December 17, 2009

Betfair and Ladbrokes lose legal first round against Dutch government

The Advocate General (AG) of Europe’s highest court, the European Court of Justice (ECJ),has provided his opinion in the cases concerning Betfair and Ladbrokes against the Dutch Government before the ECJ in what represents an early stage victory for the monopolies but that poses a threat to the legality of De Lotto’s automatic appointment as The Netherlands sole egaming supplier.

The AG’s opinion is not legally binding, but is typically seen as being an indication of the tone of the ECJ’s later, binding decision.

AG Bot concluded that article 49 of the EC Treaty must be interpreted to mean that “the principle of equal treatment and the transparency requirement that flows from it also applies to the gambling sector in the context of a single license regime,” implicitly challenging De Lotto’s right to act as The Netherlands’ sole legal supplier of online gaming, online sports bets and the national lottery without having to compete in a tender process against EU-licensed lottery providers.

However Bot did not challenge the legality of a state enforced monopoly per se.

Ladbrokes’ managing director of remote betting and gaming John O'Reilly said: " We continue to believe that the ECJ should uphold principles of free and fair competition across borders as there is no logic in the fact that the Dutch monopoly could freely compete against us in the UK but we are prevented from accepting bets from any Dutch resident that finds us on the Internet.”

Sigrid Ligné, Secretary General of lobby group the European Gaming and Betting Association (EGBA), which represents operators Bet-at-home, Bwin, Digibet, Expekt, Interwetten, PartyGaming and Unibet, said: “This is a key question for the Court given that the exclusive licence has repeatedly been handed out to De Lotto without any form of tender.”

Chris Bryant, a partner at the Brussels office of law firm Berwin Leighton Paisner, said: “This is round one to the monopolies.”

April Carr, an associate in the EU competition and regulatory team at law firm Olswang said: "This will be disappointing for those online operators who thought they could rely on EU law to liberalise the gaming markets. If the opinion is followed by the European Courts then there is reduced scope for them opening markets."

The case continues and a judgement is expected next year.

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