EU Rules ; Dutch government is entitled to ban gambling

6/3/10 – Europe’s highest court ruled this week that the Dutch government is entitled to ban gambling on the Internet, dealing a legal blow to betting companies licensed in other EU nations who have been trying to access the Dutch market, reports Agence France Presse.
 
The report particularly notes Ladbrokes and Betfair among others which are banned in the Netherlands.
 
Holland has a licensing system that allows the government to restrict access to the gambling market.
 
Earlier, Ladbrokes and Betfair challenged the Dutch bans arguing, in separate cases, that they were properly licensed in Britain, a fellow EU nation, and that European law upholds the right of companies to cross borders and carry out business in other European Union countries.
 
The European Court of Justice found that, as EU laws on online gambling have not been harmonised, the court the gambling firms' UK licenses were not relevant.
 
"A member state can prohibit the operation of games of chance on the Internet," the court said in its judgement on Thursday.
 
“Prohibition may, on account of the specific features associated with the provision of games of chance on the Internet, be regarded as justified by the objective of combating fraud and crime."
 
Nevertheless, the court said that such restrictions must be justified, "…in particular by the objectives of consumer protection and the prevention of both fraud and incitement to squander money on gambling, as well as the need to preserve public order."
 
The case ended up in the European Court of Justice because the Dutch court system had referred it for guidance on whether national legalization was consistent with EU rules. The exclusively licensed Dutch state lottery De Lotto is allowed to offer new games and use advertising to make what they are offering on the market attractive.
 
Sitting in Luxembourg, the court said that "…a policy of controlled expansion in the betting and gaming sector may be entirely consistent with the objective of drawing players away from clandestine betting and gaming – and as such activities which are prohibited – to activities which are authorised and regulated."
 
It was up to the Dutch courts to ensure that those permitted to operate a monopoly on gambling must uphold the stated aims behind the restrictions and that gambling licenses are awarded fairly and transparently.
 
In summary, online gambling in the EU can be restricted by national governments, provided selective bans can be suitably justified.