Don’t bet yet on a single market for gambling

Betting on sport remains a very fragmented market in the EU, with restrictions on cross-border operations in many member states. But a ruling earlier this year at the European Court of Justice (ECJ) has added weight to efforts by Charlie McCreevy, the European commissioner for the internal market, to create a pan-European market.

France this year caused a stir when it excluded a foreign-backed team from participating in the Tour de France cycle race. The team was sponsored by Malta-based online gaming firm Unibet. French rules outlaw advertising by foreign gambling firms.

Member states such as France, which was last month given a deadline of 29 October to tackle obstacles preventing foreign operators from entering its market, are highly protective of their gambling monopolies, which often generate significant amounts of revenue for state coffers.

In theory sports betting companies and gambling firms already have substantial rights under the EC treaty to operate across borders. Once registered and licensed in one jurisdiction, operators should be free to offer services throughout the EU.

But member states discriminate against operators, both online and offline. "Some of our members have their websites blocked in certain countries even though they are licensed and regulated within the EU," says Florian Cartoux, senior adviser for European affairs at the European Gaming and Betting Association.

The ECJ struck a blow for the gambling companies earlier this year, ruling on the so-called Placanica case, deeming Italian restrictions on foreign betting companies illegal. The ruling will give legal ammunition to McCreevy, who has Sweden, Germany, the Netherlands, Hungary, Denmark, Finland, Greece and Italy in his sights.

Placanica was an agent of the UK sports betting firm Stanleybet International, which had been banned from the Italian market. The Italian government considered Placanica’s activities to be illegal because Stanleybet did not have an Italian licence.

The case clarified the interpretation of the 2004 Gambelli ruling, which allows limits in the name of social protection or to limit criminal activity associated with gambling. Member states rely heavily on the Gambelli case to justify current restrictions.

Having been excluded from the EU services directive last year, sports betting operators hope that the European Commission will hammer out sector-specific liberalisation rules. With big money-spinners such as soccer’s Euro 2008 and the 2010 World Cup in South Africa just round the corner, they want action taken sooner rather than later.

Betting on sport remains a very fragmented market in the EU, with restrictions on cross-border operations in many member states. But a ruling earlier this year at the European Court of Justice (ECJ) has added weight to efforts by Charlie McCreevy, the European commissioner for the internal market, to create a pan-European market.