European Gaming Issues Thibault Verbiest IAB, Chicago 22 September 2006

European Gaming Issues “ If you bet on a horse, that’s gambling. If you bet you can make three spades, that’s entertainment. If you bet cotton will go up three points that’s business. See the difference ? ”

European Gaming Issues A brief “update”  Traditional gaming: Bookmaking agencies, brick and mortar casinos, horse racing, bingo, sports wagering, lotteries  Non-traditional gaming becoming more prevalent :  internet gaming  SMS games  Video games  and much more !

European Gaming Issues Remarkable growth of the online gambling market  Traditional bookmakers are using the internet to make gambling much more accessible to a much wider audience: Ladbrokes, William Hill (UK)  Traditional land-based bookies now compete with online-only sportsbooks : BWin, Sportingbet  Online poker: fastest growing segment in the last 18 months  Online casino: lower growth / often added to sportsbooks or poker sites

European Gaming Issues What is noticeable on each of these sites?  Markets that were differentiated offline become one: “the online gambling market” versus “the casino market”, “the betting market”  Monopolies go online and diversify: eg, Française des Jeux offers lotteries, sports betting, and more and more casino style games  More competition

European Gaming Issues Where do the problems come from ?!  Outdated legislation, not aimed at internet gaming: eg, French 1836 Lottery Act!  No European harmonization: each countries has its own laws: Malta and UK ≠ France  Restrictive gaming policies: monopolies based on false pretense of consumer protection, anti-fraud, public order  Consequence: unfair competition, infringement of internal market rules ► complaints and litigation

European Gaming Issues Most recent one: France  Executives of Gibraltar based bookmaker BWin arrested following complaint by monopoly  Criminal proceedings based on “unlawful games of chance, unlawful lotteries and unlawful horse betting”  But pressure from European Commission growing: infringement proceedings to be launched soon against 8 countries including France  Fierce battle between Europe and France is starting

European Gaming Issues Belgium : From prohibition to regulation  New Games of Chance Act to allow European remote gaming operators to apply for “quality labels certificates” with Gaming Board  Entry into force 2007

European Gaming Issues Concluding remarks  Boom of European gambling market pushing towards liberalisation and reform of outdated systems  National “de facto” opening (Belgium, Italy, Germany) closely followed by European scrutiny  Outlook: market opening 2-5 years

Thank you for your attention