Top French court rules against gambling monopoly

Top French court rules against gambling monopoly
Bloomberg News, Reuters
Published: July 11, 2007

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 court, the Cour de Cassation, said Wednesday as it announced its decision.

Such restrictions can be used only to block gambling companies from "criminal or fraudulent" activities by "channeling them through controllable avenues," the court, based in Paris, 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 rehearing. It could take up to a year for the case to come back 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 British casino operator owned by Genting, compete with French providers.

The judges who heard the case at the Cour de Cassation 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."

Sports betting and gambling are state-owned monopolies in many EU countries, generating large amounts of revenue for government coffers but thwarting attempts by private-sector rivals to compete for business.

PMU said the Cour de Cassation ruling came two weeks after it won a case before the Tribunal de Grande Instance in Paris that ordered Eturf, of France, to stop offering information on horse races through its Web site and fining the 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 force countries to legalize it.

France has two months to respond to the commission's concerns