ECJ confirms authority of member nation governments but cautions against discriminatory practices.
The editors of the Swedish newspapers Expressen and Aftonbladet appear to have won a qualified victory in the European Court of Justice this week; whilst the court confirmed the authority of individual governments within the EU to control online gambling advertising, it emphasised that such authority should not be wielded in a discriminatory manner.
The case was brought before the court by the Swedish judicial system which asked for guidance after Swedish courts wrestled with the compatibility of domestic law with EU requirements.
The case is rooted in online gambling advertisements placed with the Swedish newspapers in 2004 by non-Swedish companies based and licensed in other European Union countries.
Criminal action and penalties were imposed on the newspapers by local enforcement after complaints by the country’s lottery officials that the advertisements were against the law – at that time heavily exclusive and favouring the state-owned Svenska Spel.
In it’s ruling, the ECJ panel said: "Swedish legislation which prohibits the promotion of gambling organised on the Internet by private operators in other member states for profit is consistent with Community law."
It said national bans could be acceptable on cultural, moral or religious grounds, again confirming the sovereignty rights of individual EU states.
Last month, the ECJ found that a Dutch ban was justified to combat fraud. This followed a verdict in September last year that crime-fighting efforts could justify prohibition.
However, in the matter of the Expressen and Aftonbladet case, an issue of discrimination had been raised.
Swedish rules imposed criminal sanctions for the advertisement of gambling organized by offshore sites, but merely lower administrative penalties for promoting gambling organised in Sweden without a licence, and on this aspect the Court ruled that there should be no discrimination.
"Community law precludes national legislation which penalises the promotion of gambling organised in Sweden without a licence differently from that of gambling organised outside Sweden," it said.
The European Gaming and Betting Association, a trade association that includes most of Europe’s large internet gambling groups among its membership, urged EU countries to recognise the growing popularity of online gambling and said legal rulings would not resolve the issue.
"It is up to the legislator to embrace the reality of online gaming and betting in Europe,” said Sigrid Ligne, the association's secretary-general, said in a statement.
“Italy, France and the UK have introduced online gaming legislation and Denmark is set to follow suit in 2011."
European Lotteries, an umbrella group for licensed national lotteries in 40 European countries, told the Reuters news agency that the court verdict validated national monopolies.
"The court has given full backing to the gambling model we stand for, a model from which the whole of society benefits," the group's president, Friedrich Stickler, said in a statement.
"It has once again rejected the arguments of the many private online gambling operators which pursue purely commercial interests."
Consultancy H2 Gambling Capital estimates the European interactive market could be worth as much as 12.6 billion euros (10.5 billion pounds) by 2012, up from 8.3 billion last year.
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