win had challenged Portugal’s national gambling monopoly and its extension to online wagering. The ruling today by the European Court of Justice could affect at least six pending EU cases, one of which involves a suit by Ladbrokes Plc against the Netherlands.
The EU’s highest court today upheld its view in previous cases that the restrictions in Portugal may be justified to meet certain policy goals, such as fighting crime, as long as they aren’t discriminatory and don’t go beyond what is necessary to do achieve their aim.
“The fight against crime relied on by Portugal may constitute an overriding reason relating to the public interest that is capable of justifying restrictions in respect of operators authorized to offer services in the sector concerning games of chance,” the Court of Justice in Luxembourg ruled.
Thomas Talos, a lawyer for Vienna-based Bwin said the case shows there needs to be a political solution to disparate online gambling rules within the 27-nation EU. “The ruling is a clear message to politicians to finally provide a regulatory framework for online gaming,” Talos said after the ruling. “Market reality shows that an Internet monopoly in the 21st Century does not work.”
While Portugal’s monopoly is a restriction on companies’ freedom to provide services in the EU nations, it “may be justified by overriding reasons relating to the public interest,” the court said. The lack of harmonized EU rules on games of chance means that the region’s countries “are free to set the objectives of their policy in that area.”
Bwin fell for the first time in three days, declining 7.9 % to 26.50 euros at 12:03 p.m. in Vienna. The European Association of State Lotteries said the ruling was a “great victory,” because it “confirms” that national governments can grant online monopolies to state operators and ban foreign competitors.
Portugal’s gambling authority had fined a unit of Bwin 74,500 euros ($107,000) for concluding an August 2005 sponsorship deal with a Portuguese football league. The agency in Lisbon said the deal breached the nation’s exclusive gambling rights.
Bwin had argued Portugal discriminates against private companies and goes too far to control the risk of gambling addiction. A Portuguese court, which had sought the EU tribunal’s guidance in the dispute, will give a final ruling in line with today’s judgment.
The case is C-42/07 Liga Portuguesa de Futebol Profissional (CA/LPFP) and Baw International Ltd. v Departamento de Jogos da Santa Casa da Misericordia de Lisboa.