Betfair Wins Legal Battle in the Netherlands

Published on: March 27, 2011 

As per reports in the local Dutch media, the online gambling operator Betfair has received a decision in its favor from the Dutch Council of State in the seven year old dispute against the Netherlands government. At the core of the issue was the right of online gambling operators like Betfair to provide services to Dutch citizens. Based on the advice given by the European Court of Justice, the Dutch Council of State held that the Dutch Ministry of Justice’s refusal to grant Betfair a license in the Netherlands was illegal. It also held that the licensing procedure followed by the Dutch government is in violation of European Union law. The media reports stated that the Dutch government is not eligible to appeal against this decision.

The dispute actually began in 2004 when the Dutch Ministry of Justice renewed the online gambling licenses of De Lotto and SGR without a transparent tender process. At the same time they rejected the application of Betfair. Betfair challenged this on two counts. Betfair claimed that under the European Union Treaty, the Dutch government was compelled to follow a transparent process for granting of licenses and had to apply the same criteria to all applicants. Also the Dutch government was compelled to accept the license of Betfair issued by the United Kingdom, which was a bona fide licensing authority in the European Union.

The issue got aggravated and went to the courts when the Ministry issued a letter to Dutch banks asking them not to process payments from Dutch customers wanting to make deposits at online casinos. This would prevent Betfair and other licensed United Kingdom operators from providing off shore services to Dutch customers. At that time Mark Davies, Managing Director at Betfair, released a scathing statement that said that the Ministry’s actions are against the interests of the Dutch consumer and are against the EU principles of open and fair competition. He pointed out that the Netherlands was one of the founding members of the single market and should not resort to illegal tactics to protect its own gaming monopoly and keep prices high. He added, “The government’s objective of shutting out foreign operators while feather-bedding domestic monopolies cannot be allowed to continue. We will fight anyone who unlawfully prevents us and our customers from doing business.”

Thereafter the Dutch courts asked for the opinion of the European Court of Justice. They were informed that the Dutch gambling laws were in violation of the EU principles and hence this decision. The Dutch government was probably expecting this decision. It has recently indicated that it is interested in putting some regulatory framework in place along the lines of the other European countries.

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