The EU Court of Justice’s Advocate-General, Yves Bot, delivered, on 17 December, his opinion in two gambling cases brought by private operators Ladbrokes (C-258/08) and Betfair (C-203/08). The two companies oppose the monopoly held by Dutch license holder De Lotto. According to Bot, holders of exclusive gaming licenses may be authorised, in “certain circumstances,” to make their offer attractive by introducing new games as well as by using advertising. Bot also notes that when granting exclusive gaming rights to an operator, the competent authorities must ensure an adequate call for tender under the licensing procedure or as part of the renewal of that license.

Both ECJ cases follow referrals by the Netherlands Court of Cassation and the Netherlands Council of State (the Dutch courts of last instance in these proceedings), as to whether the Dutch gaming legislation is compatible with Community law. The ECJ, however, does not decide these two disputes itself.

In their cases, Ladbrokes and Betfair had claimed that EU law does not allow the Dutch authorities to prohibit private operators from offering internet gambling and betting services to Dutch citizens. Their reasoning is based on the fact that both companies are lawfully operating and licensed in other EU member states. Here, though, the advocate-general notes that, by virtue of the Liga Portuguesa case, the principle of mutual recognition does not apply to a license to offer games on the internet (Case C-42/07).

According to Advocate-General Bot, exclusive holders of gaming licences, such as De Lotto in the Netherlands, may also, in certain circumstances, advertise and introduce new games. Ladbrokes had claimed that the Dutch state cannot justify its denial of market access to other operators by a restrictive gambling policy aimed at preventing excessive gambling. This is due to the fact that it has allowed the single operator to “intensively” advertise its games as well as introduce new games so as to attract new players.

The advocate-general, nonetheless, notes the creation of new games and advertising must be strictly controlled by the member state. It must also be limited so as to be compatible with the aim of protecting consumers against an addiction to gaming. This means that new games, and their advertising, must be sufficient to induce consumers to remain within the legal system without constituting an inducement to excessive gaming.

The advocate-general also dealt with Betfair’s claim that EU-based companies must be given the opportunity to compete fairly for the single operator licences. Here, he notes that where there is only a single licensed operator in the gambling sector, the principle of equal treatment and the obligation of transparency preclude the extension or granting of a license without competitive tendering. This competitive tendering can only be omitted if a call for tenders is “validly” justified. Valid reasons, listed in Bot’s opinion, revolve around addressing “essential” interests, such as public order, protection of consumers from excessive expenditure on gaming and from addiction, and the prevention of fraud. The omission of an open and competitive tendering process must also conform to the principle of proportionality.

PROTECTIONIST FRENCHMAN

In an initial reaction, European Lotteries (EL) sees Bot’s opinion as “largely” rejecting the claims of commercial online gambling operators against its Dutch member company De Lotto. EL brings together national lotteries and sport betting providers in over 40 European countries, including all 27 EU member states. “The advocate-general once again confirms that member states may legitimately grant a single operator the right to operate betting and gaming,” said European Lotteries President Friedrich Stickler.

A source close to private gaming operators noted that a “negative” opinion had been widely expected. “Bot is a Frenchman and showed himself to be fairly protectionist,” said the source. He noted that the advocate-general’s opinion is not binding on the future judgement of the Court of Justice.

The opinion in French) is available at www.europolitics.info > Search = 263407