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Setback for Online Gambling Companies in Europe

Written by:
Guest
Published on:
Dec/17/2009

By Nikki Tait in Brussels

The Financial Times UK

Efforts by online gaming and sports betting companies to break into European markets where gambling activity is restricted to state monopolies were dealt another setback in the top European court on Thursday.

In two Dutch gaming cases involving Ladbrokes, Betfair and the Dutch state monopoly De Lotto, a senior legal adviser at the European Court of Justice emphasised again that European Union member states can legitimately grant a single operator the right to run betting and gaming operations.

The gaming companies have argued that this breaches core EU principles on "freedom of movement". However, in a number of recent cases, the ECJ has made clear that it thinks the restriction is justified by the need to protect consumers and prevent fraud.

On Thursday, advocate-general Yves Bot also said that it would not be a breach of the Dutch legislation if the monopoly operator tried to sell its services by introducing new games and advertising - although he stressed that this would have to be done in a way that also met Holland's aim of preventing gaming addiction.

The advocate-general went on to confirm that member states do not have to recognise gambling licences which operators have obtained in other EU countries.

More helpfully to gaming companies, he said also said that, in principle, there did need to be a competitive tender procedure for the extension of gaming licences - but then added that it was up to national courts to decide whether this should be overridden for reasons such as "public order", the protection of consumers or the prevention of fraud.

Advocate-generals' opinions are not binding on the full court at the ECJ, but they are followed in the majority of cases.

European Lotteries, the trade association representing Europe's national lotteries, said it welcomed the confirmation of the court's previous jurisprudence. 

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