The European Court of Justice has upheld the right of Portugal’s gambling authority to fine Bwin Interactive Entertainment AG, EUR74,500 for concluding a sponsorship deal with the Portuguese professional football league in 2005. The agency in Lisbon said the deal breached the exclusive gambling rights awarded to Santa Casa da Misericórdia de Lisboa (Santa Casa).
Santa Casa claimed that Bwin´s sponsorship agreement with the Portuguese professional football league and accompanying advertising activities were illegal because of Santa Casa’s monopoly in providing on and offline lottery and betting services in Portugal.
According to the ECJ, the Portuguese monopoly on the Internet may comply with Community law under certain conditions, but restrictions imposed by a Member State “must be suitable for achieving the objective or objectives invoked by the Member State concerned, and they must not go beyond what is necessary in order to achieve those objectives. Lastly, in any event, those restrictions must be applied without discrimination.”
Sigrid Ligné, Secretary General of the European Gaming & Betting Association: “Given the stringent anti-fraud regulations applicable to EU licensed operators which ensure a high level of integrity, transparency and traceability over online gaming transactions, we do not believe those conditions are met. Several jurisdictions in the EU already prove that it is possible to guarantee a high level of consumer protection and have a well regulated and competitive online gaming market at the same time.”
The judgment must also be seen in the context of the increasing number of Member States that are now in the process of rethinking and redrafting their gaming legislation. As has been obvious for all other consumer markets before, none of the Member States currently drafting legislation has chosen a monopoly model to regulate a modern Internet based market.
The ECJ is still expected to rule on several other disputes involving state gambling monopolies, notably in Germany and the Netherlands.
A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
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