PROMISING LEGAL NEWS FOR LADBROKES

1 June 2007

Norway could be in breach of European internal-market rules

Positive mid-week news from Luxembourg is that the European Free Trade Association court (EFTA) has ruled that the action by Norway in refusing UK gambling group Ladbrokes access to its gambling market could represent a breach of European internal-market rules.

A further hearing on the issue will now have to take place in a Norwegian court in Oslo, which will refer to the EFTA opinion in reaching a judgement on the case.

Following a Norwegian government rejection of its attempt to obtain permission to operate in Norway, Ladbrokes sought legal relief, asking that the rules giving exclusive monopolies in lottery and sports betting to Norsk Tipping and Norsk Rikstoto be struck down.

Reuters reports that the EFTA court, sitting in Luxembourg, found that the Norwegian government measures did not genuinely address concerns of battling gambling addiction and crime - Oslo's justification for restricting commercial companies in the business.

"A system based on an exclusive right ... completely denies private operators access to the respective market and thus encroaches upon the freedom to provide services and the right of establishment," the EFTA court said in a statement.

Norway also said that gambling companies must use their money for socially beneficial purposes, but the court rejected that argument, saying: "The motive of financing benevolent or public-interest activities cannot in itself be regarded as an objective justification for restrictions on free movement."

The EFTA court, which deals with cases from non-EU countries Norway, Iceland and Liechtenstein, uses the same rule book as the European Union in issues of free movement of goods and capital, which often affect cross-border businesses, reports Reuters.

This means the top court of the EU 27-member bloc, the European Court of Justice (ECJ), sometimes takes EFTA judgments into account although there is no requirement to do so.

In March, the ECJ criticised Italy over restrictions placed on Stanley International Betting. The European Commission, whose decisions can be challenged at the ECJ, is currently investigating betting markets in Germany, the Netherlands and Sweden.

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