The European Union Expands: What Really is the EU, and How Do EEA, the UK, The Channel Islands, and the Isle of Man Fit In?
By Tony Coles

European law is important in the regulation of gambling and must be taken into account in analyzing the rules of each of the countries which are members of the European Union (EU).

As we all know, cases decided by the European Court of Justice can have a very significant impact; the decision in Gambelli is well established, but it is expected that the judgment in the forthcoming Placanica case will be a landmark.

Also of great importance is the infringement cases started last year by the European Commission. These address whether the gambling legislation in an individual member state is consistent with EU law as established under the treaties mentioned below.

The effect of EU laws and rules is even more important given that the Union has just expanded by the accession of Bulgaria and Romania on January 1. Thus, the countries which are now members of the EU are Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

But what really is the European Union?

Is it "the United States of Europe?"

Put simply, the answer is "No;" it is not the "U.S. of Europe," and it is not helpful to think of the EU as if it were. This is because the European Union is not a federation (like the United States). Nor is it a nation-state like the U.S. So what is it? It is the creation of a series of treaties entered into between a number of wholly independent nations. Under these treaties, certain powers and responsibilities have been passed from the individual nations (known as "member states" in EU terms) to the European Union.

But each member state remains sovereign and could, in theory, withdraw from the European Union and recover the powers and responsibilities which it has transferred under the various treaties.

It is these treaties which established both the European Union and the principles of EU law. The treaties also establish the various political entities and bureaucracies which run the EU and which are empowered to build on the principles of EU law as set out in the treaties. All of the Member States are represented in the EU bureaucracy (and in particular in the European Commission which "runs" the European Union on a day-to-day basis) and thus have a say in the way in which the detailed rules have been developed from the principles laid out in the treaties.

The European Economic Area (EEA) is separate from the European Union but is closely allied to it for many purposes, including having a particular relevance to gambling regulations since, broadly speaking, it follows the EU principles on the free movement of goods and services. The EEA is also a "creature" created purely by treaty between its constituent member states which are the 27 European Union Members plus, in addition, Lichtenstein, Iceland, and Norway.

Thus, it is the treaties establishing European Union (and the EEA) which lay down the principles of the free movement of goods and services within the member states (and the freedom to set up business anywhere in the EU), but it is the European Union entities and the European Court of Justice which by the issue of directives and other pronouncements require member states to implement the details of EU law by enacting it their individual laws and regulations.

We also often see references to United Kingdom as well as references to Great Britain, England, and the British Isles. Many think that these are the same thing but this is wrong. All of them, along with the Channel Islands and the Isle of Man mean different things.

The United Kingdom (which is a Member State in the European Union) is the nation whose parliament sits at Westminster and the government of which is currently led by Tony Blair as the prime minister. It comprises England, Wales, Scotland, and Northern Ireland. But not all laws which are passed by the UK parliament in London necessarily apply to all of the UK. It is necessary to check each to see where it applies. For example, gambling law (including the Gambling Act 2005) applies to England, Wales, and Scotland, but only very peripherally to Northern Ireland, which has its own gambling regulation.

Great Britain is the physical island which comprises England, Scotland, and Wales, but it is not a nation. It is part of the UK.

England is also a geographical area and comprises that part of Great Britain which is not Wales or Scotland. We often see references to English law. This means all of the legislation from the UK parliament which applies in England (although much will, of course, also apply elsewhere in the UK) and the common law which has been built up over the centuries by the decisions of the English judges.

The Isle of Man is an island in the Irish Sea and is physically situated between Great Britain and Ireland. As a self-governing nation, the Isle of Man is not part of the United Kingdom and is not regulated by the UK parliament or by the UK government. It has its own parliament which makes its own laws and taxes, including its own gambling law. As a consequence, the Isle of Man is well known for its up-to-date online gambling legislation. The Isle of Man is not a member of the EU, or the EEA, but is associated for certain purposes.

The Channel Islands (which include Guernsey and Alderney) are a group of islands situated just off the northwest coast of France. Although they are physically closest to France they are not part of France, nor are they part of the United Kingdom. Like the Isle of Man, the Channel Islands are independent and self-governing and therefore make their own laws, including gambling law. Also like the Isle of Man, the Channel Islands owe certain allegiance to the British Crown and as a consequence the United Kingdom is responsible for their defense and for their external relations with other countries. But they are not regulated by the United Kingdom parliament or run by the United Kingdom government.

The Channel Islands are subdivided into two Bailiwicks; one covers Jersey and the other covers Guernsey, Alderney, and a number of smaller islands. Alderney is also well-known for its modern online gambling legislation, and Jersey has recently announced that it plans new gambling laws. The Channel Islands are not part of the EU or the EEA.

So EU law and the decisions of the European Court of Justice are all required reading to see how regulators and licensees in particular jurisdictions (including the UK) will be bound by, and have the benefit of, EU law.