered on the internet. There is no doubt that this market will grow further over the next few years, increasing gambling opportunities for the customer and possibly attracting new customers to this industry. The dilemma for this new market is how to ensure the future of internet gambling is regulated, controlled and socially responsible.

One of the ground principles of the Electronic Commerce Directive is contained in article 3, the internal market clause1. Similar to the principle laid down in article 49 of the Treaty of Rome, i.e. the freedom to provide services throughout the European Union, information society services may not be subject to another control than the one exercised by the competent authorities of the country of origin.

By virtue of article 1.5 of this Directive, games “which involve wagering a stake with monetary value in games of chance, including lotteries, betting transactions and gaming activities are excluded” from the Directive’s coordinated field.

The only reasonable explanation for the exclusion may be found in the jurisprudence of the European Court of Justice2 and the intention of the Member States to maintain a tight control over gaming operations, i.e. to impose a restrictive gaming policy.

In the first part of this article, we will comment on the current status of the cross-border provision of online gaming services in the European Union. Thereafter and in light of the development of the information society, arguments will be brought forward to extend the coordinated field of the Electronic Commerce Directive towards online gaming services.

What are the regulatory and commercial considerations to be aware of when looking at opportunities in the wireless gambling field?

Regulation of online gambling sites poses opportunities and challenges that are different to those of bricks and mortar operations. Understanding how online sites operate is crucial to developing effective and powerful regulation. This, the first of two articles on the technical aspects of enforcement, looks at the fundamental aspects of online regulation.