European Lotteries urges EU to remove proposal that hinders states' power over iGaming rules

European Lotteries (EL), the European umbrella organization of national lotteries operating games of chance, is urging the Council of the EU to exclude explicit mention of online gambling and betting services from the Digital Services Act (DSA).

The DSA legislative proposal seeks to amend the rules governing online services enshrined in the Directive 2000/31, the “e-Commerce Directive,” as these rules are now more than 20 years old. The proposal is perceived as a milestone update of how the Internet in the EU will be regulated in the future.

In an open letter, EL asks the EU Member States’ representatives to exclude the mention of the services in the context of freedom of establishment and freedom to provide services within the European Union.

“The applicable national laws should be in compliance with Union law, in particular including the Charter and the Treaty provisions on the freedom of establishment and to provide services within the Union in particular with regard to online gambling and betting services,” cites the organization as the troubling passage.

European Lotteries considers the specific reference to “in particular with regard to online gambling and better services” to “wrongly imply” that national regulations on illegal content in the gambling sector are often not in compliance with the EU law.

“Whereas there are definitely restrictions on the freedom to provide online gambling services in most Member States, these national laws aim to combat crime and fraud and to protect consumers in a manner that meets the requirements as set out in the case-law of the Court of Justice of the EU,” states EL.

According to Arjan van ‘t Veer, EL Secretary General, the explicit mention of online gambling and betting services in that particular context is “misplaced and should therefore be deleted.” He considers that it fails to take into account “all the relevant case-law” of the Court of Justice of the EU and the “very nuanced approach” to the gambling sector due to its peculiar nature.

As the court has confirmed on previous occasions that restrictions in the gambling sector are justified for reasons of public order, security, health and interest, failing to recognize this means “risking increased activities of illegal gambling operators,” which damages individuals and society as a whole.

“EL therefore urges to exclude the explicit mention of online gambling and betting services from the Digital Services Act in the context of freedom of establishment and freedom to provide services,” said van ‘t Veer.

In its original proposal, the European Commission underlined that the DSA would be without prejudice to the e-Commerce Directive and that it builds on the provisions laid down therein. This implies that the exclusion of the gambling activities, as stipulated in the e-Commerce Directive, would continue to apply under the DSA as well, claims EL.

In consequence, the organization finds it now “very unclear” why “online gambling and betting services” would have an explicit mention in recital 29 of the final text of the DSA concerning the application of the free movement principles, “especially when no other sector is mentioned.”

The DSA legislative proposal was introduced by the European Commission in December 2020, and is currently being discussed by the Member States in the Council and by the European Parliament. Both institutions first need to reach their positions on the European Commission’s proposal before negotiations on the final version of the legislative text can commence.

While it was foreseen that both institutions would reach their position by the end of 2021, this now seems unlikely due to disagreements of legislators on certain issues.