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Maltese Company Files Complaint Against France With EC

23 September 2005

Maltese Internet betting company Zeturf Ltd has responded to a French tribunal's demand that it stop offering wagers on French horse racing by launching an appeal of the ruling and filing a formal complaint with the European Commission. The Maltese government has also responded vehemently against the French ruling. Prime Minister Lawrence Gonzi has appointed a task force of four senior members of his Cabinet to monitor the situation and the Malta Lotteries and Gaming Authority has vowed to lend its full support to Zeturf.

On July 8th a District Court in Paris heard French betting monopoly Pari Mutuel Urbain (PMU)'s complaint that Zeturf's acceptance of wagers on French horse races violates French law. The court agreed that according to a horse betting statute from 1891, only companies authorized by the French agriculture ministry may offer such bets. A decree from 1997 also states that only companies who offer wagering on French horse races through PMU are permitted to offer their services via remote means. The court therefore issued an interim order, fining Zeturf 15,000 euros per day unless it stops taking bets on French races.

The case was actually heard with Zeturf in absentia. The Matla-based company claims that it received the writ only two hours before the case was to be heard in Paris, making it possible for a representative of the company to be present at the hearing. On July 22nd Zeturf filed an appeal of the interim order on both substantive and procedural grounds. The copmany has not ceased accepting wagers on French horse races.

On September 9th Zeturf lodged a complaint against France and PMU with the EU Commission. The company insists that the French tribunal's order is not compliant with EU laws regarding the free trade of goods and services across the EU. "There is very substantive and clear case law within the EU on this very specific subject," said a Zeturf spokesperson. "We are hopeful about the prospects of our complaint to the EU Commission."

Dr. Anthony Axisa-- a director of Malta's Lotteries and Gaming Authority, which is the remote gambling licensing body for the island—agrees. He stated, "[Malta's] regulations are in complete harmony with the principle of freedom of movement of services enshrined in the EC Treaty."

Zeturf's complaint joins seven others already pending before the EC against Member States that restrict their markets from foreign operators. Private remote gaming operators have already filed similar complaints against Germany, the Netherlands, Sweden, Hungary, Italy, Greece and Finland. Internal Market Commissioner Charlie McCreevy of Ireland has been leading an effort in the EC to launch infringement proceedings against these Member States, but a lack of consensus among the commissioners has prompted the commission to postpone the launch of proceedings until at least its next meeting in October—if they are to be launched at all.

McCreevy says that action would only be taken following a debate between commissioners. According to news publication Europe Information Services, as of July 26, about eight of the 25 other commissioners were known to oppose removing national gambling monopolies in these states, including EC President Jose Manuel Barroso of Portugal, Development Commissioner Louis Michel of Belgium and Transport Commissioner Jacques Barrot of France.

Meanwhile, Malta's government has pledged to do all it can to support Zeturf and its 97 other remote gaming operators who are already licensed or completing the licensing process. Remote gaming operations generate about one billion euros worth of turnover for the island.

Dr. Axisa explained, "In the LGA's case, this extends much more beyond Zeturf. We have many other licensees and we want to make sure that they are adequately protected from these kinds of attacks. We will provide them that protection. The LGA's support is in the form of protecting the legitimacy and reputation of the jurisdiction, but we will not intervene directly in the case."

Malta's Prime Minister Lawrence Gonzi considers the situation such a high priority that he has appointed a task force with four senior members of his Cabinet, including both Home Affairs and Foreign Affairs.

"When we have an attack on one of our licensees, basically telling them you cannot offer your services from one member state to another member state, we fear that the issue becomes a matter of public policy," said Dr. Axisa. "In a sense, they are also attacking our legitimacy in issuing these kinds of licenses, so of course the government is very concerned and will do everything in its power to see that our jurisdiction is not encroached."

"It is monitoring the situation and studying court options as well as diplomatic, political and legal policies, and at some point when things come to a head, I think the government will play an important role."

Maltese Company Files Complaint Against France With EC 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