Malta complains to EU over Irish gambling proposals

Government proposals to limit winnings from lotteries, bingo and casino games may breach European law by threatening “the freedom to provide services”, says a complaint to EU officials.

The Government’s Gambling Regulation Bill proposes limiting wins from private lotteries, bingo and other games to as little as €3,000, sparking protests from betting businesses, including National Lottery rivals.

Malta’s economics ministry has flagged several sections of the proposed Irish law that it says threaten the EU-guaranteed freedom to provide services, which boost competition by allowing businesses to trade with customers in different member states.

The country, one of the main offshore centres for gambling firms in Europe, is the latest critic of the Bill promoted by Minister of State at the Department of Justice James Browne. Numerous industry groups have highlighted potentially damaging consequences for betting and other businesses.

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Malta’s notification to the European Commission’s internal market directorate doubts whether the “restrictions imposed in the draft Bill may be justified” in terms of EU courts’ rulings.

The law limits wins from “relevant games” to €3,000 and caps lotteries, except the National Lottery, at sums from €3,000 to €360,000, depending on their purpose and frequency.

Those limits also apply to online bingo, casino and jackpot games, prompting warnings from lottery companies and betting businesses that the restrictions will push players to black market operators.

Member states can restrict rights including the freedom to provide services on grounds of public policy, security, health, combating crime or consumer protection, Malta’s submission acknowledges.

However, it points out that these limits must be proportionate and appropriate, and applied in a consistent, systematic, non-discriminatory way.

The submission argues that the Republic has not provided adequate justification for the restrictions, either in the Bill or an impact assessment of the provisions.

Consequently, the country maintains that the limits “constitute an unjustified breach” of the freedom to provide services.

It warns that the restrictions will encourage players to bet in the black market “therefore not satisfying the objective of consumer protection”.

Mike Kirwan, Ireland and UK vice-president of Lottoland, which offers betting on different national lottery results, echoed this, predicting that the limits would prompt Irish people to use unlicensed businesses that provide no customer protections.

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He said that research commissioned by the French regulator, l’Autorité Nationale des Jeux (ANJ), found that illegal sites lure up to €1.5 billion, about €1 in every €9, from the country every year.

The unlicensed operators, in Curaçao and Cyprus, have no stake or win restrictions and provide no player protections.

Mr Kirwan said Lottoland backed the Irish Bill’s aims. “But parts of it are very, very prescriptive and were written by somebody who does not understand the nuances of the industry,” he said.

Groups including the Irish Bookmakers’ Association and Paddy Power owner Flutter Entertainment have also raised concerns that win limits would drive customers to the black market.

Malta’s warnings that provisions allowing the new gambling regulator to limit the amount of cash that customers can lodge in remote betting accounts may be another unjustified restriction.

Finally, the country highlights the Bill’s demand that betting businesses providing services to other gambling companies based in the Republic must be licensed here, even if they are already licensed elsewhere in the EU.

Its submission notes that the Court of Justice of the European Union has ruled against restrictions that duplicate checks already carried out in one member state.

Malta calls on the Irish Government to reconsider the restrictions it has outlined as they are not proportionate, consistent or non-discriminatory.

The Department of Justice said that the State had not been asked to change the Bill on foot of consultation with other EU member states and noted that this process was closed.