France to EC: We Won't Lie Down

27 June 2007

Today, the European Commission (EC) has issued Sweden and France reasoned opinions--the second stage of the infringement procedure--having found that the countries' sports-betting legislation remains non-compliant with EU law.

Paris and Stockholm will make the necessary adjustments to their legislation, as prescribed in the reasoned opinion, or face legal action in the European Court of Justice (ECJ).

In case of non-compliance or satisfactory reply within two months, said Anouk Hattab-Abrahams of Ulys law firm, Brussels, the EC may bring the cases before the ECJ.

The Times reports that Sweden has "hinted at a willingness to compromise with Brussels," though France has elected for a more direct approach.

"France will not lie down," a spokesman for the French Finance Ministry (FFM) told the paper. The FFM received more than $4.4 million from horse bets, football pools and the national lottery in FY 2006.

At issue is whether these governments are unfairly protecting their domestic sports-betting monopolies from what the Financial Times calls "bona fide border-straddling Internet betting ventures," or are indeed acting to protect the public from itself.

Increasingly, EU Internal Market Commissioner Charlie McCreevy has thrown his weight behind I-gaming companies seeking access to the lucrative French sports-betting market. McCreevy has repeatedly argued that state-run monopolies are using concern about public welfare as a pretext for protectionism.

"A member state cannot invoke the need to restrict its citizens' access to betting services if at the same time it incites and encourages them to participate in state lotteries, games of chance or betting, which benefits the State's finances," McCreevy said.

That French monopolists--the Pari Mutuel Urbain (PMU), for instance--are seeking to expand into other European markets could weaken the country's case, McCreevy added.

Several major European sports-betting operators, including Ladbrokes and bwin, have publicly lauded the EC's decision to continue with the infringement proceedings.

"It is quite wrong that Ladbrokes must compete with the French monopoly-run Euro Millions lottery in the United Kingdom, when we are banned from operating betting and gaming services in France," said John O'Reilly, Managing Director of eGaming, Ladbrokes.

The FT editorializes that the EC's effort to liberalize the European sports-betting market is unlikely to succeed "as long as member states continue to claim the moral high ground and take advantage of the complicated and contradictory wording of European laws."

On Tuesday, talk of legislation that would harmonize betting rules throughout the European Union surfaced, but Oliver Drews, a spokesman for the EC, said that Brussels had no plans to introduce a harmonization bill.