EU bars Ladbrokes from taking Dutch bets

In a landmark decision Ladbrokes have lost a long running legal battle to overturn an injunction which stopped them from taking bets from people living in Holland. The marathon battle has lasted 7 years and could lead to Britain and other countries banning foreign online gambling sites.

The injunction was granted to De Lotto, who run the Dutch lottery, after they argued that Ladbrokes did not have a licence to operate gaming activities in the Netherlands. Ladbrokes appealed to the Dutch Supreme Court, who in turn passed this to the European Court of Justice to rule on. They acknowledged that Dutch gaming legislation is technically a restriction on EU rules guaranteeing freedom of movement and freedom to provide services, but however also said that such a restriction; ‘may be justified 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’. They decided that it was up to national authorities to decide on the measures needed to protect consumers, as currently there is no EU-level harmonisation of the online gaming industry.

The judgement stated that; ‘A member state is therefore entitled to take the view that the mere fact that an operator such as the Ladbrokes companies lawfully offer services in that sector via the internet in another member state is not a sufficient assurance that national consumers will be protected.’

Ladbrokes had a licence, issued in the UK, which meant it could offer ‘sports-related prize competitions and other games of chance’ via the telephone and the internet, and their argument was that this allowed them to operate elsewhere in the EU. They claimed that the UK licence was subject to ‘very strict legislation for the prevention of fraud and of addiction to games of chance’ – and the Dutch ban on its internet services to Dutch gamblers amounted to an unnecessary ‘duplication of controls and safeguards’.

In the ruling though, just made today, the judges stated; ‘A member state can prohibit the operation of games of chance on the internet. This prohibition may, on account of the specific features associated with the provision of games of chance on the internet, be regarded as justified by the objective of combating fraud and crime.’

Last December, after losing an earlier stage of the legal battle, John Reilly, Ladbrokes’ Managing Director of Remote Betting and Gaming, urged the judges to ‘uphold principles of free and fair competition across borders as there is no logic in the fact that the Dutch monopoly could freely compete against us in the UK but we are prevented from accepting bets from any Dutch resident that finds us on the internet.’

This news is a blow for Ladbrokes, and will probably lead to a few sleepless nights for a few other operators too.

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