The ECJ has ruled
that Portuguese law which allows the state-run charity La Santa
Casa de Misericordia (SCM) a monopoly on betting and lottery
games is legal if it is designed to combat fraud and other
crimes. The European principle of the freedom to provide
services anywhere within the Union can be compromised when it is
balanced against the benefits for the public interest. The case
will now be referred back to the ECJ by the Court of First
Instance in Porto, and will now be referred back to the court in
Porto for final ruling.
Bwin’s main argument in reply to the ECJ’s ruling is that online
bookmakers are extremely capable of preventing fraud that
land-based ones and that EU law has failed to keep up with the
progression of online business. It stated that “the Court
overlooks the fact that respectable private providers such as
Bwin are just as able to control gaming in the internet as state
monopolies. Using an IT-based medium, higher security standards
can be met to warrant customer protection and fraud control in
particular”.
Bwin continued that the Code of Conduct for private online
gaming providers developed by the European Gaming and Betting
Association, of which Bwin is a member, “stipulates strict
controls which, given the transparency of the internet, have
proven more efficient than those of traditional brick-and-mortar
gaming”, adding that “the European Sports Association, whose
efforts also serve to prevent betting manipulation, has
successfully been able to implement this”.
Manfred Bodner, Bwin co-chief executive said that “Online gaming
has become a market reality. There is urgent need to develop a
legal framework in tune with the times to warrant the interest
of consumers, the state and operators. Court rulings will not be
able to fill in for a regulation in the medium and long run.”
Co-chief executive Norbert Teufelberger added: “Only a regulated
online gaming market with a diversified and attractive line-up
of games will provide adequate security against the risks of a
black market, which in fact not only opens up the floodgates to
crime, but also passes up on consumer protection. This is why a
growing number of EU member states, including Great Britain,
Italy and France have reacted.”
The European Gaming and Betting Association (EGBA) also made a
statement in reply to the decision. It does not believe that the
restrictions imposed by Portugal are necessary in order to
achieve the objectives of combating fraud and other crimes. EGBA
secretary general Sigrid Ligné said: “Given the stringent
anti-fraud regulations applicable to EU-licensed operators,
which ensure a high level of integrity, transparency and
traceability over online gaming transactions, we do not believe
those conditions are met.”
The Association also argued that the lack of necessity of the
monopoly law to prevent fraud was demonstrated by other member
states that have managed to prevent fraud in online gambling
without laws ensuring a monopoly. Ligné added: “Several
jurisdictions in the EU already prove that it is possible to
guarantee a high level of consumer protection and have a well
regulated and competitive online gaming market at the same time.
“ Furthermore, attention must be drawn to the vast number of
European states which are in the process of reviewing their
gaming legislation. None of them are choosing a monopoly model
to regulate their online-gambling market.
The Times of Malta has also expressed alarm at the decision.
Considering Malta’s position in the online gaming industry, it
fears that such a decision could serve as a blow to the
lucrative industry. Following the decision, Bwin’s shares
immediately dropped by 9.5%. The European Lotteries Lobby Group
on the other hand welcomed the ruling. “This strengthens the
hand of notational government and lotteries in controlling what
gambling takes place on the internet,” said Rupert Hornig, the
group’s EU representative.
Source - The Malta Remote Gaming Council after eGaming Review
