By and
LUXEMBOURG -- The European Union's highest court Tuesday ruled that a
Portuguese state-run charity's gambling monopoly is legal if it aims to combat
criminal activity, a decision that could have broader implications for online
betting in other EU countries.
The ruling could give governments of EU member states a green light to
restrict Internet-based gambling services. Earlier court rulings on online
betting in Italy said limits on these services violated EU rules.
Tuesday's case related to a sponsorship deal the Portuguese football league
signed with Gibraltar-licensed betting company BAW International Ltd., a
subsidiary of betandwin.com operator Bwin Interactive Entertainment AG. BAW paid
the Liga Portuguesa de Futebol for the right to place the Web site's logo on
players' uniforms, around the stadiums and on the Liga's Internet site.
The Direccao do Departamento de Jogos da Santa Casa de Misericórdia de
Lisboa, a Portuguese state charity that has a broad national monopoly covering
electronic betting and lotteries on television, radio and the Internet, fined
the Liga €75,000 ($107,565) and Bwin €74,500 for infringing on its monopoly.
Liga and Bwin appealed these fines before a Portuguese court, arguing that EU
rules ensure companies can provide goods and services freely across the bloc's
borders. The court hearing the case decided to ask the European Court of Justice
to give its interpretation on the application of EU law.
The Luxembourg court ruled Tuesday that free movement of goods and services
can be restricted if the public interest is at stake.
"Games of chance involve a high risk of criminal activity or fraud, in view
of the scale of the earnings and the potential winnings on offer to players,"
the court said in its decision. Because there is limited direct contact between
gamblers and online-betting services, there is a "different and more substantial
risk of fraud compared with traditional markets for such games," it added.
Internet-based gambling operators are currently involved in a slew of court
cases and regulatory disputes over access to markets such as Germany, Sweden,
the Netherlands and Greece, whose states monopolize some betting activities.
"It is difficult for us to understand the rationale that crime is more
difficult off-line than online," said Bwin spokesman Kevin O'Neal. "The betting
scandals like point shaving in U.S. college basketball and some of the
[football] scandals in Germany all happened in the off-line world."
Mr. O'Neal said Bwin wants to work with governments to ensure that online
gambling is regulated and safe for consumers. He added that countries like the
U.K., France and Italy have a more open policy, opting for "liberalization and
regulation, as opposed to just regulation." Shares in Bwin were down 5.8% in
afternoon trading.
