ECJ Ruling May Pave the Cross-Border Way

7 March 2007

Yesterday’s judgment by the European Court of Justice (ECJ) in the Placanica case could pave the way for the free movement of services, especially in relation to cross border betting, in the European Union.

Charlie McCreevy, European Commissioner for the Internal Market and Services, may now have at his disposal the tools to break the hold of state monopolies over gambling services, moving cross-border gaming within the EU one step closer to actualization.

The German professor, Siegbert Alber, former vice president of the European Parliament and Advocate General in the Gambelli proceedings, said of yesterday's ruling by the ECJ that monopolies cannot and should not remain the only source of regulatory authority.

“The reasons given for Italy's monopoly in the Placanica case are far more honest than the pronouncements made by other member states," Alber observed. "At least Italy admits that its approach of simultaneously issuing licenses is designed to increase revenues and only to combat illegal gaming operators."

Francesco Portolano, of the Italian law firm Portolano Colella Cavallo, said the verdict came as no surprise.

“The European Court of Justice could do nothing but confirm the previous Gambelli decision," Portolano told IGN. “The court reiterates that as a matter of principle, those national law’s restrictions on betting (such as the requirements for certain authorizations, or the criminal sanctions) appear to be in breach of EU law, absent a clear and genuine justification on grounds of crime and fraud prevention.

“The issue then becomes whether Italian restrictions may be deemed based on crime-prevention purposes and proportional to such purpose. This would be a question to be answered by the national courts.

“There is no doubt that the Italian government will need to continue paying more and more attention to the way it regulates betting, since any restrictions will be closely scrutinized under such “crime-prevention test,” and any artificial unjustified entry barriers will be probably overturned.

On the German front, the government's draft State Treaty on gaming could lose momentum, as it conflicts with the ECJ ruling--both in proportionality and necessity--rendering the Treaty's institution an open-ended question.

Post facto performance of I-gaming stocks on the LSE

888: up 7p to 103
Ladbrokes: up 9p to 405
PartyGaming: up 1p to 35
Sportingbet: up 2p to 51
William Hill: up 1p to 619

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.