On the 9th July 2014, the Council of Europe adopted the Convention on the Manipulation of Sports Competitions, following the taking of a vote during a meeting of the Committee of Ministers. 43 states voted in favour of adoption. Owing to the circumstances, Malta voted against the adoption of the Convention. While Malta has always agreed with the objective of the Convention to combat match-fixing, it held the view that the sports betting provisions have gone beyond the scope.
The Convention will now be opened for signature of the various States on the 18th September in Macolin, Switzerland.
Meanwhile, Malta has filed a request for opinion of the Courts of Justice of the European Union under the procedure set out in Article 218 (11) of the Treaty of the Functioning of the European Union (TFEU), asking the Court to clarify whether the envisaged Convention, and in particular the definition of “illegal sports betting”, coupled with the betting provisions, Articles 9 and 11 thereof, are compatible with the Treaties and in particular, with Articles 18, 49 and 56 TFEU.
Malta, represented by the Lotteries and Gaming Authority (the LGA) and other relevant local entities, joined the drafting negotiations of a draft Convention on the Manipulation of Sports Competitions in March 2013 and participated actively until January 2014 when the drafting plenary group closed. Thereafter, it continued to take an active interest in the different political processes which followed until adoption, in order to clearly deliver and maintain its position on the matter.
While Malta has always agreed with the objectives of this Convention that are principally aimed to combat manipulation and fraud in sports, it has maintained reservations on the betting provisions which in its view, have gone beyond the objectives and scope of the Convention.
Since the beginning of the drafting process, Malta has objected to the definition of “illegal sports betting” (Article 3.5.a) which is linked to the notion of national authorisation and the jurisdiction where the consumer is located. Through its application, sports betting activity in any one state shall be considered illegal if the applicable law of the jurisdiction of the consumer of the betting service considers it to be so. Thus, the definition does not specifically target unregulated sports betting that can entice the manipulation of sports and fraud, which is the subject of the Convention. On the contrary, it targets operators which are merely ‘not allowed’ in the jurisdiction of the consumer, with the consequence that the definition encompasses not only unregulated operators but also regulated operators in Contracting Parties to the Convention.
Further provisions in the Convention relating to betting (Articles 9 to 11) set rules to be imposed on “illegal” betting operators. Article 11 in particular lays down a number of measures which may be taken against “illegal” betting operators. Operators operating across borders which are legally compliant and subject to the monitoring and control measures foreseen by the draft Convention, may therefore be deemed illegal by the law of the country of the consumer and blocked through a variety of methods allowed by the Convention.
This clearly misses the paramount objective of the Convention to holistically address the risks to sports integrity, and has the unnecessary and harmful effect of clamping down on regulated operators. It also has the consequence of requiring Contracting Parties to act against each other’s duly regulated operators. The net effect is an unwelcome divergence from the Convention’s objectives and an unnecessary intrusion into the regulation of betting, with negative consequences for regulated operators and legitimate regulated betting industries.
Malta was always consistent as regard its objections on these provisions from the start of the negotiations. During the Standing Committee meeting that took place in Baku on the 23rd May, Malta made a proposal for the amendment of the definition. Although it gained some support, this proposal was not accepted. Malta made further proposals during the Gr-C meetings of the Council of Europe on 17th June, 1st and 8th July respectively, which were rejected. Consequently, in the circumstances Malta had no option but to vote against the adoption of this Convention, while making clear that it continues to fully support the objectives.
On a European Union level, Malta has always maintained the view that the definition of “illegal sports betting” and the other betting provisions in the Convention are incompatible with the Treaties. The gaming industry is not yet regulated within the EU and discussions regarding the best approach are still underway in various fora. The provisions of the Convention relating to betting may lead to harmonisation of an area that is not yet harmonized at EU level, thus going beyond the scope of the Convention itself as it is not the appropriate instrument to deal with these matters.
Malta declared these reservations during the negotiations of the Convention. The European Commission, which received a mandate to participate in the drafting negotiations, tried to pacify the various positions of the Member States. Despite this as well as various attempts from Malta, the majority of the countries, including EU Member States, were in favour of maintaining the definition that makes reference to the country of the consumer and the other betting provisions.
Malta has now filed a request under the Article 218 (11) TFEU procedure to the Court of Justice of the European Union. By means of this procedure, Malta hopes to clarify amongst other arguments, whether the definition of “illegal sports betting” in the Convention, as well as the other articles ancillary to the definition, are compatible with the provisions of the Treaty.
Malta holds that the envisaged Convention seeks to introduce the regulation of the betting industry, which is not a settled matter in the EU. The Convention is thus an inappropriate instrument for the matter and is being used to bypass the correct procedures under the Treaty, which can also impact on the future of the passing of regulation in the sector. The definition which has been introduced in the Convention relates exclusively to the licensing and regulation of operators, which is not the subject of the Convention. The question of legality of the gaming industry has to be viewed in line with the general principles guaranteed by the Treaty and in particular with what is necessary, suitable and proportional.
Malta, its government and the LGA have always prioritised the interests of its successful gaming industry. The gaming industry is effectively regulated and Malta will continue to defend its operators’ interests in the face of this and similar attempts against it.