Countries Can Ban Online Gambling, EU Court Says

(CN) - European Union nations may ban online gambling if it's not licensed in their own countries, Europe's high court ruled.

The ruling follows a court adviser's March opinion, which stated that recognition of gambling licenses across member states is not viable under the EU's current system.

The Luxembourg-based Court of Justice most recently examined a case in which a Dutch nonprofit that holds exclusive gaming rights in the Netherlands challenged two United Kingdom-based companies that offered online gambling in the Netherlands.

De Lotto holds an exclusive gaming license in the Netherlands and apparently distributes funds to public-interest institutions. It accused Ladbrokes Betting and Gaming and the Ladbrokes International and Sporting Exchange (Betfair) of illegally offering sports betting over the Internet.

The Court of Justice reiterated the advocate general's opinion, stating that although national gambling restrictions impinge the freedom of services, this may be justified in the interest of consumer protection, as it curbs fraud and diminishes the "incitement to squander money on gambling."

The court expressed doubts about the consistency of legislation across member states, as De Lotto receives special privileges not granted to other companies. It also noted that any gambling policy aimed at generating funds does not fulfill these objectives. The high court also questioned whether illegal gaming is a problem in the Netherlands, as this would affect the objectives of any national law.

As is typical of such rulings, the Court of Justice left it to the national courts to decide if the legislation serves its intended objectives.

Regarding Betfair, which claimed that it should not be subject to licensing in the Netherlands since it is already regulated in the U.K., the court ruled that nations establishing exclusive gambling rights are not precluded by EU law, particularly when adequate state supervision is involved.

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