Is online gambling illegal in Europe?

Although the individual European countries may argue about who precisely came up with what and when, nearly all of the major table games played at both online and land-based casinos today have their roots in Europe. Poker began there. So did Roulette, Baccarat and Bingo. Even Blackjack can be traced to a European ancestor. The significance of this is simply that Europeans have been gambling for at least half a millennia now, and show no signs of stopping. Granted, there have been periods of prohibition, but the tide always turns eventually.

There was a time when only royalty and the very wealthy could play, but ordinary people have been able to try their luck for around 300 years now. The advent of the Internet and online casinos has brought an even greater level of accessibility, as you now only need an Internet connection to play anywhere in the world.

European gambling legislation

Prior to the formation of the European Union, each country naturally legislated and regulated their own gambling sectors. Not all European countries allowed gambling, but a lot did, and many European governments derived significant tax income from state-licensed (and often state-run) casinos.

However, eventually the Wall fell, and years later the European Union was formed. Within the EU, there is a treaty of fair trade, specifically designed to encourage European countries to do business with each other.

Under the terms of this Free Trade agreement, an EU member country may ban a particular business practise within their territory on moral or ethical grounds – but not if the ban merely excludes foreign companies from entering their markets and protects local monopolies from competition.

Therefore, under the strictest interpretation, online gambling is completely legal in the EU, and in fact is a thriving market sector.

Current state of online gambling in the EU

Despite the terms of the Free Trade agreement, at least 10 member states have opted to enact local legislation banning online gambling. In some cases, this is because no gambling is permitted at all, but in several others - notably in the case of France and Germany - the laws can be interpreted as vigorous protection of state-owned gambling monopolies.

For example, Germany passed a law in January 2008 that banned all forms of online gambling, allegedly to protect their citizens from being preyed upon by unscrupulous online casino operators. However, they continue to operate state-run lotteries over the internet - although this practise has now been scrapped in at least 1 German state as a direct result of this law, arguably an unforeseen side effect.

Germany's anti-online-gambling laws, as well as France's, are currently the subject of a challenge in front of the European Commission. It is being argued that their prohibitive laws represent a double standard and are in violation of the EU Constitution.

The European Commission can sue member countries to force compliance, but prefers to adopt a more diplomatic approach. As a result, France is currently voluntarily enacting legislation that will open their market to licensed foreign competition, and it is hoped that other dissenting EU countries will follow suit.