A bulletin from the Media & Sport Group at DLA Piper


Betfair files complaint with the EC over newly passed Cypriot laws that ban betting exchanges

This legal action challenges the Cypriot legislature’s unanimous move to prohibit betting exchanges and online casino games.

Betfair, the leading online betting exchange, filed a formal complaint with the European Commission (Commission) on 10 September 2012 in relation to recently passed Cypriot gambling legislation. This new legislation was passed in July of this year, the most fundamental feature of which is the prohibition of online casino (including poker) and betting exchanges. Therefore, only sports betting (other than exchanges) are permitted.

In a statement posted on its website, Betfair states that its complaint argued that “any attempted ban on betting exchanges is a discriminatory and disproportionate breach of EU law as it may apply only to exchange providers, with all other sports betting products remaining unaffected”.

Cypriot officials are defending the passing of this law by arguing that it would help minimise anti-money laundering and match fixing, allegations which Betfair deems “unfounded and misinformed”.

Commenting on the complaint, Martin Cruddace, Chief Legal and Regulatory Officer at Betfair said: “Having played a constructive role in the preparatory phase of a draft Cypriot law, we were disappointed with the inclusion of elements within it which could unfairly discriminate Betfair and in any event are clearly incompatible with EU law. We have therefore asked the Commission to review the matter and engage with the Cypriot authorities, with the aim of addressing the concerns raised in our complaint.”

Betfair has therefore asked the Commission to review the matter and discuss with Cypriot authorities, with a view to addressing the concerns raised by the complaint. 

ECJ’s opinion: OPAP monopoly is not in line with Treaty freedoms

Advocate General, Jan Mazak, at the European Court of Justice (the “ECJ”) is of the opinion that the Greek monopoly, Organismos Prognostikon Agonon Podosfairou AE (“OPAP”), contravenes provisions in the Treaty on the Functioning of the European Union (the “TFEU”), which require gambling monopolies to limit gaming opportunities.

Greece refused to issue Liverpool-based British bookmaker, Stanleybet, a licence to run, organise and operate games of chance in the country in 2004 and denied Sportingbet’s and William Hill’s applications in 2006 and 2007 respectively.  Sportingbet, Stanleybet and William Hill appealed these decisions to the Symvoulio tis Epikrateias (Council of State in Greece), which asked the ECJ for a preliminary ruling on the legitimacy and compatibility of OPAP with the TFEU.

In the consequent opinion for Stanleybet International Ltd (C‑186/11), William Hill Organization Ltd, William Hill Plc and Sportingbet Plc (C‑209/11) v Ypourgos Oikonomias kai Oikonomikon (Minister for Economic Affairs and Finance in Greece) and Ypourgos Politismou (Minister for Culture in Greece), the Advocate General stated that OPAP  is pursuing an aggressive expansionist commercial policy, and the exclusive right granted to it results in an increase rather than a reduction in the supply of games of chance, which is manifestly inconsistent with the purported objective of reducing the betting and gaming opportunities in Greece.

The Advocate General also remarked that the activities of Athens-listed OPAP were neither subject to strict control by the public authorities nor effectively limited by the legislative framework applicable to it.  As the exclusive right of the OPAP “to run, manage, organise and operate games of chance” does not contribute to limiting betting and gaming activities or to channelling players into controlled systems, it is incompatible with Articles 49 and 56 of the Treaty on the Functioning of the European Union, and therefore, it cannot be maintained in force during any transitional period.

The opinion is not binding and is subject to final decision at the ECJ.  However, the European Court of Justice tends to follow the opinions of advocates general in most cases.  The final ECJ ruling is expected to come out later this year.

The Opinion of Advocate General Jan Mazak was delivered on 20 September 2012.

The EC postpones the announcement of its action plan on online gambling

The EC has postponed the adoption of its action plan on online gambling to October at the earliest as it is not yet ready.

The European Commission announced on 27 June 2012 that it would provide an action plan on online gambling to be presented on 26 September, however this has been postponed as it is not yet ready.

Sigrid Ligné, Secretary General of the European Gaming and Betting Association, said following the announcement by the Commission of the action plan that:

“European demand for online gambling services continues to grow. As with other areas of eCommerce, European consumers have been voting with a mouse-click. If there is no legal framework to permit popular products to come to market, consumers can be expected to turn to unlicensed and unregulated operators, with all the associated risks. Greater coordination between member states is therefore vital to ensure effective regulation and protection for consumers”.  

The plan will seek to address the demand for a unified regulatory system as there is currently no EU legislation which harmonises the gaming and betting industry. It is thought to include sections on consumer protection, fraud prevention and preserving the integrity of sport.