(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 that the 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 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 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 high court expressed doubts about the consistency of legislation across member states, as De Lotto receives special privileges not granted to other companies. The court also noted that any gambling policy aimed at generating funds does not fulfill these objectives.
The 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 EU high court 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 United Kingdom, the court ruled that nations establishing exclusive gambling rights are not precluded by EU law, particularly when adequate state supervision is involved.