Top French court rules against gambling monopoly
PARIS: France's top court has overturned a decision that banned a Maltese company from offering online betting on horse races in France, adding to pressure from the European Commission for an end to the French state monopoly.
Under European Union rules, limits to competition, even those "stemming from limits on gaming as a special or exclusive right, cannot be justified," the Cour de Cassation said Wednesday.
Such restrictions can only be used to block gaming companies from "criminal or fraudulent" activities by "channeling them through controllable avenues," the Paris-based court said in its ruling dated Tuesday.
The decision sends the case against Zeturf, a Maltese Internet gambling company, back to a Paris appeals court for a retrial. It could take up to a year for the retrial to come to court.
Zeturf was ordered by the appeals court to suspend its operations in France on Jan. 4 or face daily fines of €50,000, or $68,800, after a complaint by Pari Mutuel Urbain, or PMU, the French monopoly operator of betting on horse racing, sports, lotteries and other forms of gambling.
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Last month the European Commission threatened to sue France, Sweden and Greece for blocking foreign betting companies. Ending such monopolies could help companies like Bwin Interactive Entertainment of Austria and Stanley Leisure, the U.K. casino operator owned by Genting, compete with French providers.
"The Cour de Cassation has struck down this decision, recalling the interpretation given by the European Court of Justice to article 49 of the treaty establishing the European Community, which guarantees free provision of services," the court said Wednesday.
The judges who heard the case also said the appeals court had not sought to discover whether the French government was upholding the monopoly simply to increase state revenues.
PMU said in a statement that the "debate remains open."
The court's decision could also affect La Francaise des Jeux, the government-controlled monopoly that runs gambling for football and other sports in France.
A complaint by that organization led to the arrest in September of two Bwin executives during a trip to France. The executives have been placed under formal investigation for violating gambling laws.
Sports betting and gambling are state-owned monopolies in many EU countries, generating large amounts of revenues for government coffers but thwarting attempts by private-sector rivals to compete for business.
PMU said the Cour de Cassation ruling comes two weeks after it won a decision before the Tribunal de Grande Instance in Paris that ordered Eturf to stop offering information on horse races through its Web site and fining the French company €120,000.
Guillaume de Roquemaurel, the Eturf president, called the June ruling "shocking" during a telephone interview Wednesday. "There is no monopoly on information," he said.
Eturf, which Roquemaurel says has no ties to Zeturf, will appeal the June 27 decision. Calls and e-mail messages sent to Zeturf, based in Guardamangia, Malta, were not returned.
Charlie McCreevy, the EU financial services commissioner, has said he wants to foster competition where gambling is allowed, not to force countries to legalize it.
Domestic operators cannot be considered nonprofits, the commission said in the June 27 statement. France has two months to respond to the commission's concerns.
Under European Union rules, limits to competition, even those "stemming from limits on gaming as a special or exclusive right, cannot be justified," the Cour de Cassation said Wednesday.
Such restrictions can only be used to block gaming companies from "criminal or fraudulent" activities by "channeling them through controllable avenues," the Paris-based court said in its ruling dated Tuesday.
The decision sends the case against Zeturf, a Maltese Internet gambling company, back to a Paris appeals court for a retrial. It could take up to a year for the retrial to come to court.
Zeturf was ordered by the appeals court to suspend its operations in France on Jan. 4 or face daily fines of €50,000, or $68,800, after a complaint by Pari Mutuel Urbain, or PMU, the French monopoly operator of betting on horse racing, sports, lotteries and other forms of gambling.
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Last month the European Commission threatened to sue France, Sweden and Greece for blocking foreign betting companies. Ending such monopolies could help companies like Bwin Interactive Entertainment of Austria and Stanley Leisure, the U.K. casino operator owned by Genting, compete with French providers.
"The Cour de Cassation has struck down this decision, recalling the interpretation given by the European Court of Justice to article 49 of the treaty establishing the European Community, which guarantees free provision of services," the court said Wednesday.
The judges who heard the case also said the appeals court had not sought to discover whether the French government was upholding the monopoly simply to increase state revenues.
PMU said in a statement that the "debate remains open."
The court's decision could also affect La Francaise des Jeux, the government-controlled monopoly that runs gambling for football and other sports in France.
A complaint by that organization led to the arrest in September of two Bwin executives during a trip to France. The executives have been placed under formal investigation for violating gambling laws.
Sports betting and gambling are state-owned monopolies in many EU countries, generating large amounts of revenues for government coffers but thwarting attempts by private-sector rivals to compete for business.
PMU said the Cour de Cassation ruling comes two weeks after it won a decision before the Tribunal de Grande Instance in Paris that ordered Eturf to stop offering information on horse races through its Web site and fining the French company €120,000.
Guillaume de Roquemaurel, the Eturf president, called the June ruling "shocking" during a telephone interview Wednesday. "There is no monopoly on information," he said.
Eturf, which Roquemaurel says has no ties to Zeturf, will appeal the June 27 decision. Calls and e-mail messages sent to Zeturf, based in Guardamangia, Malta, were not returned.
Charlie McCreevy, the EU financial services commissioner, has said he wants to foster competition where gambling is allowed, not to force countries to legalize it.
Domestic operators cannot be considered nonprofits, the commission said in the June 27 statement. France has two months to respond to the commission's concerns.