French meet their Waterloo in Malta Court ruling

[jetset]

FRENCH DEFEATED IN MALTA COURT ONLINE GAMBLING RULING

Zeturf judgement by a French court will not be enforced

A Maltese court of appeal has refused to enforce a judgment by a French court in a case brought by the French horse racing operator Pari Mutuel Urbain (PMU) against the Malta-based online bookmaker Zeturf.

The original judgment by the French tribunal in July 2005, upheld by the Paris court of appeal in January 2006, had ordered Zeturf to cease taking bets on horse races held in France, reports e-Gaming Review.

However, the Maltese court concluded that “the matter was of administrative nature and therefore falls outside the scope of the EC regulation”. It said PMU was “incorporated as a commercial entity and yet regulated by an ‘ad hoc’ law that gives it power that is usually not allocated to private enterprise”.

Although PMU has repeatedly denied that argument, the Maltese court concluded that it “is an entity of an administrative nature that is singularly empowered to shape and enforce French policy on gaming matters”.

Thibault Verbiest, senior partner at Ulys law firm, said the ruling was very good news for the online gaming sector, although the motivating factors behind it were unexpected and the ruling had to be examined closely. The legal repercussions of the case in Europe would depend on how well-founded the ruling turns out to be and whether other countries can follow it.

“The reasoning seems to be that PMU is a private company, but has powers equivalent to those of a state monopoly. Because of this, the case is to do with administrative law rather than civil or commercial law, and the Maltese court is saying it does not have the competency to rule on ‘administrative’ cases,” Verbiest said.

Verbiest added that PMU was the manifestation of the French state’s horse racing operations through a private commercial entity. “This is an important setback for PMU, on a PR level it is disastrous and highlights the environment in which PMU operates in France,” he said.

The Malta Lotteries and Gaming Authority, which regulates egaming in the jurisdiction, said the decision strengthened the jurisdiction’s position in the European online gaming sector.