Public Gaming Magazine January/February 2016

January/February 2016 // PUBLIC GAMING INTERNATIONAL //

H. Höltkemeier:

The legal concept

of “subsidiarity” may not have served its

intended purpose for us. To some extent,

the European Commission has construed

this concept to mean that it should per-

form no role at all in the enforcement of

regulatory frameworks in the Union. The

fact is that member states need the sup-

port of the EU Commission, and the re-

source of its legal institutions and agents

of law enforcement, to help member

states protect their citizens from illegal

gambling offers extending across national

borders, or to fight adequately against

match fixing and/or money laundering.

Member states do not have jurisdiction to

enforce their laws over against the actions

of businesses based in other countries. As

a sector, we need the assistance of EU in-

stitutions to ensure that all member states

act to uphold the laws. It is true that it is

contrary to the interests of government-

lotteries and the rights of member states

to protect its citizens, for the EU Com-

mission to force member states to open

up the markets to multiple operators who

sell across borders without complying

with the laws of each individual member

state, and the Court of Justice has clearly

stated this in various cases. But this sec-

tor needs the support and resources of

the EU institutions to enforce the laws

and require compliance by international

i-gambling operators. We have already

started to change the argumentation to

focus on cooperation with the EU Com-

mission towards the mutually desirable

goal of respect for the laws, and respect

for the rights of state governments to

protect the interests of its citizens when

it comes to regulating and taxing the

games-of-chance industry. We are coming

together to promote the relevance of the

Lottery-Principles (Integrity, Solidarity,

and Precaution) and to combine and in-

tegrate those with the principle of respect

for the laws of the individual member

states. The key part of this position is the

recognition that Lotteries and gaming are

not like other businesses. The reality of

money laundering, social costs like prob-

lem gambling, and illegality require a spe-

cial level of regulatory control.

Isn’t the “Digital Single Market” an inevi-

tability? Aren’t we basically in a position to

stanch the inevitable tide for as long as pos-

sible? And isn’t it already the case that rogue

unlicensed operators like LottoLand and

Tipp24 are imposing the “Digital Single

Market” on even the traditional lottery space

in ways that are difficult to prevent?

H. Höltkemeier:

First of all, the “Dig-

ital Single Market” (DSM) is not the

same thing as a “unified European Gam-

ing Market,” as the vast majority of gam-

ing revenues and stakes are still generated

off-line, outside the internet. Lotteries

are a special part of the entertainment-

business and their operation is most of-

ten a combination of online and offline

activities. This is important to keep in

mind, as a DSM might solve some chal-

lenges and open new perspectives in the

digital area, but it may also cause much

bigger additional problems in Lottery’s

land-based business.

Having said this, we should recognize

that regulation of the digital markets is

a pressing challenge. I will not say that a

DSM is inevitable for the gambling sec-

tor, and certainly would not say that for

government-Lottery. I will say, though,

that we all need to observe the realities of

how the “winner-takes-all” dynamic (e.g.

Google and Facebook) of the DSM is

problematic for Lottery if it were to over-

take our activities. Further to that, law-

makers, shapers of public policy, and all

Lottery stakeholders should recognize the

aspect in which there is no going back.

Once markets evolve in that direction,

there is no putting the toothpaste back

into the tube. That is why we, as a sector

and the EL Association, need to do every-

thing we can to prevent that from hap-

pening to the government-gaming sector.

The challenge with the EU Commis-

sion is that their starting point is that

minimal regulation is what is best for

business, for the growth and prosperity

of markets, and for the consumer. This

philosophy does not consider the down-

side impacts of deregulation in the Lot-

tery industry, and the gambling sector as

a whole. Our mission is to bring attention

to this vital point in the dialogue about

how the regulation of Lottery and gaming

should evolve in Europe.

In your Forward to the EL Magazine, you

submit that Lotteries need to support their

arguments for why governments should pro-

tect the fundamental Lottery model that

supports Good Causes with more facts and

data. What kinds of facts and data are you

referring to, and is the EL helping to coordi-

nate efforts to gather, curate, and organize

the facts and data?

H. Höltkemeier:

Let’s start thinking of

Lottery as operating by a set of Lottery-

Principles instead of a “Lottery-model.”

It’s true that we operate as “a business,”

but our mission of service to society is

much broader than that, and our commu-

nications should reflect that fact. And we

need to bring attention to the facts and

the data that support that concept.

For example: Private commercial opera-

tors have always argued that the govern-

ment will benefit by the taxes generated

by their gambling operations. And that is

the rationale for the government to sim-

ply grant license for illegal operators to

operate legally—open up the markets to

multiple operators who will compete for

the business, grow the market, and pay

Hansjörg Höltkemeier Interview

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