Sunday, October 15, 2006

European Commission competition officials are crying foul over plans by some
European states to restrict foreign sports betting and gambling services
from operating in their countries. Brussels is considering legal action
against protectionist barriers planned by France, Italy, and Austria that
effectively ban foreign online gaming and casino operators. In total, nine
EU member states face possible action over the issue. Germany, Holland,
Hungary, Denmark, Finland, and Sweden are already under investigation.
Online gambling operations, hard hit by US moves to clamp down on online
gambling that have included anti-gambling legislation and the arrest of key
execs flying through the US, have welcomed the EU's stance. "We hope these
new proceedings will put an end to the witch-hunts against private EU
licensed operators," European Betting Association secretary general Didier
Dewyn said. As a first step in possible proceedings, EU commissioners are
asking for governments to explain their policy on online gambling via an
official request for information, The Guardian reports. The move follows a
barrage of complaints from online gambling firms to EU internal market
commissioner Charlie McCreevy. Each government has two months to respond to
questions asking how they reconcile their policies with EU laws that call
for a free market in goods and services. Possible infringement proceedings
may follow if governments are unable to satisfy Brussels that market
regulations they have applied are "necessary, proportionate and
non-discriminatory". The EU's decision to launch an inquiry does not
necessarily herald a push to liberalise gambling services. National
monopolies might be allowed to operate providing member states can establish
that this is in the public interest. A key ruling by the European Court of
Justice said restrictions on online gambling need to be "consistent and
systematic" so that limiting the market to prevent fraud or combat gambling
addiction is lawful. A number of federal states within Germany have applied
this ruling to restrict the online gambling market.
But Commissioner McCreevy questioned how France can block foreign
competition on the basis of preventing addiction when its online gambling
market has expanded to reach a turnover of ?17bn a year. France has already
been asked to amend an economic patriotism law enacted last year that
restricts foreign investment in a range of industries including defence and
sports betting.