The upcoming Digital Services Act (DSA) as proposed by the European Commission aims to create a safer digital space in which the fundamental rights of all users of digital services are protected and marks a milestone update in the regulation of Internet in the EU.

It foresees a number of provisions that could potentially be beneficial in the lotteries’ fight against illegal online gambling. These include an improved notice-and-action mechanism which would enable all users to notify illegal content online, an introduction of the concept of “trusted flaggers” whose notifications of illegal content would need to be addressed with priority; and enhanced consumer protection and know-your-business-customer requirements.

EL debated the DSA in a dedicated webinar, bringing together EL’s experts on EU policy dossiers and a broad audience of EL Members. EL sees the opportunities of the provisions and is careful to maintain the current position of the gambling sector to be excluded from all regulations. All EL Members were called to contact their EU Members of Parliament or Permanent Representatives to safeguard this.   

Iva Zorko, Policy Officer & Alvise Angelini, Senior Policy Officer at EL set the scene for the discussion, providing an overview of the objectives of the DSA and the process at EU level. 

The objectives of the DSA are to modernise the rules to address illegal content, clarify the rules on liability, giving companies legal certainty to take voluntary action in a diligent and proportionate manner under clear terms of service and to increase transparency, accountability and facilitating better oversight more effectively. Last year, the European Commission consulted a wide range of stakeholders to prepare for the legislative package, including a submission from EL.

In December 2020, the Commission published its DSA legislative proposal and at the beginning of this year, the European Parliament’s Internal Market and Consumer Protection Committee (IMCO) was assigned the exclusive competence of the DSA with MEP Christel Schaldemose (S&D Denmark) appointed as its rapporteur. Since then, the draft report has been presented to IMCO with three associated committees adopting their opinion.

The final vote on the DSA is expected to take place in an extraordinary IMCO Committee on 22 November.

In parallel to the process in the Parliament, the Council of the EU also examines the Commission’s proposal.  The Committee of the Permanent Representatives of the Governments of the Member States to the European Union (COREPER) will now examine the compromised text prepared by the working party in view to submitting it to the Competitiveness Council to adopt it as a political agreement (pending a first reading position of the EP), also known as a “General Approach”.   

Just last month,  EL urged the Council to exclude the explicit mention of online gambling and betting services from the DSA.

EL continues to keep a close eye on developments. 

Insightful learnings

The panel debate included EU experts from EL’s Public Affairs Coordination Working Group (PAC). They gave their opinions on the provisions to fight illegal online gambling.

Nils Petersen, Permanent Representative to the EU, WestLotto (Germany)  highlighted first the mention of “online gambling and betting” in Recital 29 of Council’s compromise text:  “[…] The applicable national laws should be in compliance with Union law, in particular including the Charter and the Treaty provisions on the freedom of establishment and to provide services within the Union in particular with regard to online gambling and betting services. […]” ”One of the goals of the DSA is to combat illegal content. But it certainly cannot be the aim, by means of a recital, of endangering the balanced gambling sector, which is defined by the European Court of Justice as a Member states prerogative. Especially since the text explicitly refers to the E-Commerce Directive, from which gambling is excluded.”

Nils Petersen, WestLotto

Petersen warned that a close eye is needed on the further voting on the text of this recital. At best, the mentioning of online gambling and betting should be deleted.

Frédéric Deroin, Head of European, Public and Regulatory Affairs, La Française des Jeux (FDJ), France and Executive Chair of the EL Public Affairs Coordination Working Group touched upon the notice-and-action mechanism, a sensitive issue because it is not only about curbing the spread of illegal contents and products online, but also about the liability regime applicable to online intermediaries, including (very large) online platforms. The e-Commerce Directive already sets rules in this field, but these are generally applicable to a limited number of intermediaries. ”The DSA envisages to impose to hosting services providers (which explicitly include platforms) to put in place “notice and action” mechanisms enabling individuals or undertakings to notify illegal activity or content. The DSA could therefore improve drastically the efficiency of the fight against illegal online gambling offers and advertising, by allowing anyone to contribute through the “notice and action” mechanisms to make Internet safer for players.”

  Frédéric Deroin, La Française des Jeux (FDJ)

Dimitra Voulgari, International Relations Manager, OPAP, Greece then focused on the concept of “trusted flaggers”. The DSA establishes the concept of “trusted flaggers” - independent entities which shall identify and notify illegal content to online platforms. Upon their notifications, online platforms will have to react with priority and without delay. This concept foreseen in the DSA could be a powerful tool for national lotteries or EL when tackling illegal content online. ”The Council’s compromise text makes an explicit mention of Associations as potential trusted flaggers (recital 46) : “Industry associations representing their members' interests should apply for the status of trusted flaggers, so as to limit the number of trusted flaggers awarded by the Digital Services Coordinator, without prejudice to the right of private parties to enter into bilateral agreements with online platforms.”, i.e. we could see European Lotteries or GLMS applying for the status of a trusted flagger.” 

Dimitra Voulgari, OPAP

Petri Lahesmaa, Senior Consultant to Veikkaus, EU Affairs, Finland looked at the foreseen provision of enhanced consumer protection and know-your-business-customer requirements. ”The DSA is an opportunity to rectify the situation that allows illegal actors to ignore Article 5 of the Electronic Commerce Directive with impunity. The absence of an obligation for service providers to verify the identity of their business customers, and the resulting anonymity, make it nearly impossible to bring civil or criminal actions to stop online harms. Fraudulent businesses include operators of scam websites and operators of online services distributing illegal gambling, substandard or falsified medicines, sexual abuse material, counterfeits, malware, etc. Know your business customer (KYBC) – obligations can be a real and tangible solution to effectively tackle illegal content online. ” 

Petri Lahesmaa, Senior Consultant to Veikkaus, EU Affairs, Finland