“The book is intended to provide the reader with food for thought, not solutions,” said Euromat President Eduardo Antoja. “Its main purpose is to assist policymakers, regulators, financial institutions and industry leaders to better understand the gaming and amusement sector and to perhaps allow them to perceive as potential opportunities what are now perceived as threats.”

The luncheon, held in the Altiero Spinelli building in the European Parliament, was attended by members of the German, Dutch, Austrian, Belgian, Italian, Spanish and UK trade associations and members of the Euromat secretariat, based in Brussels. Honoured guests included Jacques Toubon, French MEP and supporter of Euromat, who provided a forward to the book; Bill Newton Dunn, UK MEP; Astrid Lulling, Luxembourg MEP; Konstantinos Dimitriadis from the European Commission and Juho Tuovinen, political assistant to Finnish MEP Pia-Noora Kauppi. Euromat is particularly concerned that the European Commission will introduce damaging pan-European gaming legislation as part of its aim to create a single market, particularly in light of the fact that infringement procedures are currently underway against nine member states in the field of gaming and betting. “We are an industry of more than 20,000 small to medium-sized enterprises. We are a highly regulated sector and we are not necessarily in need of pan-European legislation,” said Antoja.

The fear is that amusements and gaming will get swept up with other industries such as sports betting and online gaming, mostly due to ignorance on the part of European legislators of the exact nature of the “coin-op” sector.

“The European Parliament has debated at length the balance which needs to be struck between member states who want to ensure that gaming is controlled and channelled, and the role of the European Union in ensuring the right environment is created for this sector. For this reason, the European Parliament exempted gambling services from the scope of the draft framework directive,” said Toubon in his preface to the book. During the meeting, he added that he felt the Commission’s current position on gaming is “dangerous” and more debate is needed.

Certainly, Dimitriadis from the European Commission was clear on his understanding of the situation. “The position of the Commission is that we want a single market, also for gaming. Of course we see that there are dangers, such as gambling addiction,” he told guests.

The call for harmonisation in European gaming laws is nothing new. In 1991, the European Commission compiled a report entitled Gambling in the Single Market – A Study of the Current Legal and Market Situation. Although the report concluded that harmonisation was necessary, the then Internal Market Commissioner Martin Bangemann conceded to pressure from member state governments, who argued that highly different and sensitive cultural and social environments existed in each nation, which made harmonisation undesirable.

On March 24, 1994, the industry awaited with bated breath the conclusion of the Läära case, where a Finnish operator challenged the government’s monopoly in the European Court of Justice. However, the court upheld the EU law, granting a single public body the exclusive right to operate slot machines, claiming that it was within the “public interest” to maintain the Finnish monopoly.

The same conclusion was reached in the Zenatti case in 1999 – where the state’s exclusive rights to sports betting were maintained.

It is the Gambelli case of 2003 that signalled a sea-change in the thinking of the European Court of Justice. In this case, “the Court considered that a national gambling law banning sports betting, when no licence is held (since it is the government itself that is operating a monopoly on betting), constitutes a restriction of the freedom of establishment and free provision of service set out in the EC Treaties,” writes Amadeu Farré, former Director General of gaming and leisure acitivites, in his essay in the book.

Hans-Günther Vieweg from the IFO Institute of market research in Munich says, “National courts must scrutinise the proportionality of the measures taken. They have to assess if it is adequate to maintain market-access barriers and to restrict the freedom of establishment and the freedom to provide services. These principles do not only concern the application of domestic players for admission to the market, but also service providers from other Member States wishing to access the market in yet another.”

Most recently, in March 2006, the German Federal Constitutional Court held that the state monopoly on Oddset sports betting was “unconstitutional”. It gave the government until the end of 2007 to reform the laws. “Lawmakers have two options here; they can either establish a constitutional monopoly which seeks to resolutely combat addiction to betting, or they will have to open the market to private enterprises under similar administrative supervision,” write BACTA’s Leslie MacLeod-Miller and Michael Winkelmüller, of law firm Redeker Sellner Dahs & Wikmaier, in their essay.

Put clearly, a European government can no longer “have its cake and eat it”. In a press release of October 2006 the European Commission stated: “A Member State cannot invoke the need to restrict its citizens’ access to betting services if at the same time it incites and encourages them to participate in state lotteries, games of chance or betting which benefits the state’s finances.”

This places the European gaming industry at a fascinating crossroads. Vieweg cleverly explores the two possible directions in his essay. “In general, the legislator has two choices. The first is to make sure that the public or publicly licensed company sticks to the objectives which justify the establishment of market-access barriers. This means, in the considered case, business conduct which refrains from aggressive advertisement and other incentives. The second is to provide market access to private companies.”

And the conclusion? “Public and publicly licensed suppliers are more interested in earning their monopoly rent than providing attractive products. In a competitive market, the situation would change and enterprises have to attract customers to get market share, as seen by the example of the sports betting market in Germany … From an economist’s point of view, measures to liberalise the market are desirable,” writes Vieweg.

Farré concludes: “If the market players in this economic sector have adapted to this technological revolution that has changed their business model in order to survive and be competitive in such a complex and regulated market, and have successfully adjusted to the changes required by their customers, amusement product users and consumers, so should the regulatory frameworks.” In other words – a one-size-fits-all approach is simply not good enough.

Lawyers MacLeod-Miller and Winkelmüller conclude: “The tensions and conflicts between prohibition and liberalisation in the gambling sector continue to defy resolution. Inconsistencies and challenges currently exist for many Member States where effective cross-boundary enforcement must develop in parallel with public-policy jurisprudence.”

This issue affects everybody working within the European amusement and gaming industry. Recent court rulings, such as that in Germany, mean that the status quo cannot be maintained for long. But in bringing down hypocritical monopolies, will we inadvertently usher in a pan-European AWP, with similar features, stakes and prizes? Clearly this would drive small and medium-sized enterprises out of business, as they would simply be unable to compete with huge manufacturer/operators that will create McDonald’s-style gaming arcades with one brand throughout the streets of Europe. What is the future of gaming and amusement in Europe? Get the book and join the debate.

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