Online gambling is a fast developing business in the EU. In 2008 alone, revenue generated by online gambling exceeded €6 billion and this is expected to double by 2013. On 24 March 2011 the European Commission published a Green Paper on online gambling in the Internal Market. This paper launched a major public consultation through which the Commission hopes to gain a more comprehensive picture of the current online gambling sector in Europe in order to determine if EU involvement is required.

Areas of concern for the Commission

The cross-border nature of online gambling and the differing regulatory systems currently in operation in Member States means that uncertainty pervades the area, causing many cases to be referred to the European Courts each year. The Green Paper questions whether a central legal framework for online gambling is required to provide greater legal certainty for operators, consumers and those charged with the regulation and enforcement of such activity throughout Member States.

The key policy issues discussed in the Green Paper are:

  • Enforcement. The cross–border nature of online gambling and the differing regulatory systems in each Member State make enforcement difficult. Some states, such as Ireland, prohibit the establishment of gambling activities in their own country but their citizens are permitted to use online gambling sites established in other Member States. This has created a ‘grey’ area of law which the Commission wishes to clarify.
  • Defining and regulating online gambling services. The Commission hopes to discover whether more centralised, EU involvement would aide the functioning of the Internal Market and enable better consumer protection by making practices amongst Member States more uniform. It is also considering best practice to be used for licensing of such operators.
  • Related Services. The Commission is aiming to gain a more comprehensive over-view of the current state of any related services, such as advertising, customer identification measures and payment systems to ascertain whether EU level input is required.
  • Public interest. The main issue for the Commission is consumer protection, with a focus on gambling addiction and the protection of minors and other vulnerable parties. The Commission also wants to ensure public order issues such as fraud, unfair games, money laundering and tax evasion are prevented.  

The current position in Ireland

Gambling in Ireland is currently governed by the Gaming and Lotteries Act 1956 and the Betting Act 1931, neither of which specifically address online gambling. These Acts generally prohibit gaming unless it is carried out at a carnival or licensed amusement hall, can be brought within the private members’ club exception, or falls outside the definition of “unlawful gaming”. Unlawful gaming can be broadly defined as a game, whether of skill and/or chance, where the players, including the banker, are not equal. It is currently not an offence for Irish residents to gamble on an internet gambling site that is established outside Ireland.

Next steps

The public consultation process on the Green Paper is now closed, and responses and contributions to it are being considered by the Commission. The Commission will then report on any further action it deems appropriate in light of the contributions received. The publication of the contributions and the response of the Commission is awaited.