Mixed Reactions for Betfair and Ladbrokes on ECJ Opinion18th December 2009 10:19 am GMT
Ladbrokes has said that Thursday's opinion from ECJ Advocate General Bot does not correctly interpret EU law since it allows Member State's to assert that restrictive legislation is intended to prevent fraud, without having to produce any evidence to support the assertion. Betfair on the other hand welcomed Bot's clarification of the need for transparency in allocating licences.
In his opinion concerning Betfair and Ladbrokes' dispute against the Netherlands government, Bot said that a Member State was justified in imposing restrictive measures for the purpose of counteracting fraud in the gaming sector by way of prevention, since it has the right to invoke the risk of fraud associated with gaming as the basis for legislation restricting that activity, without being required to show that fraud is actually being committed in its territory.
Ladbrokes also argues against Bot's opinion that "holders of exclusive rights to operate gaming may be authorised, in certain circumstances, to make their offer attractive by introducing new games and by using advertising."
Ladbrokes' Managing Director of Remote Betting and Gaming, John O'Reilly said: "The opinion given by the Advocate General seems to assume the Dutch courts have already applied a full test of whether the introduction of new games and advertising by the Dutch Monopoly constitutes an excessive enticement to gamble.
"However the Dutch courts have applied no such test - a point we made clearly in the pleadings. We continue to believe that the ECJ should uphold principles of free and fair competition across borders as there is no logic in the fact that the Dutch monopoly could freely compete against us in the UK but we are prevented from accepting bets from any Dutch resident that finds us on the Internet."
Meanwhile Betfair, also involved in the dispute with the Netherlands government, yesterday welcomed a part of the opinion by the Advocate General, which clarified the obligation of transparency in allocating licences for gambling operators.
Bot accepted the argument that a sports betting licence should be allocated or renewed in a transparent and equal manner and took the view that "when granting to a private operator the exclusive right to operate a form of gambling under a licensing procedure or as part of the renewal of that licence, the authorities must put out an adequate call for tenders."
In doing so, he rejected the arguments made before the ECJ by both the Dutch government and the Dutch monopoly operator, De Lotto.
"In a licensing system which is limited to a single operator in the gambling sector, the principle of equal treatment and the obligation of transparency preclude the extension of a licence without competitive tendering unless the omission of a call for tenders is validly justified," said Bot.
"In this context, it is for the national court to determine whether such an extension without competitive tendering addresses an essential interest, such as reasons of public order, or an overriding requirement relating to the general interest as laid down in the case law, such as the protection of consumers from the risks of excessive expenditure on gaming and addiction to it and the prevention of fraud, and whether it conforms to the principle of proportionality," he said.
According to Betfair however, the Advocate General did not address a fundamental issue in the case, namely that Betfair's site in no way targets the Netherlands. Betfair did not argue in favour of mutual recognition but instead argued that Dutch consumers should have the right to access Betfair's English language site.
"Betfair welcomes the opinion of the Advocate General which clarifies the obligation of transparency in allocating licences for gambling operators," said Mark Davies, Betfair's Managing Director. "We believe this will have fundamental consequences for the licensing of operators throughout Europe. We hope that the Court will confirm this in its ruling next year and also address the issue of the right of Dutch consumers to access our website in the Netherlands."
Betfair had questioned the legality of the Dutch licensing system having been twice denied the opportunity to apply for a sports betting and horseracing licence. The company argued that the principles of equal treatment and transparency should apply to the allocation of such licences.
In addition to the questions concerning Betfair's Dutch licence applications, the Dutch court also asked the ECJ to consider whether the Dutch State is precluded under EC law from prohibiting Betfair to allow Dutch citizens to place bets on its EU-licensed site.
In Bot's opinion yesterday, he reaffirmed the State's right to prohibit unlicensed foreign operators from offering such services to its citizens. The Advocate General recalled that by virtue of the bwin -Liga Portuguesa case, the principle of mutual recognition does not apply to a licence to offer games on the internet (more).