De Lotto Prevails over Ladbrokes in Dutch Supreme Court

The Dutch Lottery on Friday received the decision it wanted from the Supreme Court of the Netherlands in its summary proceedings against British gaming company Ladbrokes. The Supreme Court put to rest a court battle that spanned more than two years by ruling that Ladbrokes must cease taking bests from Dutch residents.

Ladbrokes has been arguing both in its summary and main proceedings that the gambling monopoly enjoyed by De Lotto in the Netherlands violates the free movement of services throughout Europe, but the Supreme Court has rejected that plea, ruling instead that the restrictive gaming policies of the Netherlands are indeed consistent with European law.

The court says that no gambling provider may offer services to Dutch residents without a Dutch license, and Ladbrokes has been ordered to implement geolocation systems and other measures to insure that its Web site cannot be accessed by Dutch residents.

Several other European gaming companies have legal cases tied up in the Dutch court system, but this ruling from the highest court in the country should serve as an affirmation that the law of the land prohibits foreign operators from offering services in the Netherlands.

The Supreme Court's decision is consistent with the opinion delivered by the Advocate General three months ago.

The ruling is quite a decisive blow to Ladbrokes' efforts, but the battle still carries on in the main proceedings against De Lotto, even though the deck does seemed stacked against the company in that case too.

In June 2004, a court in Arnhem handling the main proceedings between De Lotto and Ladbrokes issued an interlocutory ruling that Dutch gaming laws are inconsistent with their self-defined goals of limiting fraud and preventing gambling addiction. The court also declared the laws to be inconsistent with the rules set forth by the European Court of Justice in its Gambelli decision. The decision was not final, however, and the court requested that De Lotto solicit a reaction from the Dutch Minister of Justice Piet Hein Donner to see whether he could justify the country's restrictive gambling policies.

In the fall of 2004, the minister offered his reaction, arguing that the Dutch restrictions on foreign remote gambling operators are indeed valid. The court is scheduled to return a final ruling on the main proceedings in March, but sources close to the case are certain that the decision will be delayed.

It is not clear what sort of impact the decision in the summary proceedings will have on the main proceedings.