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Court Rules Svenska Spel Must Abide by Public Tender Laws

24th December 2009 8:05 am GMT

Despite recent assertions that it is a commercial business, an Administrative Court in Sweden has ruled that Svenska Spel must conform to laws relating to public procurement due to its status as a state-controlled company.

The case relates to Svenska Spel's purchase of IT services and the awarding of contracts without adherence to the law of public tenders. The case was brought by Danish Telecoms operator TDC.

Several Swedish courts have ruled that Svenska Spel is a publicly managed company which makes it a contract awarding authority under the Law of Public Tenders, however Svenska Spel continues to appeal the decisions.

According to Svenska Spel, the gaming company "does nothing to meet any need which is in the public interest" as defined by the law of public tenders and is therefore not obliged to adhere to the law.

In announcing the third appeal of the ruling, Svenska Spel Chair Margareta Winberg said that the board was united in its belief that the law should not apply to it. This after the Administrative Court ruled that the company must launch a new public tender for its IT services.

"Gambling does not fulfil any need in the interest of the public in the meaning of the law," said Winberg, despite the Administrative Court's rejection of this argument. "The gambling market is highly competitive and the business of Svenska Spel has an expressed intention to make a profit."

After years of presenting itself as a tool of the state with the express intention of serving the public interest by channelling online gamblers to the protection offered by the state monopoly, as opposed to seeking profit, Svenska Spel has in recent months increasingly sought to position itself as just another online gambling company.

The change in stance is seen as part of a move by the company to position itself to compete more effectively with private operators on more favourable terms than its current designation allows.

Svenska Spel faced a similar lawsuit in 2006 from the company formerly know as 24hPoker, now Entraction. (more)

24hPoker dropped its suit against Svenska Spel in January 2007, despite the findings of an official government purchasing committee which said that Svenska Spel was obliged to allow multiple vendors to bid for the contract to supply its online poker platform. The contract was awarded to Sweden's Boss Media without being put to public tender.

In an unrelated case involving Betfair and the Dutch gaming monopoly last week, Advocate General Bot of the European Court of Justice issued a non-binding opinion stating that while a national gaming monopoly may be justified in the interest of consumer protection, the laws of public procurement which apply to State entities must be adhered to. (more)

The Opinion related to the Netherlands government's award of a gaming monopoly licence to De Lotto without a competitive procurement process.

If that Opinion is formerly adopted by the ECJ in its ruling on the case which is expected next year, it is likely that private European operators will also push for the Swedish monopoly licence to be put to the same process in the interest of transparency, equal treatment and non-discrimination.

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