The ECJ ruling in “Bwin Liga” case validates the online betting monopolies in Europe
When it seemed that the liberalization of online gaming was inevitable, the fall of the monopolies is delayed by the European Court of Justice ruling in “Bwin Liga” case.
The facts are simple: Portugal is among the countries that refuse to open the online gambling market, like Germany, Finland, Sweden or Netherlands. Specifically, the operation of such games is licensed (since 1783) to “Santa Casa da Misericordia de Lisboa”, which holds the monopoly. Advertising gambling or betting activities, others than those offered by Santa Casa, is obviously prohibited and punishable by law.
Perhaps encouraged by the recent jurisprudence of the ECJ, the Portuguese Football League signed a partnership with Bwin, that entitled the latter to post its logo and advertising messages on sports equipment.
Directly regarded by this violation of the law, Santa Casa sued Bwin and the League in criminal court, which preferred to refer a preliminary question to ECJ. This happened on 13 February 2008.
Bwin argued that Article 49 of the EC Treaty (concerning freedom of services) applies to games and online betting. On the other hand, Santa Casa explained the restriction on freedom to provide services by arguing that the main objective of the national legislation is the fight against crime and fraud.
The Court noted that Santa Casa pursuit the public interest and by the tight control of the online gaming it protects consumers of possible fraud by operators. Furthermore (and almost against the spirit of Article 49), the Court recognizes that the physical location of a gaming operator in another EU state could justify the restriction. The foreign checking and monitoring can’t ” be considered a sufficient guarantee for national consumers protection against the risks of fraud and crime”.
The ECJ concludes that in this case, Article 49 is not contrary to the legislation of a Member State which prohibits operators established in other Member States, where they legally provide similar services.
This ruling is surprising especially because the debate in Europe focuses presently on market opening, aiming at the integration of offers such as betting exchange or online casinos services. Even so, this is a case that shouldn’t announce a halt to the EU policy of market liberalization.