Ladbrokes Takes on Nordic Gambling Monopolies

Officials with Ladbrokes are hoping the Gambelli ruling could open the door to the Nordic market for England's biggest bookmaker.

Last week the company filed a complaint against the Swedish and Finnish governments for a breach of E.U. competition rules. It has also applied for gaming licenses in those countries, as well as in Denmark.

All three Scandinavian countries have gambling monopolies.

The applications were filed so that Ladbrokes would be ready to operate if the E.U. Commission rules in its favor.

The moves are the first tests for interpreting the European Court of Justice's decision in the Gambelli case and could have a long-lasting effect on how gambling operations are conducted throughout Europe.

Richardt Funch, Ladbrokes' director in Denmark, said the company is hopeful that all of its business in Europe can be expanded. Denmark, he said, is an ideal location to test the waters.

"This application is an official opening to dialogue between Ladbrokes and the Danish government," he said. "It's a big step toward the fall of the gambling monopoly, thereby creating a Danish gaming market with far better financial prospects for the state as well as the Danish consumer."

The Danish Parliament tightened legislation this year, barring foreign bookmakers from advertising in Danish media.

The Gambelli ruling states that governments that allow gambling monopolies to exist can't bar competing gambling companies from advertising their services; advertising can only be blocked as a means of preventing social harm.

After the Gambelli decision was announced, the E.U. Commission initiated a process against the Danish state and monopoly similar to what Ladbrokes is looking for in Finland and Sweden.

As part of its application process, Ladbrokes told the Danish government that it lost out on more than 134 million euros worth of revenues, due to Danes using spending money with foreign gambling services.

Funch said Danish levy schemes can be reworked to make it a more competitive industry and one that is punter-friendly.

"In 2002, Dansk Tipstjeneste paid 52 percent of its turnover back to consumers," he said. "In a market open to competition, companies pay about 93 percent back to consumers."

Douglas Roos, Ladbrokes' Nordic managing director, said the Gambelli judgment was the spark Ladbrokes needed to explore the option of getting into European countries where monopolies existed.

A resident of Sweden, Roos feels the government made a big error in telling consumers the monopoly needs to remain intact for social reasons.

"Our authorities take high risks when they mislead Swedish citizens in believing that the betting and gaming monopoly is there for social policy reasons," he said.

No clear timetable exists for resolving issues with the E.U. Commission or the respective jurisdictions. It's unlikely that any of the three governments will grant Ladbrokes a license before the E.U. Commission makes its decision.

Either way, Roos is convinced Europe's gambling monopolies will become a thing of the past.

"Now we see the end of an irrevocable development," he said. "The betting monopoly will fall and give room for a more sound betting proposition to Nordic punters."