Dutch Court Rules against Betfair

13 February 2004

A Dutch court ruled yesterday that online betting exchange Betfair is operating illegally in the Netherlands. Dutch De Lotto, the sports betting monopoly and exclusive rights holder for Internet gambling in the Netherlands, subpoenaed the international, U.K.-based betting exchange.

The judge held the opinion that Betfair is responsible for the betting on its Web site. That is, the betting takes place and the betting exchange is cashing moneys, pays out and takes a commission from the winning players and the betting organizations. He ruled that Betfair "gives the opportunity to participate in games of chance," which is forbidden by law. Betfair is contravening the law toward De Lotto.

This is De Lotto 's fifth win in a row in its fight in the courts to ban international sports books in the Dutch Kingdom. The streak started with a win against Ladbrokes in September 2003. The court is expected to rule on the procedure on the merits in March.

The Betfair ruling is also the first such verdict in the Netherlands since the Gambelli ruling on cross-border gambling. In that case, the E.U. Court of Justice ruled that member states with legalized gambling must open up their borders, but also emphasized member states' rights to control the amount of gambling available for social reasons.

De Lotto maintains that the Betfair verdict shows that nothing has changed since the Gambelli judgment and that English bookmakers' contention that the Gambelli case makes cross-border betting possible is not tenable.

Tjeerd Veenstra, director of the De Lotto, is thrilled with the Betfair ruling.

"I'm happy that the betting exchange is prohibited," Veenstra said. "On such an exchange, everyone can play each other without any control. No one knows how much money is involved. This 'betting system' is a complete contradiction of our Dutch laws."

Betfair's lawyer, Justin Franssen, has another opinion.

"The Dutch government will not take a view in this matter concerning the P2P bets," Franssen said. "In the Netherlands, it is not forbidden to participate in a lottery outside the Netherlands. This verdict is ridiculous."

My bet: We haven't heard the last of this one.

Rob van der Gaast has a background in sports journalism. He worked for over seven years as the head of sports for Dutch National Radio and has developed new concepts for the TV and the gambling industry. Now he operates from Istanbul as an independent gambling research analyst. He specializes in European gambling matters and in privatizations of gambling operators. Rob has contributed to IGN since Jul 09, 2001.