Turmoil on gambling markets as private industry challenges monopolies

That was one of the main conclusions at the conference ”The big nordic gambling war” held in Copenhagen this week.

Jan Francke who chaired the Swedish government’s commission on gambling believes that in the longer term it is impossible to stop online gambling and therefore the Swedish government should consider a licensing system which would allow foreign gambling service providers to operate in Sweden under certain regulations and after paying a license fee.

Such a solution is on the way in Italy whose new government has made a complete turn-around and is on the point of introducing an open licensing system for online gambling providers. 

According to Martin Sychold who is preparing a report on the European gambling market for the EU Commission, Italy is one of the latest examples of how the whole gambling area experiences fundamental changes and individual countries choose very different strategies.

In Germany for instance the German Oddset has stopped an aggressive advertising campaign after a decision by a German court, and several of the federal republics are trying to prevent the entry of private gambling companies in the German market.

The US has gone one step further with a general ban on  bank’s transferring payments to illegal online gambling. The real consequences of the new law are yet to be seen but Martin Sychold believes that for the time being it has put a stop to online betting. 

Illegal adverts and an ailing media watchdog

The conference also showed very sharp differences of opinion when it comes to deciding on what conditions the gambling market can be liberalised if at all.

The Danish gambling magazine Tips-bladet has accepted adverts for foreign bookmakers for years even though it is illegal to do so in Denmark. The magazine’s executive director Carsten Andreasen defended the actions by saying that in his view Tips-bladet is complying with EU rules.

”The real criminals you can find in the parliament that passed a gambling act three years ago which almost encourages civil disobedience… Freedom of speech was suppressed when parliament decided to make it illegal to place ads for foreign gambling providers,” Carsten Andreasen said.

Meanwhile Morten Rønde from the Danish tax authorities severely criticised newspapers and magazines for having given up on their watchdog function as they have accepted more and more foreign adverts.

”When AGF plays a friendly match against Barcelona, it is positive story in the media that bookmakers support the sport. But I am not so sure that the same bookmakers would want to support sport for all-initiatives,” said Morten Rønde.

He also pointed out that many of the companies use very aggressive marketing methods. Ladbrokes for instance asks people to invite their friends and acquaintances to gamble and then get a share of their losses.

National versus EU regulation of the market

One of the strongest arguments in favour of keeping national gambling monopolies is the risk of increased social costs, argued Tjeerd Veenstra, Director of the Dutch state lotto.

An argument in favour is also the fact that the proceeds from gambling go to society, although it is not recognised as a legal argument by the European Court of Justice. Tjeerd Venstra expects that a liberalisation of the gambling market would mainly lead to a situation where the gambling industry will effectively avoid paying taxes.

Director Norbert Teufelberger from Bwin believes that the private gambling industry has been unfairly criminalised. He got his own personal experience of this as he was arrested a few weeks ago on charges of violating French gambling law.

”In prison I thought: We will not give up,” Norbert Teufelberg said.

In his view a number of national gambling monopolies are behaving in a hypocritical manner when they heavily promote and allow gambling on slot machines that are known to lead to more cases of gambling addiction than any other types of gambling. Therefore the only sensible solution is a gambling market regulated by the EU, he said.

It is time for politicians to act

Søren Møller, president of the Danish Gymnastics and Sports Associations, doubts that EU regulation would solve the problem. The gambling market continues to need regulation and the proceeds should benefit democratically organised sports. Sport can not be dependent on commercial sponsorships because it would be primarily benefit the elite, he said.

That was indirectly confirmed by Warwick Bartlett from Global Betting & Gaming Consultants when he raised the rhetorical question why bookmakers should give money to sports they can not take bets on.

Søren Møller does not completely reject the idea that private gambling services could be allowed in Denmark but it would have to be under strict regulations.

”Whether regulation takes place through a monopoly or through licenses is not a matter of religion for us. But we must ask our politicians to step up to the plate and decide whether they want a liberalised and a regulated gambling market,” said Søren Møller. 

The conference was organised by Play the Game, Nordic Journalist Centre and the Danish Institute for Sports Studies.

See powerpoint presentations*:

• Overview of the Legal and Financial Battles for the European Gambling Marketby Martin Sychold, Head of research at the legal division, Swiss Institute of Comparative Law

• Why Should The Gamblers Pay? by Warwick Bartlett, Global Betting & Gaming Consultants, Chairman of Association of British Bookmakers

• The battle of Europe by Tjeerd Veenstra, Director of De Lotto, The Netherlands, and Chairman of European Lotterie's Legal working group

• Europe At The Crossroads: Regional monopolies or regulated competitionby Norbert Teufelberger, Executive Director of Bwin

* Links unfortunately unavailable