EU law allows for bans on foreign online gambling operators, says top court advisor

European law allows countries to ban the promotion of onlinegambling sites based abroad, according to an advisor to the EU'shighest court.

An Advocate General to the EU's Court ofJustice has advised judges at the Court that a Swedish law banningforeign internet gambling sites from operating there does notviolate EU law.

The EU was founded on the principle of freetrade across its borders, but allows some restrictions to thattrade to apply.

Sweden bans the promotion of online gamblingbased outside of its borders, and also bans the operation of anylottery not licensed by it.

Two newspapers ran adverts for online gamblingand lottery sites based in the UK and Malta on their sportspages.

Otto Sjöberg was editor in chief and publisherof Expressen and Anders Gerdin was editor in chief and publisher ofAftonbladet. The two men were found to infringe Swedish betting lawand fined 1,000 Swedish Krona, about €100, a day for 50 days.

They appealed against the ruling and theStockholm Court of Appeal asked the Court of Justice if Swedish lawwas in line with EU law.

Yves Bot is an Advocate General, a legaladvisor to the Court who issues an opinion on a case which can thenbe followed by its judges or ignored.

He has said that Sweden is entitled to banforeign-based online gambling because it had a good reason to doso.

"The prohibition on promoting internet gamingoffered by companies established in other Member States can beregarded as justified by the objective of the fight against fraudand criminality," said a Court-produced summary of the advice. Thefull advice is not available in English.

"Community law does not preclude Swedishlegislation which reserves the right to organise gambling only tolicensed operators which carry on their activities under the strictsupervision of the public authorities," said the summary.

Bot said, though, that while the basicprinciple of Sweden's law did not run counter to EU rules, the wayit penalised infringements did.

"While a Member State is entitled to restrictactivities associated with gambling within its territory, themeasures which it adopts for that purpose must not bediscriminatory," said the summary of his findings. "In the presentcase, although Swedish legislation prohibits, without distinction,the promotion of gambling organised abroad and the promotion ofgambling organised in Sweden without a licence, the penalties laiddown for infringement of that prohibition are different."

The law could only comply with EU laws if thosewho operate foreign gambling operations and those who operatedomestically without a licence are punished in the same way, theadvice said. This prevents discrimination against foreign-basedoperations, it said.

"Whereas penalties of a fine and imprisonmentfor up to six months are laid down for persons who advertise gamingorganised abroad, those who advertise gaming organised in Swedenwithout a licence do not incur equivalent criminal penalties, butonly administrative penalties," said the summary of Bot's opinion."Therefore, such legislation involves treating comparablesituations differently, to the detriment of companies establishedin other Member States."

"That difference in treatment could not bejustified by significant differences between the two categories ofoffence in terms of the disruption caused by them or the conditionsunder which they may be found to have been committed," it said."Internet gaming organised by a company established in anotherMember State does not necessarily pose greater risks of fraud andcrime to the detriment of consumers than gaming organisedclandestinely by a company established within the nationalterritory."

The Court of Justice had previously ruled thatItalian practice barring companies whose shares were traded onregulated markets from operating online betting were in line withEU law. The Court said that the law was not and that it restrictedthe fundamental freedoms guaranteed by EU law.