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Emily D. Swoboda

Monopoly Czar Gives an Iron Inch

20 June 2008

While De Lotto, a state-owned sports betting operator in the Netherlands, has long symbolized opposition to a liberalized European gambling market, its director, Tjeerd Veenstra, admits he is ready to dialog on the possibility of opening that very market.

"This battle has to be settled now," Mr. Veenstra told Interactive Gaming News in a telephone interview. "We cannot go on going to court. There are so many court cases all over Europe dealing with the same issues."

The battle to which Mr. Veenstra refers is the one De Lotto has been fighting for several years against private bookmakers in Europe.

The company and its lawyers, by suing commercial bookmakers for accepting bets from Dutch citizens, have tried -- and succeeded -- in blocking them from entering the Dutch gaming market.

Among the private operators taken to court by De Lotto is Ladbrokes, a high street bookmaker in the United Kingdom.

In summary proceedings in January 2003, the Arnhem District Court ruled in favor of De Lotto and ordered Ladbrokes to block Dutch citizens from its dot-com Web site, as well as shut down its Dutch-language site.

A decision on appeal at the district court in August 2005 also went to De Lotto, upholding the previous ruling.

The Dutch Supreme Court on June 13, 2008, upheld the 2005 ruling against Ladbrokes, prohibiting the company once again from taking bets in the Netherlands.

While Ladbrokes still cannot offer games to Dutch citizens, the Supreme Court has referred the case to the European Court of Justice in Luxembourg.

The court of justice, then, is to examine whether Dutch gaming law is in line with European Community law, namely Article 49 of the European Community Treaty, which guarantees the free movement of services among the member states.

To date, there are eight gambling-related cases from different member states pending at the court of justice: Austria, Belgium, France, Germany, Italy, Portugal, and now two from the Netherlands. Each of the cases involves a potential violation of Article 49.

Alan D. Littler, a doctoral candidate and researcher in gambling regulation at Tilburg University's Faculty of Law, in the Netherlands, explained to IGN that, generally, cases reach Europe's highest court in one of two ways: by referral from national courts, as with the aforementioned cases, or as the final step in infringement proceedings.

Referral cases arise when a national court, like the Dutch Supreme Court, has questions concerning how to deal with a case in the context of European law, said Mr. Littler, who co-edited "The Regulation of Gambling: European and National Perspectives," a book published in 2006.

In Ladbrokes v. De Lotto, the Dutch Supreme Court has asked the court of justice the following questions:

Under European case law, can the Netherlands make gambling more attractive through the introduction of new games and through advertising in order to keep (potential) gamblers away from illegal offerings?

Does the national judge in each case have to decide whether applying Dutch national gambling policy in each specific case is justified?

Can a member state that operates on a closed-license system, like the Netherlands, block an operator licensed in another member state from offering gambling via the Internet?

Procedurally, the court of justice could take up to two years to reach a decision, because other countries are also waiting for their cases to be heard, explained Mr. Veenstra, who also chairs a legal affairs working group for the European State Lotteries and Toto Association.

"Somewhere around one-and-a-half years, the European Court of Justice will come to a certain conclusion, and that conclusion is an answer to the questions put on the table by the Dutch Supreme Court," he said. "So, it will go back to the Dutch Supreme Court, where they will have a final judgment based on the ECJ opinion."

Mr. Veenstra said De Lotto feels comfortable about appearing in Luxembourg because it has defended itself well in Dutch courts thus far.

On the other hand, because there are now eight gambling-related cases pending at the court, it is reasonable to expect a shared opinion on the matter, which could bode well for the parties involved, depending on the point of view.

"The more opinions on the table from the side of the European Court of Justice, the better we can interpret the situation with regard to gambling services," Mr. Veenstra said.

Mr. Veenstra, who is "absolutely opposed to liberalization," sees the referral to the court of justice as a positive step, because what Europe needs, he said, is a definitive answer on how to deal with gambling.

"I think it is now time to have more clearance coming from the legal side -- the European Court of Justice -- and also the political side," he said. "I think it is time for the member states of the European Union to set the agenda for a proper discussion on what we should do with regards to gambling."

Monopoly Czar Gives an Iron Inch is republished from
Emily D. Swoboda
Emily D. Swoboda