The ruling
comes just weeks before German states are expected to ban internet
sports betting across the country. It forms one episode in a long
struggle between some European countries who want to control online
gambling and the EU institutions that want to promote free
cross-border trade.
BWIN Interactive, a major Austrian gambling company with plans
for Europe-wide expansion, had been banned by a lower court in
Hessen from operating there until the overturning of the
ruling.
Germany and France are trying to keep state monopolies on
gambling intact but have fallen foul of European legislation
mandating free trade of goods and services within the EU.
The French Government lost a case earlier this year when the
country's highest court, the Cour de Cassation, ruled that Zeturf,
a Maltese company, could operate in France. That undermined the
French state monopoly.
The court said that the monopoly, operated in horseracing by
Pari Mutuel Urbain (PMU), was inconsistent with EU competition
law.
Disputes have focused on Article 49 of the EC Treaty, which
guarantees free movement of services within the EU's borders.
France was also involved in a scuffle with BWIN when it arrested
the company's two chief executives. It later released them, and
BWIN claimed that the arrests only happened after it had made a
formal complaint with the European Commission about France's
maintenance of a gambling monopoly.
Italy was also involved in a case in which its attempts to
restrict gambling trade were thwarted. It had used criminal
legislation to restrict heavily the number and type of betting
licences that it granted.
The case, which involved three operators, Mr Placanica, Mr
Palazzese and Mr Sorricchio, reached the European Court of Justice
(ECJ). It ruled that Italy could not use criminal law to undermine
freedoms guaranteed under the EU Treaty.
"A Member State may not apply a criminal penalty for failure to
complete an administrative formality where such completion has been
refused or rendered impossible by the Member State concerned, in
infringement of Community law," said that ruling.
