A new report led by Queen Mary University of London into the enforceability of online gambling regulations has found that current restrictions on advertising are insufficient and rarely enforced.
1 February 2019
The research, funded by the EU Commission, found that only 63 per cent of regulators had the power to issue notice and take down requests when it came to illegal online advertising and only 21 per cent had the power to request that the material remained offline.
The findings also show that social media companies are effectively closing their eyes to commercial gambling advertising posted online as user-generated content.
83 per cent of regulators claim that their jurisdiction applies to online advertising but just over half (57 per cent) apply regulations to affiliates, influencers and brand ambassadors. Of these, barely a quarter (26 per cent) have taken enforcement action against these groups.
The research finds that even though 52 per cent of EU and EEA Member States have measures in their regulatory toolkit to block payments made to foreign unlicensed online gambling operators, only 30 per cent of EU and EEA Member States have actually implemented a legal system to prevent the processing of gambling deposits made to unlicensed operators or to block payouts.
The research attributes this discrepancy to the complexity of stopping online payments, which frequently involve a chain of payment intermediaries, including digital wallets outside the jurisdiction of the regulator.
The research also shows the significant variation in both the number and amount of fines imposed by national gambling regulators. Financial penalties range from €100 up to over €1million. Furthermore there is scant evidence of fines imposed against foreign online gambling operators, outside the jurisdiction of the regulator. 39 per cent of states were found to have imposed no fines at all in the period 2015-2017.
When it comes to social media, advertising for online gambling, and in particular sports betting, was found to be largely unregulated since advertising in posts on Twitter and Facebook, for example, are not always classified as such. The study shows how difficult it is to distinguish between user-generated content and advertising.
Julia Hörnle, Professor of Internet Law at Queen Mary’s Centre for Commercial Law Studies said: “Online gambling in its multiple forms can easily be provided from a foreign country, where it is more difficult to enforce player protection standards making enforcement tricky and resource-intensive.
“User-generated content on social media also adds to the difficulty since it is effectively a form of illegal advertising but often not recognised as such. Current regulations are not fit for purpose.”
“No single state can regulate this one its own. The situation requires an international response and for common standards to be applied across the board. This report identifies the opportunities for international co-operation and the evidence suggests that these opportunities have not yet been sufficiently explored. For this reason it is all the more important that the new EU Commission takes up the reins again on co-ordinating online gambling regulation in the EU and reinstates the Expert Group.”
The research, Evaluation of Regulatory Tools for Enforcing Online Gambling Rules and Channelling Demand towards Controlled Offers, examined the use of website blocking against unlicensed online gambling websites and the take-down of gambling apps from app stores. It also inspected the blocking of payments to and from unlicensed online gambling operators, as well as advertising restrictions and administrative and criminal sanctions.
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