Yesterday the highest court in Europe opined on the issue of whether an EU Member can engage in protectionist practices with regard to their State run gambling monopoly.
The ruling in the European Court of Justice, related to a case in Portugal between online gambling operator Bwin, Portuguese football league (Liga) and the State run betting monopoly Santa Casa de Misericórdia de Lisboa.
Some time ago Bwin and Liga were fined €74,500 and €75,000 respectively for a sponsorship deal that authorities say infringed Santa Casa's monopoly betting (and associated advertising) rights. A Portuguese court upheld the fine as valid and when the decision was appealed, the appellate court sought guidance from the ECJ on application of EU free trade law to the issue at hand.
A central tenet of EU law is the freedom to provide services. It is an anti-protectionist provision aimed at fostering free trade between EU members and provides that laws restricting service provision by foreign (EU member) service providers simply to protect local interests from competition are illegal. It is a provision of EU law that the European Commission has been active in seeking to enforce with respect to online gambling services - issuing reasoned opinions and threatening infringement proceedings against EU members trying to protect local monopolies.
It is also a provision that EU based online gambling operators and industry lobby groups have been championing and regularly citing in efforts to push for an open and regulated European Community online gambling market.
In a decision that will have far reaching implications for how quickly, and in fact whether at all, online gambling operators get their wish of an open market, the ECJ ruled that protection of a State run monopoly through restrictive laws is legal where such protection is in the public interest. The public interest in this case, as contended by Portuguese authorities, was their intent to combat criminal activity associated with a wide spread gambling industry.
Obviously this decision turned on the facts and circumstances particular to Portugal's case, but it does open the door to governments around Europe to argue that they too may legally close their doors to operators from the wider EU region based on considerations of public interest.
Interesting time indeed!
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