Sportingbet to Challenge French Monopolies

Add Sportingbet to the list of European gambling operators challenging the legality of state-run monopolies throughout the continent.

The U.K.-based company has been expanding its operations in Europe over the last year and is scheduled to launch a new French site next week.

In addition to making the site available in French, Sportingbet intends to offer betting on French racing and the popular French football league. The site will also enable users to place wagers on U.K. racing and English Premier League football.

France is not thrilled with the new venture. Officials with the French government announced over the weekend that if executives from Sportingbet come to France to launch the new site they will be arrested and charged with violating French gambling laws.

Gambling services in France are state-run monopolies, and the two companies that would potentially be hurt the most by foreign competition--PMU and La Francaise des Jeux--have both voiced concerns over Sportingbet.

The national horse betting monopoly, PMU, has the most at stake. The company employs more than 50,000 people in France and has an annual turnover of more than £4 billion. Most of its turnover comes from tracks, but it also generates significant amounts through its Internet and telephone wagering services. A large portion of its profits go back into the racing industry.

The national lottery, La Francaise des Jeux, is concerned that Sportingbet's French Web site could draw people away from purchasing lottery tickets. With an annual turnover exceeding £3 billion, the La Francaise des Jeux is France's second largest gambling operator.

In taking on France's gambling monopolies, Sportingbet joins a handful of gambling operators fighting similar battles in Europe.

Ladbrokes became the first major British bookmaker to challenge a European gambling monopoly in 2002 when it commenced battling for the right to offer its services to bettors in the Netherlands. The European Court of Justice recently ruled in favor of Ladbrokes in its case against De Lotto (the Dutch sports betting monopoly) but the Dutch minister of justice (who services gaming licenses in the country) has been given time to make a case for blocking online competition.

A slough of similar cases has followed, with the most recent high-profile case coming from British betting exchange operator Betfair, which is also challenging the Dutch monopoly.

The French government, meanwhile, is making the same argument made by other European governments with gambling monopolies: that the gambling monopolies go a long way in funding social programs, and therefore foreign gambling services--which don't allocate funds in this manner--should be blocked.

The foreign betting operators argue that they should be allowed to operated in countries where wagering is allowed because the increased activity won't harm the public to the degree that the governments argue.

For the moment, Sportingbet isn't commenting on its course of action in France, but the British media are reporting that the company will launch the French site as planned. The company has also indicated that it will take its case to the European Court of Justice if the French government and the gambling monopolies try to hamper its European expansion.