Last year, online sportsbook Bwin became embroiled in a battle with the Portuguese gaming authority over the right to offer internet betting in Portugal. The case was heard by the European Court of Justice (ECJ), and the final ruling has long-lasting implications for the state of internet gambling across the European Union.
Gambling in Portugal is highly restricted. Portuguese gambling laws dictate that all games of chance, including lotteries and sports bets, may only be offered by the state-operated group Santa Casa. This for-profit organization has held exclusive rights to Portugal’s gambling industry since 1783.
The nature of the internet, however, allows online gambling groups to effortlessly offer their services across international borders. This lead to a dispute between the UK internet sports betting group Bwin, and the government of Portugal. Portuguese authorities took offence when it became clear that Bwin was offering an Online sportsbook in Portugal. The matter was worsened when Bwin struck a sponsorship deal with the Portuguese Professional Football League – this amounted to a further violation of Portuguese gaming law.
Santa Casa fined both the country’s football league and Bwin, to the amount of €75,000 each, for breaching the Portuguese gaming organization’s exclusive right to promote and organize games of chance in the country. Bwin responded by taking the matter to Portuguese court, which in turn sought the ruling of the ECJ. The issue was simple: Bwin felt that Portuguese gaming law violated their right to offer their online sportsbook services freely to all EU member states.
The ECJ’s final ruling on the matter was shocking to many. The court concluded that Santa Casa’s monopoly was acceptable. Their reasoning is that while EU trade laws normally take precedence, local laws may override them in certain specific cases, especially where social needs are concerned. In the case of Portugal, the argument says that Santa Casa’s monopoly keeps online gambling in check, using strict oversight to prevent fraud and crime – oversight that is not possible in the case of foreign companies like Bwin.
While the EU and ECJ have yet to formulate a firm stance on the issue of online gambling, this case has opened doors that many online gambling operators wish had remained shut.