French Gambling Monopoly Loses Appeal

The highest appeals court in France, Cour de Cessation, has ruled against the French state-sponsored sports betting monopoly, Paris Mutuel Urbain, in a landmark case.

The appeals court handed down its ruling yesterday in its review of sanctions brought against Zeturf, a company trying to break into the online gambling on horse racing market. The online gambling news website GamingIntelligenceGroup.com reported Cour de Cessation as determining that the French gambling monopoly can only be legitimate if it part of a crime prevention initiative.

The ruling is in line with the legal opinion of the European Commission, which has publicly stated their position in regards to state-sponsored gambling monopolies within the European Union. To ensure the free movement of services within the EU, the rules only allow member states to prohibit gambling companies from operating within their borders if they are trying to ensure public health through protection from crime. They cannot prevent foreign gambling companies from accessing their citizens if that prevention is only to protect a state-sponsored gambling company from competition. The EC has stated any restrictions on gambling must be applied in a systematic and coherent fashion.

Only weeks ago, the EC formally served notice to France and Sweden to change the way they are approaching the gambling issue within their borders. They must either put blanket restrictions on gambling, or the only alternative is to allow gambling companies from other EU states to competitively participate in their market. This is good news for gamblers but bad news for state-sponsored companies such as Sweden's Svenska Spel or Paris Mutuel Urbain in France, as heavy competition is on the horizon.

If France and Sweden fail to act, the EC will likely refer both countries to the European Court of Justice within two months, which will almost certainly order the two countries to open their markets to foreign gambling operators if Sweden and France are unprepared to shut down their gambling monopolies.

EU governments are unlikely to prohibit gambling within their borders, as they would lose tax revenues. Free and open competition is the only likely result, as the EC has made it clear they will continue to investigate and take action against countries that appear willing to ignore rules relating to European free trade.

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