Governments may reject commercial operators – No obligation to recognise licenses of foreign operators

30 May 2007 – Today the Court of the European Free Trade Association (EFTA) in Luxemburg once again denied a commercial gambling operator the right to access the gambling markets of a member state of the European Economic Area (EEA). Today’s ruling follows a judgment by the same court in March 2007, equally on a Norwegian case, in which the court explicitly upheld the country’s monopoly system on gaming machines.

The EFTA Court ruled that where the State holds a monopoly to offer gambling services, “national authorities have the right to ban the provision and marketing of games of chance from abroad, no matter whether or not these are lawful in their State of origin” (paragraph 5 of the judgment).
Dr Winfried Wortmann, President of the European State Lotteries and Toto Association (European Lotteries, EL) welcomed the Court’s decision: “Whatever the claims of commercial operators in the pages of the press have been over the past months and years. The EFTA Court has made clear once again that gambling services providers need a license from the State in which they want to offer their services and advertise. European law does not require the mutual recognition of operating licenses”

Dr Winfried Wortmann, re-elected last week to be President of European Lotteries for another two-year term, added: “This is the third defeat for the supporters of a commercialisaton of gambling before a European court this year. In March both the European Court of Justice (ECJ) and the EFTA Court reiterated their standing jurisprudence, according to which Member States are free to define their gambling policy objectives and to determine in detail the level of protection for their citizens, as long as they pursue public interest objectives, such as preventing problem gambling and fighting crime, in a systematic and consistent manner. This includes the option to give an exclusive right (monopoly) to a single state-owned operator, as explicitly recognised by the EFTA Court in its judgment of 14 March 2007.”

Europan Lotteries is the association of the European state lotteries and toto companies and represents 74 organisations across Europe.

For further information, please contact:
Tjeerd Veenstra – EL Legal Spokesman + 31 6 53 347 410
Philippe Vlaemminck – EL Legal Advisor + 32 (0)9 265 76 20
Rupert Hornig – EL General Delegate, Brussels + 32 (0)2 401 6188

Notes to the editors
The EFTA court parallels the work of the EU’s European Court of Justice with regard to the legal obligations of EFTA member countries Norway, Iceland and Liechtenstein in the European Economic Area (EEA). All 27 EU countries and all EFTA countries (except Switzerland) are members of the EEA. The EEA agreement knows the same “market freedoms” (freedom of provision of services and of establishment) as the EC-Treaty that binds EU countries.
Today the EFTA Court gave a (binding) advisory opinion to a Norwegian court which had asked whether national gambling legislation was compatible with the EU and EEA market freedoms related to establishment and cross-border provision of services. UK-based bookmaker and gaming company Ladbrokes seeks entry to Norway’s gambling markets before this national court. The EFTA Court dismissed the claims by Ladbrokes in all major points. The full text of the judgment (case E-3/06) is available at: www.eftacourt.lu
Since 2005 Ladbrokes has been denied entry to gambling markets in Sweden, the Netherlands, Denmark and Finland where national courts, arguing that the European jurisprudence on gambling was clear, did not even refer the cases to the European Court of Justice.