EEGReport Magazine: I think you are the right person to address these question, since you have experience in both judicial systems. We know Eastern European countries follow a different system in terms of common law and civil law. Do you think that among the norms, some of the human rights have been lost with all the blacklisting and banning of operators that are not licensed?
Nadya Hambach: Well, Eastern Europe like the rest of the western European countries (except UK) has definitely other judicial system than the common law judicial system. Nevertheless the differences between the judicial systems, does not per se mean that one of them protects rights better than the other. When we talk about blacklisting and banning unlicensed gambling activities, we could not stay apart from the fact that gambling is a sensible business activity. Exactly for that reason it has been excluded from the common internal market principals in the EU and its individual regulation by each of the member states has been tolerated. Hence blacklisting and restrictions for unlicensed in each particular jurisdiction operators are justifiable measures in Europe. How long this will be the status quo and whether and when there will be a gambling regulation on the European level is looking into the crystal ball question.
EEGReport Magazine: According to the European Union’s directive on electronic communications, member states cannot abusively block or limit Internet access. The fundamental problem is that blocking websites through the Internet provider is a measure of censorship of online content. Do you feel that countries that are blacklisting the un-licensed operators are doing the right thing?
Nadya Hambach: When it comes to the e-commerce Directive (2000/31/EU), it excludes explicitly gambling from its application scope (Preamble, point 16 and Art. 1, Para. 5, lit. d). Again, the legal situation in Europe concerning gambling is far away from being harmonised. Just the opposite – member states are aiming its non-harmonisation and are not ready to give up their sovereign in the name of a common European gambling regulation. Not only there is no dedicated European directive regulating gambling, but there are just few Directives applicable to gambling –Information in the field of technical standards Directive (Notification directive), Fourth AML Directive , two Data protection Directives, Directive about unfair terms in consumer contracts and Directive about granting concession.
Getting aside from the pure legal situation, a very important question remains whether blacklist is in reality an effective measure to stop unlicensed operations? I think we all know the answer of that question.
EEGReport Magazine: How are they juggling the European Union with these censorships?
Nadya Hambach: “Juggling” is a good word to describe the situation on the European Union Level when it comes to gambling. As already mentioned – gambling regulation within Europe is not harmonized through secondary law. There are just several so called “soft law” initiatives for gambling in the form of consultations, recommendations, working groups, but they all have non-binding effect. Because of the lack of a dedicated secondary legislation, for gambling remain applicable the common freedoms and principles of the European Union. Would have been simple, but the picture is actually very complex. Because of the specific character of the gambling business and in order to protect public order and public values, European internal market freedoms could not be applicable to that sector. The Treaty on functioning of the European Union itself justifies such an exemption insofar it does not have a discriminatory nature. But even discriminatory measures could be justified by ECJ through so called legitimate public interest objectives. An important exception to that exception – they could not be of an economic, fiscal or protectionist nature. So logically, no member state uses the fiscal motivation as an argument to restrict the access to its market for operators who are not explicitly licensed in that particular jurisdiction. Restrictions are always explained with consumer protection, prevention of public order and prevention of gambling addiction objectives. Whether these arguments doesn´t just “wrap up” pure fiscal interests is a question ECJ should give an answer, hence justify or not restrictions.
EEGReport Magazine: Can online gambling be looked at in a different way, rather than something to ban?
Nadya Hambach: It is not only that is could be seen different way than banning, it should be seen that way. Banning is the way leading to black market and endangering mostly the consumers. There is no worse regulation that banning. Gambling is a demand from the society and especially in the internet space, it could not be eliminated. Blacklisting, payment blocking and any similar restrictive measures could not be effective measures to stop gambling operations, hence their regulation is what would make the differentiation between reliable and committed to the high business standards gambling operators from those who are not. The last lose market positions in a regulated environment.
EEGReport Magazine: In regards to the recent changes to Bulgaria’s online gambling laws have made the market increasingly attractive to both foreign and local operators. But how is the competitive landscape shaping up?
Nadya Hambach: As the liberalization of the Romanian market is still not completed and based on temporarily decisions, Bulgaria remains the best regulated and most attractive eastern European gambling market. Increasing number of the licensed operators (especially international ones) is reducing the market share of the illegal operations and makes the market more transparent, reliable and naturally – more attractive.
EEGReport Magazine: Should more operators be queuing up for a license? Or does too much uncertainty remain to make it a sustainable investment?
Nadya Hambach: Whether more operators would be queuing for a license is a matter of their business decision. Operators with long-term vision for their business development know that eastern European markets have a lot of potential, which has not been explored until now. Establishing legal presence in Bulgaria gives opportunities for stable positioning on the other eastern European emerging markets as well.