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According to the London Financial Times, Britain’s biggest betting and gaming groups are entitled to take legal action against the Italian Government. This follows after the abrupt regulation issued by the Italian Ministry of Finance and Economics to block over 600 licensed websites.
The Italian Budgetary measures of 2006 and the Fiscal Decree of the 7th February 2006 connected therewith provide that ISPs in Italy should block websites that are not licensed in Italy. Violation of this legislation would lead service providers being fined EUR180,000 each time they allowed Italian internet users to access sites on a blacklist of online gambling operators.
Martin Cruddace, legal director of Betfair, a company that was licensed amidst much aplomb in Malta last year, has protested against the blockade. In his opinion, “it’s pretty galling.”
In his opinion, the new UK Gambling Act is very liberal and does not block Italian websites. In fact, now it permits offshore websites licensed in any EU country to freely advertise and market their business in the UK.
On the other hand, Ladbrokes, the UK’s largest bookmaker said that the Italian blockage was another example of national governments trying to override competition in betting.
The Italian State has declared that this “oscuramento”, to be made effective on Friday 24 February 2006, is intended to protect Italian players from ‘phishing’ and not to protect the Italian Monopoly. Whatever the intention, it is very clear that the Italian Finance Act, which came into force without prior notification to the Commission as foreseen by the ‘Transparency’ Directive 98/34/EC, discriminates against operators which are not licensed in Italy, and violates at least five categories of EU principles, namely, the freedom of establishment and freedom to provide cross-border services as enshrined in Articles 43 and 49 of the EC Treaty and the recent ECJ case law; the freedom to supply telecommunication services as per Directive 2002/20/EC on the Authorisation of Electronic Communications Networks and Services; Personal data protection contained in Directive 2002/58/EC on Privacy and Electronic Communications; State aids rules in Article 87.1 of the EC Treaty; and the notification of technical standards and regulations affecting services of the information society in Directive 98/34/EC laying down a procedure for the provision of information in the field of technical standards and regulations.
The Commission has so far however failed to address the complaints for these breeches of EU law which were filed by a number of well established Community operators active on the Italian market, thus encouraging the Italian Government to maintain its illegal gambling legislation and to seek to adopt new and even more restrictive measures. Didier Dewyn, Secretary General of the European Betting Association (EBA) opines that “We need the Commission to do something and to accept and discharge its responsibilities. It has to ensure the respect of EU law. Urgent action is needed unless they want the EU business community to believe that the Internal Market is a joke". This standing is also shared by the head of the German Liberal delegation in the European Parliament, Karin Riis-Jørgenstein, who believes that the de-regulation of gaming at EU level will lead to an increment in the number of court cases and complaints addressed to the European Commission.
These restrictions on the national gambling market signify that Italian citizens will no longer have access to the sites stipulated in a list issued by the Amministrazione Autonoma Dei Monopoli Di Stato (AAMS) which includes some major operators licensed in Malta and in the UK. Naturally, the drastic economic consequences that arise out of this boycott has led many operators to call for an official meetings with the Lotteries and Gaming Authority and with the Gaming Board respectively to verify the options available at diplomatic level in attacking this Italian measure.
In an interview with the Centro Studi Italiano del Gioco, Mario Galea, Chief Executive Officer with the Maltese Lotteries and Gaming Authority, has asserted that it is not the intention of the Maltese Regulator to challenge the Italian Regulator for the time being. LGA seems to have taken a wait and see approach to assess the impact of this Italian measure before taking any action. On the other hand, Britain’s largest betting and gaming groups are already threatening to take remedial action against the Italian Government.
In the end, although national governments within the EU are allowed to restrict cross-border services on moral grounds, such restriction is not permissible for restricting competition within the Internal Market. Even though it might be too optimistic to state that the European Commission will fully liberalise the European Gaming market, it is hoped that any EU regulation will preclude member states from invoking imperative reasons of public order to justify gaming restrictions.
As a conclusion it is sad to note that our fledging gaming sector can now be threatened by the protectionist move by our Italian neighbour. This is regrettable but one hopes that the Ministry of Finance will address the issue at the highest political level in order to remove the embargo.
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