BUSINESS

EU focusing too much on consumer protection

TAGs: EU Green Paper, European Union

European Union flagThe European Union’s Green Paper on the continent’s online gambling industry earlier this year showed that what was a mere glint in their eye is making its way to the top of their agenda. October is the month when formal responses will be given as to whether changes need to be made to the EU’s gambling market in its current state and how seismic these alternations might turn out.

One of the main points that is being thrown around that big room in Brussels that they call home is how the consumers need more protection against what Stefano Mallia of the European Economic and Social Committee (EESC) called “a jungle.”

Mallia also added, “There is total confusion and it’s very difficult to know which we sites are legal and which are illegal.”

Primarily, the problem that the EU has is that different territories within their area have policies that differ hugely when it comes to the gaming industry. Many EU member states have embarked on a level of regulation that is over and above what is needed.

Take France as a prime example. Just over a year ago, the country decided that time was ripe to put down their garlic and frog’s legs and embark on regulation of their online gambling market. What they ended up with was something that looks a lot like when the customary steak tartare doesn’t agree with the diner. High taxation has led operators from their own country to become critical and meant that no-one’s a winner.

Markets like France have created a number of barriers to consumers, as it doesn’t allow them to get the best value for money that they deserve. It means those in countries that have this type of regulation are suffering. The result is the complete opposite to what governments were hoping to do in the first place. These jurisdictions would have been better off with no regulation at all instead of the wrong type that they currently have.

Of the jurisdictions that haven’t chosen the balkanized or ring-fenced approach, those in the UK and Malta are widely recognized as the most trustworthy. As the Times of Malta article points out, “Malta, together with the UK, is considered a Mecca for hosting online gambling operators.”

Why is this the case? Well it’s not all down to the “favorable tax regime” mentioned in the article. It has more to do with there being a responsible system of both taxation and regulation that mean the innovation of the EU’s free market principles is able to survive. That means shady operators die out leaving the responsible ones in a position where they can offer the best value for consumers.

We have seen a number of studies in the past that have shown gambling isn’t inherently bad for the normal person on the street. One esteemed opinion on the subject comes from Dr Patrick Basham. Citing scientific studies, Basham stated, “The bottom-line is that gambling is good for us. And, in a policy environment where illiberalism is the de facto governing philosophy, gambling is an important component of a truly liberal society.”

The fact that the EU is attempting to adopt all manner of things to protect the consumers goes against this and other studies. What they really need to do is take a leaf out of either the UK or Malta’s book and encourage regulation on that level.

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