The court, the Cour de Cassation, said the "limits on gaming as a special or exclusive right, cannot be justified," in France, adding that restrictions can be used only to block gambling companies from "criminal or fraudulent" activities by "channeling them through controllable avenues."
France has two months to respond to the commission's concerns.
The case against Zeturf, a Maltese Internet gambling company,is now being sent back to a Paris appeals court for a rehearing, and it could take up to a year for the case to come back to court, according to legal experts.
Zeturf was ordered by the appeals court to suspend its operations in France on January 4 or face daily fines of €50,000, or $68,800, after a complaint was filed by Pari Mutuel Urbain, or PMU, the operator of betting on horse racing, sports, lotteries and other forms of gambling.
European Troubles Too
The European Commission last month threatened to sue France, Sweden and Greece for blocking foreign betting companies. Ending such monopolies could help companies like Bwin Interactive Entertainment of Austria and Stanley Leisure, the British casino operator owned by Genting.The judges at the Cour de Cassation also said the appeals court had not sought to discover whether the French government was upholding the monopoly simply to "increase state revenues."
Sports betting and gambling are state-owned monopolies generate a lot of revenue for the government.
According to Guillaume de Roquemaurel, the Eturf president, the ruling was "shocking." There is no monopoly on information," he said.
Eturf, which Roquemaurel says has no ties to Zeturf, will appeal the decision.
According to Charlie McCreevy, the EU financial services commissioner, the government's goal is to foster competition where gambling is allowed, not force countries to legalize it.
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