Over the last few months there has been a running dispute between the online gambling operators in the United Kingdom and the Minister for Sports Gerry Sutcliffe over voluntary contributions from the industry to the Responsibility in Gambling Trust (RIGT). The RIGT conducts research on problem gambling and also engages in spreading awareness and treatment of problem gambling and needs funding in order to carry out its activities. The Minister had indicated that unless the online gambling operators came up with the required funds, the government would be compelled to impose a tax on online gambling revenues. The gambling operators claimed that the amount asked for was unreasonable, particularly in view of the given economic situation.

This week the Minister announced that the impasse had been resolved. The industry had offered a new proposal of contributing GBP 15 million over three years to the RIGT. The minister has accepted this proposal. The Minister said, “I’m very pleased we have managed to secure the future of this important work without the need for new legislation, and I’m confident the new structure will be successful. But if, in the coming months, it becomes clear that it is not working, I will not hesitate to bring in a statutory levy.”

This implies that the threat of the tax is very much there. The mechanism for levying the tax is already in place. If the online gambling industry defaults in its commitment the Minister has averred that the industry will not be given a second chance.  

Meanwhile in France the proposal to regulate online gambling from 2010 is in trouble. The draft proposal submitted to the European Commission has been rejected. The proposal envisaged the setting up of an Online Games Regulatory Authority. The liberalization will initially be restricted only to certain sectors of the online gaming industry such as horse race betting, sports betting and games of skill and chance between players. The last category covers games like poker. Sectors specifically not covered are lotteries, spread betting and casino games in which consumers play against the house. These categories have been left out because they are considered more addiction prone and therefore more harmful.

The European Commission outlined the reasons for rejecting the proposal. Broadly the proposal did not comply with European law. Specific factors objected to include the low maximum payout ratios that operators are constrained to offer to players, restrictions imposed on international companies who want to enter the French market and difficulties regarding the use of sporting event brand names.

The French government’s view is that it is essential to set the maximum payout ratio at a lower level rather than industry norms in order to prevent addiction. The European Commission is not buying this argument. They are viewing this as a ploy to prevent those established operators who can commercially offer higher payouts from doing so. The Commission has asked France to provide evidence substantiating its claim. The Commission has also asked France to come up with a revised proposal by July 8. However if the French government decides to implement the proposal in its present form it could face legal action by the European Commission.

The European Gaming and Betting Association (EGBA) has expressed satisfaction at the European Commission’s decision to reject the French proposal. Maarten Haijer, EGBA Director for Regulatory Affairs said: "It makes no sense to create a local Internet market in France. We welcome the Commission’s action and are confident that France will reconsider its proposal to avoid litigation".