Bwin Clashes With Portuguese Government In ECJ Dispute
Bwin and the Portuguese Football League told a panel of thirteen European Court of Justice judges yesterday that Lisbon-based Santa Casa’s monopoly on sports betting and lottery games in Portugal could not be justified under EU law.
The ECJ’s Grand Chamber in Luxembourg yesterday hosted a public hearing on the challenge of Bwin and the Portuguese Professional Football League to fines imposed for the operation of illegal betting in Portugal and the violation of Portuguese advertising regulations through a sponsorship deal over challenge of Bwin and the Portuguese Football League.
The case was referred to the ECJ by a court in Oporto in March 2007, which asked Europe’s highest court for guidance on the following questions:
- Does the monopoly granted to Santa Casa, when relied on against [Bwin], that is to say, against a provider of services established in another Member State in which it lawfully provides similar services, which has no physical establishment in Portugal, constitute an impediment to the free provision of services, in breach of the principles of freedom to provide services, freedom of establishment and the free movement of payments enshrined in Articles 49, 43 and 56 respectively of the EC Treaty?
- Is it contrary to Community law, in particular to the abovementioned principles, for rules of domestic law such as those at issue in the main proceedings, first to establish a monopoly in favour of a single body for the operation of lotteries and mutual betting and then to extend that monopoly to 'the entire national territory, including ... the internet'?
Both parties were in Luxembourg yesterday to make final, oral representations before an eventual ECJ ruling likely to be due sometime in early 2009.
Legal counsel representing both the Portuguese Football League and the League’s chief sponsors, Gibraltar-based BetandWin International, subsidiary of Vienna-based remote gambling giant Bwin, said that there was no justification for the Portuguese government to restrict the operation of sports betting in Portugal to just one operator – Santa Casa.
The European Court of Justice has previously ruled in cases such as Placanica and Gambelli that gambling monopolies can be justified only for reasons of public health or the prevention of crime.
“Can you justify restricting the number of operators in Portugal to one? The answer is no,” the League’s chief legal counsel, Senhor Serra Jorge, said.
He continued that the model of having just one available licence was not compatible with the objective of fighting crime as a lower availability of betting would naturally encourage Portuguese gamblers to seek out unlawful, illicit alternatives, thereby exposing a greater risk of fraud.
Serra added that all EU Member States were committed to preventing money laundering, organized crime and match-fixing in their gambling industries and said that the prevention of crime, along with the protection of consumers, can be achieved equally effectively, if not more so, through a “well-organized licensing system.”
“Where an operator is licensed in another Member State there is no risk at all,” he told the Court. “[But] a monopoly would expose consumers to a greater risk of fraud… A monopoly will lead people to the black market.
“Traditionally monopolies have been less regulated [than private companies],” he said. “The lack of regulation is indeed one of their weaknesses.”
The Portuguese Government, representing Santa Casa, countered Bwin’s and the League’s claim that Santa Casa had been permitted to greatly expand its gambling offering in Portugal by, amongst other measures, offering games over the internet, whilst the Government simultaneously defends the monopoly on the grounds of reducing gambling supply.
The ECJ’s 2003 Gambelli judgement upheld the right of gambling monopolies to diversify their distribution channels so long as they do not undermine overall policy objectives, the Portuguese government’s counsel, Senhora Duarte, said, pointing out that Santa Casa’s internet offering was limited to games already available offline and that a 2003 law specifically prohibited the sale of lottery scratchcards via the internet on player protection grounds.
“The 2003 law did not expand gambling. It just said that consumers would be able to use the internet, except for scratchcard games,” she said. “But if you look at Bwin’s site you will see that the secret to getting repeat customers is to offer a boundless range of games.”
“The liberalization of the gambling sector is a key political question and falls within the provisions of the individual Member States,” she concluded. “The logic of the market cannot force Member States to override a tried and tested legal system… Private initiative strives to gain profit and to maximise investment.
“The Portuguese Republic is quite clear on the objectives [sought in its gambling policy] and the legitimacy of those objectives. They are legitimate and relevant. They are inherent and part and parcel of a policy to control gambling, to prevent crime and to protect the consumer.”
Whilst the Court is required to rule only over the two specific questions referred by the Oporto court, it asked both parties, as well as delegates from other EU Member States, to comment on four more specific issues.
Included amongst these was the issue of whether a national monopoly could be legitimated on the grounds of preventing crime, and whether an alternative system of regulation could meet the same ends.
But the ECJ judges also asked whether a monopolized system for one form of gambling, such as betting, could be legitimate if that same Member State had in place a licensing system for another form, such as casinos.
Furthermore, the ECJ invited representations on whether a state monopoly operator should be prevented from offering its gambling services outside the borders of its home State.
Questions on the European Commission’s notification procedure relating to internet gambling, and the relevance of recent ECJ case law involving Sweden’s alcohol monopoly were also put forward by the ECJ’s reporting judge, Sir Konrad Schiemann.
The additional questions asked by the ECJ are certainly intriguing. And how deeply the Court chooses to answer its own questions will be observed extremely closely, particularly as the questions – on the comparison of different forms of gaming especially - resonate strongly through cases elsewhere in Europe.
Representatives from nine Member States, as well as the European Commission, made oral presentations in Luxembourg yesterday.
In drawing a close to the hearing, Advocate General Yves Bot said that he would issue his lead opinion on the Bwin/Santa Casa case on September 9, 2008. A final ruling is likely to follow several months later.
The ECJ’s Grand Chamber in Luxembourg yesterday hosted a public hearing on the challenge of Bwin and the Portuguese Professional Football League to fines imposed for the operation of illegal betting in Portugal and the violation of Portuguese advertising regulations through a sponsorship deal over challenge of Bwin and the Portuguese Football League.
The case was referred to the ECJ by a court in Oporto in March 2007, which asked Europe’s highest court for guidance on the following questions:
- Does the monopoly granted to Santa Casa, when relied on against [Bwin], that is to say, against a provider of services established in another Member State in which it lawfully provides similar services, which has no physical establishment in Portugal, constitute an impediment to the free provision of services, in breach of the principles of freedom to provide services, freedom of establishment and the free movement of payments enshrined in Articles 49, 43 and 56 respectively of the EC Treaty?
- Is it contrary to Community law, in particular to the abovementioned principles, for rules of domestic law such as those at issue in the main proceedings, first to establish a monopoly in favour of a single body for the operation of lotteries and mutual betting and then to extend that monopoly to 'the entire national territory, including ... the internet'?
Both parties were in Luxembourg yesterday to make final, oral representations before an eventual ECJ ruling likely to be due sometime in early 2009.
Legal counsel representing both the Portuguese Football League and the League’s chief sponsors, Gibraltar-based BetandWin International, subsidiary of Vienna-based remote gambling giant Bwin, said that there was no justification for the Portuguese government to restrict the operation of sports betting in Portugal to just one operator – Santa Casa.
The European Court of Justice has previously ruled in cases such as Placanica and Gambelli that gambling monopolies can be justified only for reasons of public health or the prevention of crime.
“Can you justify restricting the number of operators in Portugal to one? The answer is no,” the League’s chief legal counsel, Senhor Serra Jorge, said.
He continued that the model of having just one available licence was not compatible with the objective of fighting crime as a lower availability of betting would naturally encourage Portuguese gamblers to seek out unlawful, illicit alternatives, thereby exposing a greater risk of fraud.
Serra added that all EU Member States were committed to preventing money laundering, organized crime and match-fixing in their gambling industries and said that the prevention of crime, along with the protection of consumers, can be achieved equally effectively, if not more so, through a “well-organized licensing system.”
“Where an operator is licensed in another Member State there is no risk at all,” he told the Court. “[But] a monopoly would expose consumers to a greater risk of fraud… A monopoly will lead people to the black market.
“Traditionally monopolies have been less regulated [than private companies],” he said. “The lack of regulation is indeed one of their weaknesses.”
The Portuguese Government, representing Santa Casa, countered Bwin’s and the League’s claim that Santa Casa had been permitted to greatly expand its gambling offering in Portugal by, amongst other measures, offering games over the internet, whilst the Government simultaneously defends the monopoly on the grounds of reducing gambling supply.
The ECJ’s 2003 Gambelli judgement upheld the right of gambling monopolies to diversify their distribution channels so long as they do not undermine overall policy objectives, the Portuguese government’s counsel, Senhora Duarte, said, pointing out that Santa Casa’s internet offering was limited to games already available offline and that a 2003 law specifically prohibited the sale of lottery scratchcards via the internet on player protection grounds.
“The 2003 law did not expand gambling. It just said that consumers would be able to use the internet, except for scratchcard games,” she said. “But if you look at Bwin’s site you will see that the secret to getting repeat customers is to offer a boundless range of games.”
“The liberalization of the gambling sector is a key political question and falls within the provisions of the individual Member States,” she concluded. “The logic of the market cannot force Member States to override a tried and tested legal system… Private initiative strives to gain profit and to maximise investment.
“The Portuguese Republic is quite clear on the objectives [sought in its gambling policy] and the legitimacy of those objectives. They are legitimate and relevant. They are inherent and part and parcel of a policy to control gambling, to prevent crime and to protect the consumer.”
Whilst the Court is required to rule only over the two specific questions referred by the Oporto court, it asked both parties, as well as delegates from other EU Member States, to comment on four more specific issues.
Included amongst these was the issue of whether a national monopoly could be legitimated on the grounds of preventing crime, and whether an alternative system of regulation could meet the same ends.
But the ECJ judges also asked whether a monopolized system for one form of gambling, such as betting, could be legitimate if that same Member State had in place a licensing system for another form, such as casinos.
Furthermore, the ECJ invited representations on whether a state monopoly operator should be prevented from offering its gambling services outside the borders of its home State.
Questions on the European Commission’s notification procedure relating to internet gambling, and the relevance of recent ECJ case law involving Sweden’s alcohol monopoly were also put forward by the ECJ’s reporting judge, Sir Konrad Schiemann.
The additional questions asked by the ECJ are certainly intriguing. And how deeply the Court chooses to answer its own questions will be observed extremely closely, particularly as the questions – on the comparison of different forms of gaming especially - resonate strongly through cases elsewhere in Europe.
Representatives from nine Member States, as well as the European Commission, made oral presentations in Luxembourg yesterday.
In drawing a close to the hearing, Advocate General Yves Bot said that he would issue his lead opinion on the Bwin/Santa Casa case on September 9, 2008. A final ruling is likely to follow several months later.
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