EU's Digital Crackdown Expected To Touch Online Gambling

May 4, 2022
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The EU’s Digital Services Act will make life much tougher for technology giants such as Facebook and Google, but there are set to be some more subtle knock-on effects for gambling companies.

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The EU’s Digital Services Act (DSA) will make life much tougher for technology giants such as Facebook and Google, but there are set to be some more subtle knock-on effects for gambling companies.

The act is a flagship piece of new European legislation and is designed to exert a tighter grip on the massive tech platforms that mediate citizens’ access to news and commerce.

New rules would give the European Commission the power to fine companies up to 10 percent of their global turnover for non-compliance. The bill awaits formal approval by the European Parliament and Council, but after securing major backing in late April it is expected to come into effect by around January 2024.

For online gambling companies, the bill is expected to exert some indirect impact, particularly around advertising and illegal content.

European Commission chief Ursuala von der Leyen said the act “gives practical effect to the principle that what is illegal offline, should be illegal online”.

The DSA will make it easier for authorities to request that infringing advertising, among other digital content, is removed from so-called “intermediary services”, which include internet service providers, cloud services and online platforms like Google, Facebook and YouTube.

The European Commission is already working with the gambling industry as part of a cross-sector effort to remove advertising from websites that host illegal content — frequently the unlicensed streaming of sports.

Research from 2019 shows that major listed operators were among those advertising on illegal websites, but a recent update on the project suggests compliance has improved.

The terms of the act are deliberately expansive and are expected to ensnare online gambling content.

“The scope of the DSA covers online content and services, and how to act on content and services that are considered illegal under EU and national law. It therefore concerns a very broad range of services and products, including potentially online gambling websites and online advertisements of gambling services,” said Vasiliki Panousi, manager for EU affairs at trade body the European Gaming and Betting Association (EGBA).

The legal obligation for removing any illegal content would fall on the intermediary service, Panousi explained.

The act may add more fuel to fiery online gambling debates in countries that operate online gambling monopolies.

In nations such as Norway, which has been using measures such as ISP and payment blocking to try and keep out operators licensed elsewhere in the European Economic Area, advertising is often broadcast into the country from abroad.

Attempts to tackle this on television have seen the Norwegian Gambling Authority take enforcement action against media company Discovery.

“Under the DSA, a member state will be able to issue a national take down order and request an intermediary based in another member state, to remove content that is being transmitted in the territory of the member state that issued the order,” Panousi said.

“Intermediaries will be required to comply with the take down order relatively quickly.”

However, the EGBA, which has campaigned for an end to the online monopoly in Norway and elsewhere, argues that EU nations will only be required to comply with the takedown orders if they comply with EU law.

The regimes of Norway and Finland do not, the association says, although national governments in both countries take a different view and courts have generally sided with the monopolies. The European Commission, meanwhile, shows no signs of entering the debate.

The DSA will also provide some additional tools for combating those operators that are unquestionably in the black market, offering services into EU nations from well outside the bloc.

But, said Panousi, “whether the introduction of the DSA will genuinely make it harder for black market operators to operate within the EU remains to be seen”.

“While it might make life for black market operators more difficult, it doesn’t stop the consumer accessing gambling services that are not licensed anywhere in the EU,” she said.

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