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European Court Rules for Online Gaming Operators

By: Ryan Alders, Friday February 17th 2012
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The European Court of Justice (ECJ) has again ruled that national regulators must not discriminate against online gambling operators from other EU nations wanting to enter their markets. The ECJ clarified that it is against EU law for national legislation to protect the market position of incumbents under the guise of consumer protection or fraud prevention. This important preliminary ruling was delivered in the cases of access to Italian online gambling licenses by European operators.

The ECJ went on to say that the existing operators having had a head start of several years over the operators unlawfully excluded have been conferred with an unfair competitive advantage. This constitutes a new breach of Articles 43 EC and 49 EC and of the principle of equal treatment. The objective of ensuring continuity, financial stability or a proper return on past investments for operators cannot be accepted as being in the public interest. The ECJ also pointed out that in many cases the Member States have been following a policy of expanding online gambling activity with the aim of increasing tax revenue. These nations cannot justify restrictions on grounds of reducing online gaming opportunities for combating criminality and for protecting consumers from gambling addiction.

This ruling came as a blow for Italian regulators. Sigrid Ligne, Secretary General of the European Gaming and Betting Association (EGBA) called this ruling positive. She said that it is now confirmed that national regulators of online gambling markets may not discriminate against new operators but must guarantee fair market access. She also praised the ECJ for calling on the EC to enforce the law and pursue complaints and infringements procedures.

The online gambling operator Stanleybet was one of the biggest beneficiaries of this ruling and the executives at Stanleybet were jubilant. David Purvis, CEO of Stanleybet, said that they have received from the ECJ a definitive recognition of their right to enter the Italian market under conditions of equality and fairness vis-a-vis the other national operators. The application from Stanleybet has been turned down three times by the Italian regulatory authority. Purvis said that after twelve years of legal battles, this third ECJ ruling must surely put an end to the unlawful distortions, the discrimination and the unjust limitations of the Italian licensing system.

Purvis also took a dig at the EC, which had closed infringement proceedings against the Italian government. He said that this ruling indicates that this closure was premature. He added, "I hope this is a lesson to be learned and from now on the Commission will not allow political considerations to overtake EU law in other jurisdictions such as France, Greece and Germany."

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