EU Rejects French & Swedish Gambling Monopolies, Says Change or Face Court

The European Commission (EC), an executive arm of the European Union (EU), met yesterday and issued final warnings called 'Reasoned Opinions' to France and Sweden after rejecting their explanations for their protectionist gambling monopolies. If corrective action is not taken, the countries will be sued by the Commission in the European Court of Justice (ECJ).

The EC has been targeting member nations whose national gaming regulations are contrary to higher level EU laws that permit companies licensed anywhere in the EU to freely move goods and services across EU state borders.

REASONS CONTRARY TO EU POLICY

According to the Commission, countries cannot claim that their policies protect consumers from gambling if, at the same time, they encourage people to participate in state lotteries and other gambling entities that contribute to the government.

Coincidently, this is the same argument that Antigua & Barbuda argued and won at the World Trade Organization (WTO) against the United States, citing U.S. law as protectionism and in violation of are long-standing trade treaties (click here for related article).

The EC also says member nations cannot claim their gambling monopolies are non-profit operations when they have strict annual revenue targets and rely on retail outlets to market those services. Nor can they prevent competition with state-supported gambling monopolies through laborious regulatory hurdles, as Sweden has done.

EU GAMBLING PROCEEDINGS vs. 10 MEMBERS

The Commission has had infringement proceedings underway against ten member nations with monopolistic or protectionist gambling policies. Besides France, Sweden and Greece, the EC also has had cases underway against Austria, Denmark, Finland, Germany, Hungary, Italy and the Netherlands.

Proceedings consist of three distinct stages (defined under Article 226 of the Treaty on European Union):

The first stage'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.

After Denmark, Finland and Hungary replied to the Commission's written request for information, the European Commission resolved their cases.

On Wednesday, Greece was sent a Formal Notice asking for information about its criminal proceedings against Greek market makers, while the Greek government's publicly listed OPAP company freely maximizes profits.

France and Sweden were sent requests for information in letters of formal notice in April and October 2006 about their gaming and gambling monopolies. After reviewing the French and Swedish replies, the EC on Wednesday decided to move to the second stage. They issued a reasoned opinion, or final warning, for France and Sweden to correct their incompliant behavior, or face the European Court of Justice.

If the Commission fails to receive a satisfactory reply within two months, or if the restrictions to which the Commission has objected are not removed, it can refer the proceedings to the ECJ.

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