EC to Target Holland and Greece For Gambling Restrictions

After meeting later this week, the European Commission is expected to issue a final warning to Greece and Holland challenging their protectionist practices against foreign gambling operators, affecting online poker operators as well, to bring them into compliance with EU directives that give EU-based operators the free movement of goods and services between the 27 EU member countries, according to reports in Reuters this week.

The European Court of Justice (ECJ) has repeatedly ruled that EU states can restrict gaming, but only in a proportionate and non-discriminatory way.

Specifically, Commission officials will discuss the discriminatory exclusion of sportsbetting services preventing competition with state-supported monopolies in the two markets.

Failure to comply with any final warning issued, called a 'Reasoned Opinion', could result in legal action against Greece and Holland being taken in the ECJ (Judicial Phase- see explanation of steps the EC can take below).

Greek gaming company OPAP is an effective monopoly in its home market. It also competes with other operators in Cyprus.

In a move reminiscent of recent Swedish delay tactics to continue lucrative monopoly revenues, OPAP was described as playing a waiting game, according to a Greek analyst in the Reuters report. "This is not really an immediate problem for OPAP," the Athens-based analyst said. "Greece has said it is arguing for OPAP to be exempt from competition, and it will take a couple of years for a final decision to be taken by the EU in any case."

A spokesman for Commissioner McCreevy confirmed only that the Commission would discuss legal action at its meeting on Wednesday, and would reveal any decisions made on Thursday.

OTHER VIOLATORS THE EC IS CHALLENGING

EU Internal Market Commissioner Charlie McCreevy is overseeing legal action against 10 of the EU's 27 member states to crack down on government practices designed to protect state gaming monopolies from competition from EU-based gaming firms.

Most recently, the European Commission took the formal legal step of issuing a formal opinion to Sweden, giving Sweden two months from January 31 to show how measures to protect the Swedish state-owned gambling company, Svenska Spel, against non-state supported poker games and tournaments are compatible with EU law (click here for related article).

At the same time, the EC challenged Germany's new German Interstate law which came into force on January 1 that bans online gaming and betting (with the exception of horse racing). The law also bans financial institutions from processing transactions related to such 'illegal' online gambling services. Like Sweden, the EC gave Germany two months to respond to the Reasoned Opinion they issued.

HOW THE EC PROCEEDS

When challenging violators, the EC can proceed in three distinct stages (defined under Article 226 of the Treaty on European Union):

The first step's Letter of Formal Notice is usually unknown to the public, unlike later stages, unless the Commission decides to issue a press release if it feels a case is of exceptional significance to EU citizens (as when an infringement gave rise to a large number of complaints) as has been the case with gambling.

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