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Online Gambling Industry Responds to Unfounded ECJ Claims

9th September 2009 8:11 am GMT

The regulated European online gambling industry has responded angrily to Tuesday's European Court of Justice ruling in the case involving bwin and Portugal's Santa Casa da Misericórdia de Lisboa. The ECJ asserted in its ruling that online gambling poses a higher risk of fraud than conventional gambling and that operators may be in a position to influence sporting events in order to maximise profits.

The Remote Gambling Association (RGA), which represents the world's largest licensed online gambling businesses, described the ECJ's assertions as unfounded and unsubstantiated, while bwin said that the ruling underscores the need for modern regulation of online gaming in order to protect consumers.

While the ECJ recognised that the monopoly of Santa Casa represented a restriction on the freedom to provide services as defined in EU law, the court held the view that such a restriction may be justified by overriding reasons relating to the public interest. (more)

In a statement yesterday, bwin highlighted the consumer protection and fraud control benefits of IT-based systems as well as the compulsory code of conduct to which it and other operators subscribe.

"This Code stipulates strict controls which, given the transparency of the internet, have proven more efficient in the internet than in traditional brick-and-mortar gaming and, in particular, conclusively prevent any type of fraud," said bwin.

The European Gaming and Betting Association (EGBA), a Brussels-based non-profit association representing the interests of regulated European operators, said that the judgment should be seen in the context of the increasing number of European Member States that are now in the process of rethinking and redrafting their gaming legislation.

"Several jurisdictions in the EU already prove that it is possible to guarantee a high level of consumer protection and have a well regulated and competitive online gaming market at the same time," said Sigrid Ligné, Secretary General of the EGBA.

Both the EGBA and RGA maintain that the Portuguese restrictions are not necessary to achieve its objectives and that the retention of a monopoly system is disproportionate to any perceived risks.

With regard to the judgment, the RGA believes that the ECJ has made a number of unfounded and unsubstantiated assertions about online gambling in general. In particular, the ECJ states that online gambling carries a higher risk of fraud than other forms of gambling and that gambling operators may be in a position to influence the outcome of sporting events that they sponsor.

"There is absolutely no proof to support these kinds of assertions which, in the latter instance, denigrate both sports and the wider gambling industry."

Commenting on yesterday's ruling, Clive Hawkswood, Chief Executive of the Remote Gambling Association, said: "We regret that in its preliminary ruling the ECJ did not take a further step toward the fair treatment of gambling services in the internal market, but remain hopeful that the Portuguese courts will ultimately render a fair verdict.

"The narrow scope of this ruling reduces its significance in the overall legal context as it is not a departure from previous rulings. Thus, nothing in it should stop the European Commission from pursuing ongoing infringement proceedings against the clearly unlawful gambling regulations in multiple jurisdictions nor should Member States construe this ruling as permission to enact protectionist regulations that are still unlawful under the ECJ's controlling jurisprudence.

"As for the subjective views expressed by the ECJ about online gambling and the reliability of licensing in different Member States, all I can say is that they bear little or no relation to the reality of the situation."

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