ROADMAP. A. Context and problem definition

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1 ROADMAP TITLE OF THE INITIATIVE Recommendation on best practices in the prevention and combatting of betting related match fixing LEAD DG RESPONSIBLE UNIT MARKT DATE OF ROADMAP 12/2012 This indicative roadmap is provided for information purposes only and is subject to change. It does not prejudge the final decision of the Commission on whether this initiative will be pursued or on its final content and structure. (1) What is the political context of the initiative? A. Context and problem definition (2) How does it relate to past and possible future initiatives, and to other EU policies? (3) What ex-post analysis of existing policy has been carried out? What results are relevant for this initiative? 1) Political context The Commission has on a number of occasions fully acknowledged the seriousness of the problems related to match fixing that are affecting the ethics and integrity of sport. Betting related match fixing is a specific type of fraud that affects the interests of a number of stakeholders including sport organisations, sportspeople, punters (consumers) and regulated gambling operators. The Communication 'Towards a comprehensive European framework for online gambling', adopted on 23 September 2012, identified 5 key action areas to address the challenges in the EU, including the area of sports integrity with focus on the prevention of betting related match fixing (manipulation of the outcome of an event that occurs with either passive or active involvement of betting operators). These action areas were identified following a substantial evaluation of the responses to the 2011 Green Paper on online gambling which solicited a range of responses from Member States and from interested stakeholders (online and offline gambling industry, national parliaments, payment and media service providers, internet service providers, citizens, associations, trade unions, academia and sport entities). The Recommendation on best practices in the prevention and combatting of betting related match fixing is one of the initiatives proposed in the Communication for action at EU level regarding the protection of interests of consumers (punters), sport organisations, sportspeople and regulated gambling operators. This initiative takes into consideration the responses to the Green paper as well as the calls by the European Parliament and the Member States on the Commission to act in this area. (2) Relation to past and future initiatives/other EU Policies In the Communication on Developing the European Dimension in Sport 2011, the Commission addressed the issue of sports integrity and has pledged to seek for possible solutions for addressing match fixing that runs contrary to the principle of fairness in sporting competitions (one of the objectives of EU action under Article 165 TFEU). Furthermore, the Commission adopted in June 2011 a package of measures which cover the fight against corruption at EU level and which includes corruption in sport, match fixing in particular. The so-called anticorruption package consists of the Communication on fighting corruption in the EU, the Commission Decision establishing this EU anti-corruption reporting mechanism, the Report on the implementation of Council Framework Decision 2003/568/JHA on combating corruption in the private sector, and a Report on the modalities of EU participation in the Council of Europe Group of States against Corruption (GRECO). The European Parliament has also given consideration to the issue of match fixing, namely in its 2009 Resolution on the integrity of online gambling (the 'Schaldemose Report'), the 2011 Resolution on online gambling in the Internal Market (the 'Creutzmann Report'), and the 2012 Resolution on the European Dimension in Sport (the 'Fisas Report'). The Council first dealt with the fight against match fixing in the EU Work Plan for Sport and in November 2011 adopting Conclusions on combating match fixing. In these conclusions, Member States, the Commission and relevant stakeholders are invited to forge close cooperation in order to better protect the integrity of sport. Besides the EU, on 28 September 2011, the Committee of Ministers of the Council of Europe adopted the Recommendation on the promotion of integrity of sport against manipulation of results, notably match fixing. On 15 March 2012, the Council of Europe's Conference of Ministers Responsible for Sport meeting in Belgrade invited the Enlarged Partial Agreement on Sport (EPAS) to launch the negotiations, in coordination with the EU,

2 on a possible international legal instrument (Convention) against the manipulation of sports results, notably match fixing. Negotiations on the Convention were launched in autumn 2012, following the meeting of the Committee of Ministers of the Council of Europe on 13 June The proposed initiative does not concern all forms of match fixing but only betting related match fixing. The reason for it is that that only the latter one proves strong links to internal market policies in terms of free provision of gambling services (restrictions justified on sports integrity grounds) and of other related services such as sponsorship and advertising (restrictions imposed on betting operators acting as sponsors; restrictions on media services providers in terms of advertising for betting services). Sports integrity in general, including non-betting related match fixing, is being addressed by initiatives based on Art 165 TFEU, in particular the Commission participation in negotiations of the Council of Europe Convention against manipulation of sports results. (3) Ex-post analysis of existing policy/results The extensive feedback received from stakeholders within the public consultation (Green paper on online gambling), from the experts' seminars (thematic workshops) that accompanied the public consultation, from the EP and Member States (see point 2) has allowed for the conclusion that more anti-match fixing efforts are needed, especially in terms of cooperation between operators, sport bodies and state authorities. This should encompass a more efficient share of information and intelligence between all parties concerned (operators, sport bodies, regulators), both at national level and across borders, the creation of comparable minimum conflict of interest provisions in the EU and an efficient exchange of good practices in the prevention of betting related match fixing. The number of sport betting fraud alerts over the past few years as well as the fact that in a number of Member States no robust measures are in place to combat betting related match fixing (such as conflict of interest rules and reporting on suspicious sporting and betting behaviour) confirm the need to act in this area. According to its Integrity Report 2010, in 2010 the European Sports Security Association (ESSA) identified 58 incidences across its members that were deemed to be irregular. In 2011 there were 69 alerts of suspicious betting patterns to the relevant sports governing and gambling regulatory authorities. The European Lottery Monitoring System (ELMS), founded in 1999, investigated 5000 matches between January and April 2011 and raised 93 alerts. Interpol has conducted four soccer gambling operations (SOGA) over the past years targeting illegal football gambling across South-East Asia. These operations led to more than 7,000 arrests, closure of illegal gambling dens and seizure of close to $27 million in cash.. What are the main problems which this initiative will address? Lack of coordinated anti-match fixing efforts in and across Member States (between betting operators, sport bodies and gambling regulators and other MS authorities such as law enforcement agencies). Lack of efficient exchange of good practices in the prevention of betting related match fixing (between MS). Insufficient mutual reporting and follow-up actions of suspicious activities by sport bodies, operators and regulators, including the lack of gathering of reliable figures on the scale of the problem. Non-existence of comparable minimum conflict of interest provisions across Member States, such as betting bans for sport people and sport officials as well as the exclusion of certain events from betting, limitations of sponsorship/ownership by betting operators of sport clubs/events. Who will be affected by it? Member States authorities given the need to ensure cooperation between all parties concerned, including between national gambling regulators and other authorities such as law enforcement agencies. Betting operators and sport bodies given the need to introduce measures to cooperate and communicate more efficiently, both with each other and toward national authorities. Individual sportspeople (athletes, match officials, sport managers) as well as punters (consumers). Is EU action justified on grounds of subsidiarity? Why can Member States not achieve the objectives of the proposed action sufficiently by themselves? Can the EU achieve the objectives better? The Green paper consultation has clearly shown that the various challenges posed by the rapid development of the online gambling market can't be efficiently addressed by Member States individually. Approaches to betting related match fixing vary considerably between the Member States. Currently, anti-match fixing rules and mechanisms exist to varying degrees across the Member States and sport disciplines. In some countries cooperation and communication between sport bodies, betting operators and regulators is well developed whilst in others nothing of that kind exists. 2

3 This great disparity and lack of communication between Member States on the way match fixing is dealt ultimately cause difficulties in enforcing national systems created to protect sport organisations, sportspeople, punters (consumers) and regulated gambling operators from the manipulation of results of sport competitions. By way of example, sport betting bans, including the exclusion of certain events from betting applicable in one Member State, cannot be efficiently enforced in another Member State where such rules do not exist or do exist, but in a varying degree. In other words, competitions identified by one Member State as posing match fixing risks such as qualifying rounds of local tennis tournaments or low national football divisions are excluded from betting in that country. However, there are no mechanisms in place to ensure that bets will not be placed with operators providing their services in another Member State. This cross-border dimension is of course more relevant in the online gambling environment. Similar problems occur in relation to enforcement of national match fixing alerts identified by national authorities. As regards the scale of the problem, the Commission services note the lack of sufficient data since i) in a number of Member States, given the absence of anti-match fixing rules, no data are collected ii) in a high number of cases online betting related match fixing seem to occur through gambling operators established in unregulated markets outside the EU. Statistics collected over the past few years show very few confirmed match fixing cases in which regulated operators were involved. Cases originating outside regulated markets cannot be systematically monitored and, therefore, there is a real lack of information concerning the scale of match fixing at global level. The Commission's actions on administrative cooperation, foreseen in the Communication on online gambling, could help Member States to better understand each other's regulatory frameworks, share good practices and improve convergence in tackling common problems. In addition, greater and long term collaboration between Member States could enhance the EU capacity to more effectively tackle the international dimension of the match fixing phenomenon.. What are the main policy objectives? B. Objectives of the initiative Coordinate anti-match fixing efforts in and across Member States (between betting operators, sport bodies and gambling regulators and other MS authorities such as law enforcement agencies), Promote and facilitate exchange of good practices in the prevention of betting related match fixing (between MS). Address insufficient mutual reporting and follow-up actions of suspicious activities by sport bodies, operators and regulators, including the lack of gathering of reliable figures on the scale of the problem. Develop anti-match fixing measures such as comparable minimum conflict of interest provisions across Member States( e.g. betting bans for sport people and sport officials), the exclusion of certain events from betting and limitations on sponsorship/ownership by betting operators of sport clubs/events. Do the objectives imply developing EU policy in new areas? No C. Options (1) What are the policy options (including exemptions/adapted regimes e.g. for SMEs) being considered? (2) What legislative or 'soft law' instruments could be considered? (3) How do the options respect the proportionality principle? Based on the responses to the Green Paper, Council conclusions and Presidency reports, the resolution of the EP and the opinion of the ESC, a gambling-specific horizontal legislative initiative does not seem appropriate. A legislative initiative focusing only on the prevention of betting related match fixing does not seem, at this point in time, an appropriate solution either. At this stage, a Recommendation seems the right response and the instrument to meet the objectives in an adequate and timely manner. The Commission will carry out a due assessment of its take-up and effectiveness. Nonetheless, the option of developing a legislative instrument will be discussed in the impact assessment as well, not least in view of the outcome of negotiations of the Council of Europe convention and of the Commission's actions on administrative cooperation (as foreseen in the Communication of 23 Oct 2012). In terms of content of the proposed initiative, the options to be examined in the IA will include, inter alia, 3

4 i) certain minimum principles of reporting of suspicious betting activities as compared to detailed rules for mutual reporting between the actors concerned including data protection arrangements, ii) conflict of interest provisions bearing a different level of detail such as betting bans of different scope, but also rules for efficient monitoring and enforcement of such provisions. The Commission will evaluate the implementation of the Communication on online gambling and the application of the measures by Member States and stakeholders within 2 years of adoption of the Communication and assess whether the actions provide an adequate EU framework for online gambling or if additional measures are required. D. Initial assessment of impacts What are the benefits and costs of each of the policy options? Developing a Recommendation, which is currently the most likely option, would allow the Commission to draw closely from the mix of existing measures and to take into consideration the different national situations (differing online gambling legislation, regulatory experience). It would provide the appropriate response to adequately protect all stakeholders concerned throughout the EU in an online cross-border environment. The Recommendation would provide a set of common principles for the prevention of betting related match fixing in the EU. It is believed that through the creation of common principles at EU level the EU's capacity to more effectively tackle the international dimension of the phenomenon will increase. Could any or all of the options have significant impacts on (i) simplification, (ii) administrative burden and (iii) on relations with other countries, (iv) implementation arrangements? And (v) could any be difficult to transpose for certain Member States? The proposed Recommendation should help, in particular through the exchange of best practices, to reduce unnecessary administrative burden for those regulators that would have to individually set up anti-match fixing systems. Systems of mutual reporting and sharing of intelligence could equally contribute to cutting the red tape. The Recommendation should also help the objective of enhancing administrative cooperation amongst regulating authorities in this respect. The Recommendation might pose administrative or technical difficulties for those Member States who have so far only little experience in tackling betting relating match fixing in a systematic manner (administrative capacity, technical infrastructure). It could equally affect smaller betting operators and/or sport bodies since more would be required from them in terms of setting up of corresponding anti-match fixing mechanisms. (1) Will an IA be carried out for this initiative and/or possible follow-up initiatives? (2) When will the IA work start? (3) When will you set up the IA Steering Group and how often will it meet? (4) What DGs will be invited? 1) An IA is necessary for the proposed initiative since currently no complete picture of Member States' approaches to and experience in applying anti-match fixing measures is available. In some countries cooperation and communication between sport bodies, betting operators and regulators is well developed whilst in others nothing of that kind exists. Similarly, readiness and capacity of smaller betting operators and sport bodies to apply/set up anti-match fixing measures is currently not fully known. An IA assessment is necessary also given the different work streams and initiatives running in parallel (negotiations of the Council of Europe Convention, International Olympic Committee initiatives to tackle match fixing at global level). Assessing the outcome of these initiatives and the way they will fit in the framework/structure of the proposed Recommendation will be part of the impact assessment work. 2) 3 nd quarter of ) 1 st quarter of ) EAC, HOME, JUST, Connect, COMP, SG, LS. [ECFIN, ENTR], SANCO (1) Is any option likely to have impacts on the EU budget above 5m? (2) If so, will this IA serve also as an ex-ante evaluation, as required by the Financial Regulation? If not, provide information about the timing of the ex-ante evaluation. No E. Evidence base, planning of further work and consultation 4

5 (1) What information and data are already available? Will existing IA and evaluation work be used? (2) What further information needs to be gathered, how will this be done (e.g. internally or by an external contractor), and by when? (3) What is the timing for the procurement process & the contract for any external contracts that you are planning (e.g. for analytical studies, information gathering, etc.)? (4) Is any particular communication or information activity foreseen? If so, what, and by when? 1) i) Responses to the Green paper consultation, ii) Feedback received from experts in thematic seminars, iii) EAC Study on how match fixing is tackled under national criminal laws, 2) Internally through meetings with stakeholders/experts, meetings of the Expert Group on gambling (to be established following the Communication on online gambling), externally through e.g. the on-going EAC Study on sport betting rights and other studies EAC may launch on specific issues such as scope of betting bans or match fixing reporting processes. 3) The tendering procedure for the EAC Study on sport betting rights has been launched; contract to be signed before the end of ) So far not. Which stakeholders & experts have been or will be consulted, how, and at what stage? A whole range of stakeholders have been consulted in the Green paper consultation, a follow-up consultation of certain stakeholders (depending on the individual issue) will be carried out. 5