Many states are moving in the opposite
direction from the one recently taken by the EU, which was
acting primarily on the provisions of the Treaty of the EU and
on standing ECJ case law. The Gambelli ruling [C-243/01, 6th
November 2003] unequivocally affirmed gambling as a service, a
sector subject to the Freedom of establishment (Article 43) and
the Freedom to provide services (Article 49).
France, Italy and Austria are the countries that are mainly
protecting their monopolistic powers. On 12/10/2006, the EU
Commission issued issued a press release entitled 'Commission
inquires into restrictions on the provision of certain gambling
services in Austria, France and Italy'.
It is being stated that Charles Mcreevy,
the EU internal market commissioner will launch infringement
procedures against the three countries for violating EU rules.
This follows other similar actions taken in April.
The European Commission is considering legal action against
France as early as next month over its restrictions on gambling operators. This
was a follow-up to the arrest in France of two senior executives of
Bwin, the Austrian online sports betting operator on September 15. The
latter were in the process of signing a sponsorship deal with AS Monaco.
The operation, carried out on the behest of the state monopoly Français
des Jeux, was calculated to attain maximum publicity.
On 15 September, the French authorities
detained Manfred Bodner and Norbert Teufelberger, the two Austrian chief
executives of online gambling operator Bwin (formerly Betandwin), as
they travelled to France to unveil a new sponsorship deal with Monaco
football club. Coming after the high profile arrests of David Carruthers
and Peter Dicks in the United States, it is another serious blow to the
industry. Under French law it is illegal for gambling operators to
advertise, unless they are a French state-owned company.
It is particularly striking that, from
reports, it appears to have been Francaise Des Jeux ("FDJ"), the
state-owned monopoly operator of the French national lottery, who
prompted the authorities into making the arrest. It has also warned
that, just like in the US, other operators who travel to France are in
danger of arrest.
Bodner and Teufelberger have now been released on bail. However, whilst
no charges have been brought and the investigation is likely to take
several months, the pair have been informed that they could face up to
three years in prison. This will be of particular concern to 888 and
Gamebookers, each of which have current shirt sponsorship deals with
French football clubs. Further to this, it is understood that both
Monaco and Nantes played their most recent matches in kit which did not
incorporate the gambling-related logos of their sponsors.
The argument upheld by the French
authorities is that Bwin has violated French territorial gaming
laws, which ban private sports betting businesses from operating in the
country.
The EU Internal Market spokesman for Commissioner Charlier McCreevy
claims that: "We continue to receive complaints and Commissioner
McCreevy intends to proceed with these cases and initiate additional
cases against other member states, including France."
The spokesman warned that criminal
sanctions against individual executives, based on laws against illegal
gambling, could in themselves be "problematic" from the Commission's
point of view: "If national rules on gambling are incompatible with
Community Law, criminal sanctions associated with the breach of these
national rules can also be problematical from a single market
perspective." EU law provides that governments have the right to place
restrictions on gambling and sports betting operators, however these
restrictions have to be "non-discriminatory, proportionate and
consistent". Mr McCreevy's spokesman said: "It is not acceptable to
limit the freedom to provide betting services on account of protecting
consumers and at the same time allow monopoly holders to advertise
betting services."
It
has been reported that the arrest of the Austrian executives had raised
the stakes in a Europe-wide battle between lucrative state-sponsored
betting monopolies and their upstart rivals on the Internet, raising
eyebrows at the Commission. This move was parallel to another similar
action in the US where two British online gambling executives were
arrested. While the US resists i-gaming on religious and moral grounds,
European opposition has resulted largely from a desire to protect
government-sponsored monopolies that generate more than €25 billion in
annual income (International Herald Tribune).
Online
gambling has attracted about five per cent of the global gaming
business. Due to the increase in the popularity of gaming, the overall
pot is growing. It is believed that the expansion in this sector is not
affecting monopolies but is attracting new customers.
With the
arrest of the two Austrian executive, a wave of shock was expressed by
various organisations such as the European Betting Association (EBA).
Bwin is a licensed, regulated company and a member of EBA in various EU
member states and has been listed on the Vienna stock exchange since
March 2000. EBA secretary general Didier Dewun sees the move as "a
provocation and the desperate last resort of a dying monopoly" and
called on the EU Commission to take urgent action.
See also:
