On Oct. 12, 2006, the European Commission launched new infringement procedures against three member States--Austria, France and Italy--in regard to their national legislation restricting the supply of certain gambling services.
The Commission sent similar requests for information in April 2006 to Denmark, Finland, Germany, Hungary, Italy, the Netherlands and Sweden
The Commission intends to determine whether the measures in question are compatible with Article 49 of the EU Treaty, which guarantees the free movement of services. According to the Commission, "this decision relates only to the compatibility of national measures in question with existing EU law."
The Commission has asked the Austrian authorities questions in relation to national legislation that prohibits the promotion or advertising of casinos licensed and established in other member states. The Commission also has concerns that the legislation in question protects Austrian players from excessive losses, but makes no such provision for foreign players.
In the case of France, the Commission has questioned a range of restrictions imposed on remote sports betting operators licensed and established in other member states. The Commission has concerns about the proportionality of the French measures whereby operators licensed and regulated in other member states are denied access to the French sports and horse race betting markets for reasons such as the protection of consumers from gambling addiction--even though the French sports betting market continues to expand.
The latest inquiry into national restrictions in Italy, like the case with France, focuses on the provision of remote sports betting services by operators licensed and regulated in other member states. In particular, the Commission has concerns that recent Italian legislation blocking access to the Web sites of legitimate European operators is a disproportionate restriction.
The Commission has asked the Italian authorities to explain the proportionality of these measures, particularly in the light of the expanding sports betting market, which appears reserved to domestic operators. Stanleybet International, along with other private EU licensed operators has already publicly appealed against the Italian legislation.
The three member states have until December 2006 to reply to the Commission.
"The launch by the European Commission of the new infringement proceedings . . . that this should be the writing on the wall for various governments in EU member states to realize that action is required to adapt to the internal market realities," said a spokesperson for Stanleybet International plc. "Private operators, licensed, taxed and regulated in EU member states cannot be restricted for the sake of enriching the public purse and then be dismissed merely as for-profit operators who are preying on the innocent consumer."
Stanleybet International, whose annual turnover was £32 million as of April 30, maintains that it is a reputable U.K.-based and regulated business, and it has been for decades.
"At the same time," the Stanleybet spokesperson explained, "like all other betting businesses, we are taxed and through our betting tax make payments to be used by governments for social causes."
John Whittaker, the company's executive managing director, added, "This is a business model that promotes a responsible market with a level playing field and fair competition."
I some EU member states, private operators are forbidden and, thus, cannot be taxed because of monopoly restrictions protecting the revenue-raising activities of state lotteries.
"These monopoly restrictions are now under investigation by the European Commission in nine member states (Austria, France, Italy, Germany, Sweden, Denmark, Finland, Hungary and Holland), and according to public statements by Internal Market Commissioner McCreevy, more are to follow," Whittaker said.
He continued, "We are now at a crossroads. Member states have either the option of waiting for the European Court of Justice to force them to change or they can recognize reality, abolish this grey legal area and proactively regulate their markets to a achieve a common goal we share: the promotion of responsible gambling.
"Stanleybet International, an experienced licensed operator in various EU member states, is willing to contribute to a discussion with national authorities to establish how such regulation can come about."
Since 1997, Stanleybet International has operated a European joint venture bookmaking business with betting on football as the major source of turnover. Initially focused on Italy, where there are now some 250 agents, the business operates additional joint ventures in Croatia, where there are around 130 shops, and Romania, where there are 85 shops. There are also around 150 agents in Belgium and 15 in Germany.