Saturday, October 14, 2006

The European Commission today threatened legal action against France, Italy
and Austria for restricting sports betting and gambling services, including
banning foreign online gaming and casino operators. Its move, bringing to
nine the number of EU countries whose gambling legislation is under
investigation, was hailed as a shot in the arm by the ?50bn European betting
sector - several of whose leading executives have been prosecuted for
offering cross-border services. Didier Dewyn, secretary general of the
European Betting Association, said: "How long must EU-licensed and regulated
operators endure legislation which causes wrongful financial harm and
deprives their executives of even the basic right to travel freely in EU
member states? "We hope these new proceedings will put an end to the
witch-hunts against private EU licensed operators." His comments follow last
month's arrest in Monaco by French police of the two co-chief executives of
Austrian online operator bwin on charges of illegally offering gambling
services in breach of national laws guaranteeing a shared monopoly to local
operators PMU and la Francaise des Jeux. There are 2000 illegal casino
websites in France. Charlie McCreevy, internal market commissioner, said the
"official request for information," the first step in putative legal
proceedings, merely sought to discover whether national laws complied with
EU treaty rules on the free movements of services. He said he had received a
large number of complaints from operators.

Mr McCreevy, an ultra-liberal who, with fellow commissioners, initiated a
series of infringement proceedings against EU member states today to enforce
the single market, said the decision did not call into question national
monopolies as such nor push for the liberalisation of gambling services.

The commission, which gave the governments two months to respond, said
countries were still entitled to protect the "general interest" provided
that any restrictive measures were necessary, proportionate and
non-discriminatory.

In a key ruling, used by several German federal states to ban bwin and other
online operators, the European Court of Justice has said such measures need
to be "consistent and systematic" and has allowed restrictions aimed at
supporting public order (the prevention of fraud) or combatting gambling
addiction.

Germany, Holland, Hungary, Denmark, Finland, Sweden and Italy are already
under investigation.

In a sideswipe at French protectionism, Mr McCreevy questioned how the state
could ban European online operators access to the sport and horse-race
betting market in order to prevent addiction when "the French sport betting
market continues to expand and offer more choice and opportunity for
consumers to bet."

France, whose casinos turn over ?17bn a year, was separately told to amend a
controversial 2005 decree, part of the government's "economic patriotism",
restricting foreign investors in key sectors such as defence on public
security grounds. It also applies to casinos.

Italy, which banned overseas online betting in February, was warned by the
commission that its restrictions on "legitimate" operators were
disproportionate - "particularly in the light of the expanding sports
betting market which appears reserved to domestic operators."

Liverpool-based Stanley International Betting, which filed a complaint
against the Italian authorities in February, welcomed the opening of
infringement proceedings which follow a November 2003 ECJ ruling in its
favour.