Online Gambling Developments in Holland

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The proponents of a unified regulated online gambling regime in Europe received a setback when The European Court of Justice ruled that online gambling in the European Union (EU) can be restricted by national governments, provided the bans can be suitably justified. This order was pronounced in the case of Holland.

In Holland there is a licensing system that allows the government to decide which operators can be permitted to access the Dutch online gambling market. Ladbrokes and Betfair are leading European gaming operators who have challenged this system in the courts because they have been denied legal access to Dutch online gamblers. In separate cases Ladbrokes and Betfair argued that they were licensed in the United Kingdom, which was a member of the EU. Therefore in accordance with European law, which permits free trade across member country borders, they should be allowed to serve online gamblers from Holland.

The European Court of Justice rejected this argument on the grounds that the EU laws on online gambling have not been harmonized. Hence licenses issued in other countries cannot automatically be held valid. The Court added, "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." The other reasons that could justify a prohibition were given as consumer protection, the prevention of incitement to squander money on gambling and the need to preserve public order.

The case was referred to the European Court of Justice by the Dutch court system for guidance on whether the national legislation on online gambling in Holland was consistent with EU rules. In Holland the state lottery De Lotto is exclusively permitted to offer new games and also to advertise their products. The European Court put the onus on the Dutch courts to ensure that the state gambling monopoly fulfills the stated objectives behind the restrictions and if gambling licenses are selectively awarded then fairness and transparency are taken care of. The Dutch Supreme Court is now expected to give its ruling in the Ladbrokes and Betfair cases later this year.

Following this judgment, Betfair has announced a change in tactics. Instead of seeking access to the Dutch online gambling market on the strength of its UK license, Betfair will apply for a Dutch license at the earliest opportunity and test whether Holland acts in a fair and transparent manner as required by the order of the European Court of Justice. Betfair's Director of European Public Affairs, Tim Phillips, said, "Today’s judgment once again demonstrates the need for the European Commission to take a lead on this issue, so that we can separate fact from fiction and settle the online gambling debate once and for all."

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