UPDATE 1-EU court says countries can ban online gambling

* Court says fighting fraud justifies ban

* Rulings are in Dutch cases involving Ladbrokes, Betfair

* Lobbying gaming group calls for European Commission action

* European interactive market worth 8.3 bln euros in 2009

*
(Adds gaming body comments)

By Foo Yun Chee

LUXEMBOURG, June 3 (BestGrowthStock) – EU countries can ban online
gambling if their aim is to combat fraud, Europe’s highest court
said on Thursday, dealing a blow to the multi-billion euro
online betting industry seeking to break domestic monopolies.

The European Union Court of Justice (ECJ) issued rulings on
two separate challenges involving online gambling in the
Netherlands.

De Lotto, a Dutch non-profit-making foundation which offers
games of chance, had asked a Dutch court to stop residents from
using British bookmaker Ladbrokes’ (LAD.L: ) online gambling
operation as it was not licensed in the Netherlands.

Ladbrokes appealed to the Dutch Supreme Court after the
lower court backed De Lotto. And the Dutch Supreme Court asked
the ECJ in 2008 to rule whether the Dutch licensing system was
compatible with EU law allowing for the free movement of goods
and services across the 27-country European Union.

In the second challenge, Betfair, the world’s largest online
gaming exchange, took its case to a Dutch court after Dutch
authorities refused to grant it a licence similar to others
given to two Dutch companies. The court subsequently sought
guidance from the ECJ.

The ECJ backed the position of the lower Dutch court on
Ladbrokes.

“Such a restriction may 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,” it said.
It cited the same rationale for the Betfair case.

“The grant to such an operator of exclusive rights to
operate games of chance, or the renewal of such rights, without
any competitive tendering procedure would not appear to be
disproportionate in the light of the objectives pursued by the
Netherlands legislation,” it said.

Lobbying group the European Gaming & Betting Association
(EGBA) said the judicial process could not resolve Internet
issues and urged the European Commission to take action on a
pan-European level.

“It is for the European legislator to ensure that this
IT-based medium which allows for the highest security standards
warrants consistent customer protection and fraud control
throughout the EU,” EGBA secretary-general Sigrid Ligne said.

A host of online gambling companies have taken several
European countries to court in a bid to break into lucrative
markets but have found it a tough battle.

Last September, the ECJ said countries could ban gambling
websites in order to fight crime.

Consultancy H2 Gambling Capital estimates the European
interactive market could be worth as much as 12.6 billion euros
($15.50 billion) by 2012, up from 8.3 billion euros last year.

Stock Market Today
(Editing by Sharon Lindores and Jon Loades-Carter)
($1=.8131 Euro)

UPDATE 1-EU court says countries can ban online gambling