British bookmaker Ladbrokes has challenged the Swedish government's gambling monopoly by applying for a license to operate Ladbrokes Poker in Sweden. The company says it will consider legal action if the application is denied.
EU law says that countries may prevent competition in the gambling space in order to maintain social safety but that they must otherwise uphold free and fair competition. While the Swedish government claims its state-run poker site operated by Svenska Spel does just that, the European Commission might disagree.
The EC announced Tuesday that it has sent official inquiries into the restrictions on sports betting services in seven Member States, including Denmark, Finland, Germany, Hungary, Italy, the Netherlands and Sweden, in order to determine whether the restrictions violate Article 49 of the EC Treaty, which guarantees the free movement of services.
"The Commission has an obligation under the Treaties to ensure that Member States' legislation is fully compatible with EU law," said Internal Market and Services Commissioner Charlie McCreevy. "This is an important responsibility which it takes seriously. It has received a number of complaints from operators in the area of sports betting, and it feels obliged to respond. It has, therefore, decided to seek information on the matter from the Member States concerned."
Ladbrokes' Director of Communications Ciaran O'Brien said Ladbrokes welcomes the EC's action upon the seven states. Ladbrokes has played a part in this turn of events as they have filed complaints against three of the States: Sweden, Finland, and the Netherlands.
In July of 2005 Finland's Supreme Administrative Court ordered the Finnish government to again review Ladbrokes' betting license application, which had been previously rejected by the Council of State. But November came and Ladbrokes was again denied a license application because, according to the Finnish Lotteries Act, only one entity at a time may hold a license for each of the three categories of gambling--lottery and betting; horse racing and gaming machines; and casinos.
The situation in the Netherlands is no less complicated. Ladbrokes became involved in a case in February of 2003 in which Dutch lottery operator DeLotto sought to block Ladbrokes and other foreign operators from offering their services to Dutch residents. Ladbrokes argued that DeLotto's monopoly violated EU policy allowing a free movement of services throughout Europe. After multiple court battles, Ladbrokes was ultimately ordered last summer to cease offering its services to residents of the Netherlands.
O'Brien said Ladbrokes is prepared to appeal to the EC if its application is denied by the Swedish government.
"We would begin legal action and make a further representation at the EU level," he said. "EU law is clear - betting is subject to article 49 of the EU Treaty and Governments should not restrict competition for commercial / revenue reasons."
O'Brien added that Ladbrokes has submitted its application to the Swedish government, but has not yet received word on the status.
Emily Swoboda is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.