Top EU court backs gambling monopolies

2011-09-16

Reading time 1:31 min

(Belgium).- European highest court delivered a blow to online betting companies seeking to break national monopolies, ruling that Austria can bar foreign gaming firms from operating in the country. Several online gambling companies have launched legal challenges against a number of EU countries in an effort to break open a lucrative market with revenues of 80 billion euros (us$ 110 billion) in 2010. They have had little success.

The Luxembourg-based EU Court of Justice ruling came in a case involving two Austrians who set up a multinational group -- bet-at-home.com -- whose members included several Maltese subsidiaries holding Maltese licences. The two, backed by the Maltese government, said Maltese online gaming rules were adequate to protect consumers.

But Austrian authorities disagreed and accused the two of breaking the country's gaming laws. The Austrian court hearing the matter sought advice from the Court of Justice on the issue.

The EU court said the fragmented regulatory system across the 27-country European Union meant member states were entitled to do what they considered necessary to protect their citizens.

"When assessing the proportionality of a monopoly, the national courts are not required to take into account the monitoring and control systems regulating companies established in another member state," it ruled this week.

"A member state may legitimately wish to monitor an economic activity which is carried on in its territory, and that would be impossible if it had to rely on checks made by the authorities of another member state using regulatory systems outside its control."

European Lotteries, an umbrella group for 78 licensed national lotteries in 43 countries across Europe, welcomed the decision. "Those that keep on calling for 'mutual recognition' of gambling licences between member states have now been dealt the final blow," Friedrich Stickler, president of the group, said in a statement.

The European Gaming and Betting Association (EGBA) lobby group, whose members include Britain's Bwin.party and Malta-based Unibet (UNIBsdb.ST) and Digibet, said it was time for EU-wide measures.

"Clearly the legal situation and fragmentation of the Internal Market for online gambling is unsustainable and requires urgent action from the European legislator to adopt an EU framework for the sector," EGBA Secretary-General Sigrid Ligne said.
The European Commission will decide next year whether to propose any reform.