Will EU digital fairness make international gambling clashes more likely?

The trade body representing European gambling companies has cautioned Brussels that regulation “does not automatically mean better consumer protection”. This week, the European Commission (EC) added new articles to the Digital Fairness Act (DFA), a proposed EU-wide Act that seeks to make consumer protection laws “fit for the digital age”. While the Act does not directly address the gambling industry, the sector is well aware of the significance that the legislation could have on its operations. The European Gaming and Betting Association (EGBA) was quick to respond. EGBA has urged the EC to ensure that any rules, including those brought in by the DFA pending its approval by the European Parliament, are coherent with the national gambling frameworks and with existing EU legislation. The trade body has warned against the prospect of conflicting obligations airing from different EU and member-state legislative frameworks, as well as legal uncertainty, the possibility of legal duplication, and regulatory gaps. “More regulation does not automatically mean better consumer protection,” said Pierre Tournier, Interim Secretary General of EGBA. “The DFA must build on existing national and EU safeguards, avoid duplicating obligations and provide legal certainty for businesses.” The EU is already host to some inter-jurisdictional legal clashes involving Maltese companies in Germany and Austria. Court cases have seen the island nation’s protectionism of its gambling space under the Bill 55 legislation challenged at the EU level. What will the Digital Fairness Act do? The DFA is mainly targeting business practices seen as prompting excessive spending by customers, such as a ban on manipulative marketing tactics like ‘fake/false claims’ – e.g. telling customers that event tickets are running out, so they’d best buy one soon. The legislation will also mandate influencers to clearly declare whether they are advertising a product, restrict exploitative targeting such as personalised adverts targeting children or those which use sensitive personal data, and make subscription cancellations easier. For the gambling industry, perhaps the most relevant requirement in the bill is “fairness by design”. This would give customers the option to turn off “addictive design features’ that encourage excessive or compulsive spending, such as persistent prompts. Depending on how the legislation is interpreted by EU member state courts, this could lay the groundwork for customer challenges against operator bonuses for example, like free bets and free spins, with these labelled a persistent prompt to keep bettors on site. EGBA states that it shares the EC’s desire to strengthen consumer protection, including protection of minors, clamping down on misleading commercial practices, and ensuring greater transparency in the digital environment. The trade body’s Secretary General added, however, that “at the same time, stronger consumer protection in our sector cannot stop at regulated operators”. “Illegal gambling websites operate outside the law, disregard player protection standards and expose consumers to serious risks,” Tournier said. “If Europe is serious about protecting consumers online, tackling the illegal gambling market must be a priority, not an afterthought.”