EU Court Opens Market for More Online Gambling Competition
Government-run online gambling sites in the European Union no longer have a monopoly -- as a court this week overruled a law Italy used to keep out foreign Internet gaming firms.
The European Court of Justice in Luxembourg ruled Italy can't use its law to stop gaming companies licensed in other EU nations, including the U.K.'s Stanley Leisure Plc, from taking bets in the country, as the European Union's Treaty of Rome provides for freedom of sales of services throughout continental Europe.
Gambling monopolies in France, Germany and other countries have been criticized by companies for blocking their cross-border online gaming business. The stock price of online providers, including Austria's Web bookmaker Bwin Interactive Entertainment AG, rose immediately after the court decision, which may remove restrictions on the $66 billion industry there.
According to Lode Van Den Hende, a lawyer in the Brussels office of Herbert Smith, the decision, overall, is very good now for the gaming operators. "If this had gone against them they could have closed shop. This is a step further toward a liberalization of the European gambling markets,'' Van Den Hende said.
The court prohibited the use of Italian law in particular in cases where foreign betting companies were refused the required license by the Italian government.
``The Italian penalties for the collecting of bets by intermediaries acting on behalf of foreign companies are contrary to EU rules," the 11-judge panel of the court said.
According to the firm of Genting Bhd of Malaysia, which has been litigating against the Italian law, this week's ruling was a ``landmark'' that will put increasing pressure on governments and the European Commission to end protectionism in Europe.
No More Protectionism
``We think it's time that the commission and national lawmakers act now to end this protectionism,'' said Adrian Morris, deputy director-general of Genting's European unit.
According to Christopher Bell, chief executive of Ladbrokes, Europe "has already seen Italy and Spain move to open up their betting markets and this judgment supports our view that the policies of many EU governments are inappropriate and disproportionate in restricting free and fair competition.''
The firm Bwin added that the decision was a ``milestone toward the opening of the European gambling market -- state monopolies were not in compliance with EU legislation."
The court confirmed, however, that countries have the right to decide on the number of operators allowed on their market, Winfried Wortmann, president of European Lotteries, the association representing state lotteries, said in a statement e-mailed to Onlinecasinocrawler.com.
The commission last year started probing 10 EU countries including Italy, Germany, the Netherlands and France for discrimination by barring rivals from offering the same services as their state lotteries. They face being taken to the EU court depending on the outcome of the probe.
Shares in Bwin rose two euros, or eight percent, to 27 euros in Vienna, and shares in Unibet advanced as much as nine kronor, or 5.4 percent, to 177 kronor in Stockholm. Ladbrokes shares gained 2.3 percent to 405.75 pence in London. Sportingbet Plc, the online bookmaker which owns Paradise Poker, advanced 2.25 pence, or 4.6 percent, to 51.25 pence.
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