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Dutch Online Gaming Monopoly Gets A Boost

By: Joan Peppin, Friday December 18th 2009
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The Dutch have for long insisted on maintaining a monopoly on online gambling through the state owned operator De Lotto. They have been challenged by online gambling operators Ladbrokes and Betfair in courts of law. Betfair had applied for a license to operate in the Netherlands almost two years ago and went to the European Court when their application was turned down. Ladbrokes went to court because the Dutch government targeted it for trying to take on board Dutch online gamblers. The Dutch have also been condemned by representative organizations of online gambling. Now for the first time they seem to have found some support.

In an article in the Financial Times it has been reported that the advocate general of the European Court of Justice gave his opinion that European Union member states can grant a single operator the license to operate a betting and gaming monopoly. The advocate general went on to say that the member states do not have to recognize gambling licenses issued by other European Union countries. However, on the flip side the advocate general also said that as per article 49 of the European Commission Treaty even if there is a monopoly the principle of equal treatment and the transparency requirement must be adhered to. This implies that the license has to be issued after asking for competitive bids in a tender process. The advocate general gave his opinion in the cases involving Ladbrokes and Betfair versus De Lotto. The advocate general's opinion is not legally binding but the practice is that it is accepted by the European Court of Justice. The cases are for from over with further hearings scheduled before a judgment is given next year.

The online gambling industry does not regard this as a victory for De Lotto or the Dutch government. John O'Reilly, Managing Director for remote betting at Ladbrokes pointed out that in the existing situation De Lotto can target British players in the United Kingdom but Ladbrokes had to stay away from Dutch residents. He said, "We continue to believe that the ECJ should uphold principles of free and fair competition across borders." Sigrid Ligne, Secretary General of the European Gaming and Betting Association (EGBA), referred to the rider in the advocate general's opinion and said that the key issue in the Dutch case is that De Lotto has been repeatedly given exclusive rights without any tender process.

At the heart of the battle is the Dutch online gambling community that spends up to €450 million a year. It is hardly surprising that the Dutch government wants to keep this market to themselves and that European gambling operators want a slice of the cake.

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