by Devon Chappell, News Staff Writer

September 8, 2009

What is clearly a short term blow to the European online gambling industry, the European Court of Justice has ruled that Portugal's state-run betting/lottery services provider, Las Santa Casa de Misericordia, is warranted to exist as a monopoly if the general public welfare is at stake and measures are being taken to prevent and fight illicit online gambling activities, including fraud and problem gambling addictions.

In direct response to the activities of leading European internet betting destination, Bwin, the ECJ case could set a precedent that online gambling trade bodies have been fighting hard to prevent. What has thus far been a pendulum battle between top European gambling operators and various EU member countries, just when things look as if state-run gambling monopolies are coming to an end, a ruling such as this keeps the battle going.

The argument of anti-gambling monopoly proponents is that EU rules require businesses to conduct trade and services openly and freely across EU member state borders, including services rendered on the internet. The monopolies, however, contend that these rules can be restricted if the public welfare is indeed at stake in regard to the services being offered. And since this is gambling we're talking about (a dangerous and evil activity lest you forget), the monopolies claim they are the only ones fit to amply protect their citizens.

According to recent ECJ ruling, this would appear to be the case. Bwin, however, has been quick to release a statement in response to the ruling. Bwin's co-chief executives, Manfred Bodner and Norbert Teufelberger, reiterate that online gambling applications using an IT-based medium are actually more effective at protecting online gamblers and control fraudulent activities. Citing the Codes of Conduct upheld by leading European trade bodies, the European Gaming and Betting Association and the European Sports Association, Bodner and Teufelberger rightfully argue that land-based casinos and betting operations are simply not keeping up with the growth of the internet.

Not all EU member state's have chosen the stance of Portugal, however. Italy, France and especially Great Britain have made concessions to change legal framework allowing for cross border trade of internet betting services. The reality of the situation is that court ruling's will not be able to fill in for online gambling regulation. If law's are not updated, a black market will thrive and more citizens will fall prey to the potential downfalls associated with online gambling.

Considering the ECJ is the European Union's highest court, the ruling against Bwin (which extends to their sponsorship of the Portuguese football league), is certainly a hard knock. It is the first ECJ ruling that essentially gives a gambling monopoly to extend services to the internet. However, Bwin is not one to back down from a legal challenge, and despite a setback in Portugal, will continue providing services to a large portion of the European internet betting sector.

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