French Monopoly Latest to Threaten Foreign Operators

25 March 2005

With European Court of Justice decisions leaning towards an open market for the online gambling industry in the continent, officials with a French betting monopoly on Thursday said they will begin court proceedings to ban foreign companies from operating online in France.

A spokesperson with the firm, Pari Mutuel Urbain (PMU), said that four companies are violating an 1891 gambling law and the monopoly will prosecute the sites for accepting wagers from French citizens.

"These bookmakers are breaking the law of 1891. What they are doing is illegal. We are launching legal proceedings against them," said Francoise Toussaint, a spokeswoman for PMU (Pari Mutuel Urbain).

The companies targeted by PMU are Sportingbet Plc., and Stanley International Betting of Britain, BetandWin of Austria, and Mr. Bookmaker of Malta. All four operations have licensed Internet betting facilities that accept wagers from French users.

Officials with all four of the companies were unavailable to IGN for comment on Friday but all have launched French-specific sites within the last few months.

The 1891 law that Toussaint referred to was established to create mutualized betting in France. PMU was awarded the monopoly in 1930 as part of an effort by the government to keep the mafia and other organized crime out of the industry.

The four bookmaking operations are hoping precedent from a similar case in Italy, which was eventually heard before the EU Court of Justice, will bode well for their efforts.

The Italian government took similar legal action in trying to keep foreign-based betting operations from entering the market there, but the EU Court of Justice in November 2003 ruled that Italy had to drop the proceedings.

The European court ruled that as the Italian authorities were actively promoting betting via the state monopoly - and reaping large tax returns from the industry - they could not invoke the need to protect the public in order to prevent foreign competition.

Thibault Verbiest, an attorney who specializes in gambling law, said the PMU case will center on how far reaching the EU Court of Justice's ruling can be applied.

"The question is whether the precedent will apply in France," he said. "We would have to establish that France has no coherent policy of keeping the betting industry within bounds."

The PMU case joins a growing list of similar cases throughout the EU. Governments and monoplies in Denmark, Holland and Germany have all tried to block foreign online operators from accepting wagers from their citizens, arguing that the practice jeopordizes public safety and increases social costs for the countries.

But like France, they all have gambling monoplies in place, so the operators argue that by allowing a monopoly to operate but not the other companies, the jurisdictions are violating EU fair trade agreements.

Toussaint gave no timeline on when PMU will bring its issue with the four operators before the French courts.

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