France's highest court, the Cour de Cassation, overturned a
previous ruling which barred Malta's Zeturf from operating in
France. The Court said a monopoly would break EU competition
laws.
France operates a state monopoly on gambling and Pari Mutuel
Urbain (PMU) is the operator for horse racing betting. It brought
the case against Zeturf, which was allowing French people to gamble
online on horse races.
The Court, though, ruled against PMU, saying that the monopoly
it enjoyed was not consistent with EU competition law. Article 49
of the EC Treaty guarantees free movement of services within the
EU.
One French legal expert said that the ruling will probably open
up France's betting market, but only in those areas where French
monopolies already operate. "I think France will have to open
sports betting to all EC companies, but only in the case there was
already a market with only one actor, such as horse race betting,"
French law expert Cedric Manara told online news service The
Register.
There is a power struggle in Europe about the regulation of
gambling. France and Germany are trying to maintain
state-controlled betting monopolies, while the European Commission
is attempting to enforce Article 49 of the Treaty, which should
undermine monopolies.
French authorities arrested executives from Bwin Interactive,
the company behind BetandWin, last year in connection with its
online gambling business. The executives were released. The firm
said that the arrests took place after the company filed a formal
complaint to the European Commission about France's gambling
monopoly.
This week's Court ruling follows a judgment from the European
Court of Justice earlier this year which said that Italy cannot bar
operators in other countries from offering gambling services in
Italy.
Italy had issued 1,000 gambling licences, but three men operated
as intermediaries for Stanley, a UK company which did not have an
Italian licence. The Italian courts asked the ECJ to clarify
whether or not that country's licensing policy was in breach of the
Treaty and the EU principles of free trade.
In March this year the ECJ said that Italy's laws restricted
trade. It said that the blanket exclusion of companies from tender
procedures for the award of licences goes beyond what is necessary
to achieve the objective of preventing criminals from being
involved in gambling.
There are other ways of monitoring the accounts and activities
of operators which impinge to a lesser extent on the freedom of
establishment and the freedom to provide services, it said, such as
gathering information on their representatives or their main
shareholders.
The ruling pointed out that criminal legislation may not
restrict the fundamental freedoms guaranteed by Community law.
