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Infringement Procedures on European Commission Agenda

20 July 2005

Discussion about whether to launch legal action against seven Member States who have questionable online gambling regulations was on the agenda of a European Commission meeting today, but no official statement has yet been made regarding whether the subject was even broached by the Commissioners. The topic was originally slated to be dealt with at last week's meeting but was shelved because attention needed to be given to terrorism following the bombings in London on July 7th.

The Commissioners were to discuss whether or not to initiate infringement procedures against the seven Member States-- Germany, Netherlands, Sweden, Hungary, Italy, Greece and Finland-- because several licensed, independent betting and gaming operators have filed complaints to the Commission. All of the complaints generally allege that these seven Member States uphold regulatory structures for gambling that are inconsistent with EU trade laws.

In most cases, operators based outside the states complained that the monopolies restrict free trade by giving preferential treatment to their own domestic (mostly state-owned) gambling monopolies and prohibiting foreign-based operators from servicing the states. Foreign operators are also adamant that the regulations serve only to benefit the state government's tax revenue stream.

The state governments on the other hand argue that their policies serve to protect players and maintain social order.

Both sides believe the European Court of Justice's ruling in the 2003 Gambelli case supports their own arguments. The operators point out that the Gambelli ruling states that gambling restrictions must limit betting activities in a consistent and systematic way, and that a member state may not encourage consumers to participate in domestic games while at the same time prohibiting them to participate in foreign games.

On the other hand, the governments and high courts of these states generally note how the Gambelli ruling allowed Italy to determine for itself if its monopolies really do serve mainly to protect public order rather than filling public coffers. State courts have issued rulings that typically proclaim the states' authority to restrict those services if they have legitimate concerns about the societal harms of gambling. For instance, last month a Swedish court ruled-- in a case involving Ladbrokes' attempt to obtain a license to operate in Sweden-- that Sweden's regulations protect public order because they prefer enterprises that are considered to offer better consumer protection than the foreign companies whose products are likely riskier.

The European Commission was also scheduled today to issue a Reasoned Opinion against Denmark. The Commissioners have already investigated the Danish gambling system and are thought to be ready to announce their conclusion on the legality of the system.

If the Commissioners were unable to discuss the gambling issue then there will not be another opportunity until the next meeting, which is in October.

Noticeably absent from the list of Member States under fire is France, which also upholds a betting monopoly. As of yet, no operator has filed a complaint against France with the European Commission.

Infringement Procedures on European Commission Agenda is republished from iGamingNews.com.
Bradley Vallerius

Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com
Bradley Vallerius
Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com