Stanleybet Challenges Italian Monopoly

Stanleybet is hoping to write the next chapter in the ongoing Gambelli story.

The British bookmaker, a subsidiary of Stanley Leisure, announced Wednesday that it will lodge a formal complaint against Italy with the European Commission in response to the Italian Supreme Court ruling that the government's restrictive gambling policies are legal.

In November 2003, the European Court of Justice ruled in the now famous Gambelli case that an E.U. member state allowing gambling through a government monopoly cannot block the services of licensed gambling operators from other E.U. states. Likewise, the court said foreign E.U. operators must abide by the host country's gambling laws; thus, they cannot offer forms of gambling outlawed by the jurisdiction where the player is located.

Government-run monopolies control all aspects of gambling in Italy, and there is no competition from private companies, but Stanleybet wants to change that.

The company has indicated that it plans to lodge a formal complaint against the Italian Supreme Court with the European Commission in coming days.

As reported by the Europe Information news agency, Stanleybet officials believe that many in the Italian government who were upset with the Gambelli decision turned to their own courts for a ruling in their favor. The company intends to ask the European Commission to commence infringement proceedings against the Italians for hindering the freedom to provide its services within the Italian market.

The Italian Supreme Court ruled on April 26, 2004 that by not allowing private companies to operate gaming outlets, the Italian government could help prevent criminal infiltration, therefore justifying the restrictive codes.

Stanley argued to the court that the government never assessed whether the laws were proportionate to its aim and that a licensed and legitimate operator like Stanley Leisure should be allowed to operate in E.U. countries where gambling is permitted.

Once the official grievance is filed, the commission could send a letter of formal notice to Italy if it finds Stanleybet's arguments to be valid.

The ECJ, meanwhile, continues to feel the fallout from the Gambelli verdict.

Ladbrokes has brought a similar case against the Danish government, arguing that it should be permitted to do business in Denmark because other gambling-related services are offered through a government-run monopoly. In yet another case, the European Commission has challenged a Greek law that bans all Internet gaming.

Stanleybet and other European bookmakers argue that countries wishing to expand their gambling industries should expect to face foreign competition. Any government concerned about problem gambling, they say, shouldn't be expanding its gambling monopoly.

The ECJ made similar points in its preliminary ruling, which Stanleybet had hoped would pressure member states into opening up their betting and gambling markets. Even the Italian Supreme Court followed this line of argument in the April case, in which it rejected the government's claims of "preventing gambling addition" because the government is in the middle of expanding its own gambling business.

Stanleybet is one of the largest bookmakers in Europe with almost 1,000 betting agents in Italy, Croatia and Romania and is the global tax-free Internet arm of Stanley Leisure, a public company traded on the London Stock Exchange. The bookmaker also played a major role in the Gambelli case, which involved Italian agents for the company.

For the Italians, Stanley's case is just the latest battle with the European Commission. The Commission in the process of taking Italy to the Court of Justice after the government renewed 300 "concessions"--or public contracts where there is an operational risk of financial loss--for managing race betting without getting competitive bids from other companies.

Repeated calls and e-mails to Stanleybet from IGN in regards to last week's developments weren't immediately returned.