European Commission Investigating France, Italy, Austria

The European Commission announced last week that official "requests for information" on state legislation restricting the supply of gambling services have been to sent to EU powerhouses France, Italy and Austria.

Last month, French police crashed a promotional party for Monaco Football Club, and arrested two Austrian BWIN sportsbetting executives for advertising gambling services inside French national borders. The police action was believed to be instigated by the state-owned lotto company, which wishes to retain its monopoly on the right to advertise gambling services in France.

Following the BWIN arrests, there were widespread calls throughout Europe for the European Commission to investigate individual EU states that appeared to have protectionist laws regarding gambling. Article 49 of the EC Treaty guarantees the free movement of services throughout Europe, and EC guidelines clearly state that national measures against private operators must be "necessary, proportionate and non-discriminatory". The EC was already investigating seven EU states in regards to sportsbetting prior to the French action against BWIN.

France, Italy and Austria have two months in which to answer to the EC. Charlie McCreevy, internal market and services commissioner, highlighted the fact that the EC has an obligation under the Treaty to ensure that all Member States fully comply with EU law: "The Commission has received a large number of complaints from operators and I have made no secret of the fact that I intend to pursue these inquiries."

The EC investigation will not bring about liberalization of the European online gambling market directly, but that may still be the end result. Member States cannot restrict their citizens' access to online gambling services if, at the same time, they incite or encourage them to participate in state-sponsored games of chance or betting. Individual Member States will need to decide whether to ban all forms of gambling nationwide or allow free and unfettered access to widespread betting services.

It is unlikely that individual Member States will see prohibition as an option. Market liberalization across Europe for online gambling is the far more likely result.

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