October 17, 2008

ECJ sides with Portuguese monopoly in case against Bwin

Yves Bot, the Advocate General of the European Court of Justice (ECJ), said a European state gambling monopoly could be maintained if it met the following four conditions: "That the legislation is justified by overriding reasons relating to the public interest, if it is appropriate for ensuring the attainment of the objectives which it pursues, if it does not exceed what is necessary for attaining them and if it is applied in a non-discriminatory way".

Bot was giving his opinion on the case between European sports betting operator Bwin and Portuguese gambling monopoly La Santa Casa de Misericordia (SCM), over which the ECJ will publish its verdict in early 2009 and refer it back to the Portuguese court in Porto to make a final ruling on.

The ECJ is considering for the first time whether an EU member state can extend a gambling monopoly to the internet and its verdict on the case could be pivotal for the European egaming sector. The case against Bwin and the Portuguese football league, which Bwin has sponsored since 2005 (Bwin Liga), was brought by SCM and referred to the ECJ by the court of first instance in Porto.

SCM argued that sports betting services should only be offered by state-approved monopolies and imposed a fine of €74,500 and €75,000 each on Bwin and the Portuguese football league. The Advocate General said the fine was invalid as the European Commission had not been notified that the Portuguese authorities were applying the European directive 98/48/EC that applies to organising betting through electronic means of communication and could not rule on the issue. SCM has been ordered to refund the fines to Bwin and the Portuguese football league.

However, the Advocate General added that the aim of community law was not to open European countries to gaming and betting services; and an EU member state’s right to restrict the provision of gambling and betting services to a state-approved monopoly could be extended to "all electronic means of communication, in particular the internet”.

Commenting on Bot's opinion, Siegbert Alber, former vice-president of the European Parliament and a former Advocate General of the ECJ, said any restrictions placed on private operators by European states had to be “applied according to EU law principles". He added: "The problem is not a legal one. It is a matter of interpretation of the conditions; this is not a legal issue but one that has to do with political and legislative beliefs."

Alber added that monopolies should not be maintained for the sole motive of profit and that if they were maintained, marketing and advertising activity should be restricted in a major way. Referring to the interpretation of the legislation, he said member states referred to their marketing messages as "information". Alber added that all the controls and obligations currently operated by the state in relation to gaming and betting could be applied by private operators.

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