ECJ decision justifies Dutch online gambling legislation

The European Court of Justice (ECJ) has decided that EU countries are entitled to ban online gambling companies within their borders. However, this is only legitimate if the own national court rules that the prohibition fights crime and fraud. Nevertheless, the decision by the European Court of Justice results in plenty of room for interpretation.

European Court of Justice

Ladbrokes and Betfair have separately sued Dutch gambling monopoly De Lotto. Their British license contains stringent rules with regard to gambling and fraud addiction. Therefore they believe that their British license should be acknowledged in the Netherlands. This claim is based on the free trade agreements between EU member states.

Gambling monopoly

In August 2009, the ECJ judged that gambling monopolies were legal if their main purpose is to combat fraud and crime. For that reason, bwin lost its challenge against the Portuguese Football League. The ECJ ruled that gambling should be regulated at national level instead of at European Union level.

Legal online gambling

The court ruling stated: “A member state is allowed to take the stance that legal online gambling operations by companies like Ladbrokes in another member state fail to sufficiently protect national consumers.”

Games of chance

“Games of chance lack direct contact between consumer and operator. For that reason, online games of chance lead to specific and significant risks of fraud. These risks are more significant in comparison to the conventional games of chance markets,” the ECJ stated.

Online gambling firms

The ruling is a major disappointment for online gambling firms. However, there are online gambling operators that detect some positive aspects. It could be concluded that the Dutch gambling policy aims on considerably increasing gambling and betting by stimulating consumers to take part in such activities. In that case, that policy doesn’t restrict betting and gambling activities in a consistent and methodical way. For that reason, a Dutch tribunal should examine the activities by the state-run gambling monopoly. It should be determined if De Lotto was excessively increasing gambling.

European Gaming and Betting Association

Sigrid Ligné is secretary-general of the European Gaming and Betting Association (EGBA). Ligné commented: “The ECJ has ruled that if a member state prohibits or controls gambling through a state monopoly it should meet stringent requirements. We believe that the Dutch gambling monopoly fails to meet these requirements.”

Online gambling and betting

“A policy of restricted expansion in the gambling and betting business can aim on stimulating players to participate in legal gambling activities instead of illegal gambling activities. Licensed operators should offer trustworthy and appealing gambling activities. This could require a wide range of games, publicity to a certain extent and new distribution methods,” the ECJ added.
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