Swedish & Germany Online Gambling Monopolies Facing EU Legal Action

Reports are breaking online that the European Commission has today commenced legal proceedings against Germany and Sweden for protecting state-owned online gambling monopolies in direct violation of EU laws.

A number of countries in Europe have decided to test the European Commission over online gambling monopolies, and they have found the Commission to be a worthy opponent. The EU's Internal Market Commissioner, Charlie McCreevy, has given Sweden and Germany two months to prove state-sponsored monopolies within their borders do not contravene EU law.

Both countries will face difficulties in proving they are not protectionist in their online gambling policies. Sweden's government-owned online gambling company Svenska Spel enjoys free rein within Sweden as foreign operators are prohibited from providing online gambling services to Swedish residents.

Germany recently passed the Interstate Treaty on gambling which bans private operators from providing games of chance via the internet, or advertising online gambling to German residents.

If Sweden and Germany fail to prove to the Commission that their online gambling policies do not breach EU free-market rules, the cases will be sent to the European Court of Justice (ECJ). The ECJ has the power to force EU member states to change their laws or face financial penalties.

The ECJ will almost certainly rule against any member state seeking to protect government-owned monopolies, having already ruled against Italy in a similar case last year. The ECJ ruled that Italy cannot stop gambling companies licensed in another EU nation from taking bets within Italy, warning the Italian restrictions were incompatible with European Community principles.

Despite the EC's apparent willingness to enforce EU free-trade rules, a number of European countries appear willing to test the resolve of the Commission in regards to this issue. McCreevy appears a tough customer though, and protectionist nations within Europe are in for a battle.

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