European Gaming Issues

Thibault Verbiest

IAB, Chicago

22 September 2006

European Gaming Issues

“ If you bet on a horse, that’s gambling. If you bet you can make three spades, that’s entertainment. If you bet cotton will go up three points that’s business. See the difference ? ”

European Gaming Issues

• A brief “update” Traditional gaming: Bookmaking agencies,

brick and mortar casinos, horse racing, bingo, sports wagering, lotteries

Non-traditional gaming becoming more prevalent :

internet gaming SMS games Video games and much more !

European Gaming Issues

• Remarkable growth of the online gambling market Traditional bookmakers are using the internet to make

gambling much more accessible to a much wider audience: Ladbrokes, William Hill (UK) Traditional land-based bookies now compete with online-

only sportsbooks : BWin, Sportingbet Online poker: fastest growing segment in the last 18

months Online casino: lower growth / often added to sportsbooks

or poker sites

European Gaming Issues

• What is noticeable on each of these sites? Markets that were differentiated offline become

one: “the online gambling market” versus “the casino market”, “the betting market”

Monopolies go online and diversify: eg, Française des Jeux offers lotteries, sports betting, and more and more casino style games

More competition

European Gaming Issues

• Where do the problems come from ?! Outdated legislation, not aimed at internet gaming:

eg, French 1836 Lottery Act! No European harmonization: each countries has its

own laws: Malta and UK ≠ France Restrictive gaming policies: monopolies based on

false pretense of consumer protection, anti-fraud, public order

Consequence: unfair competition, infringement of internal market rules ► complaints and litigation

European Gaming Issues

• Most recent one: France Executives of Gibraltar based bookmaker BWin

arrested following complaint by monopoly Criminal proceedings based on “unlawful games of

chance, unlawful lotteries and unlawful horse betting”

But pressure from European Commission growing: infringement proceedings to be launched soon against 8 countries including France

Fierce battle between Europe and France is starting

European Gaming Issues

• Belgium : From prohibition to regulationNew Games of Chance Act to allow

European remote gaming operators to apply for “quality labels certificates” with Gaming Board

Entry into force 2007

European Gaming Issues

• Concluding remarksBoom of European gambling market

pushing towards liberalisation and reform of outdated systems

National “de facto” opening (Belgium, Italy, Germany) closely followed by European scrutiny

Outlook: market opening 2-5 years

Thank you for your attentionthibault.verbiest@ulys.net