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France, Italy, Austria get EU warnings on gaming laws

EU

France, which got a separate warning yesterday about takeover restrictions, and Italy are blocking online sports betting services from abroad while letting domestic companies into the business, said the European Commission, the EU's executive branch, in a written statement. The agency also questioned Austrian restrictions on advertising of foreign casinos. The gambling cases have gained urgency from a series of arrests in the US and in France, which on September 15 detained two executives of BWIN Interactive Entertainment AG, an Internet bookmaker based in Austria. The commission „has received a large number of complaints from operators” about discriminatory laws, Internal Market Commissioner Charlie McCreevy said in yesterday's statement. „I also have concerns about the legal uncertainty suffered by EU sport betting operators and related stakeholders.” The BWIN executives, who have been released from custody, are charged with violating local gambling laws. The company has said French authorities were acting on a complaint by the country's gaming monopoly Francaise des Jeux.

PriceWaterhouseCoopers LLP estimated the 2005 total gaming market at $3.1 billion in France, $603 million in Italy and $485 million in Austria. Italy is in the midst of opening up its gaming market to foreign operators by licensing more sports betting and horse racing shops and so-called „remote gaming” by Internet and telephone. Italy got its second warning of the year, as one of seven countries named by the commission in an April 4 notice. Yesterday's actions represent an initial threat, which would be followed by a more detailed opinion before the commission could file suit at the EU's highest court. The other countries put on notice earlier this year were Germany, the Netherlands, Hungary, Sweden, Denmark and Finland. The commission separately gave France a final warning to repeal a law guarding against foreign takeovers in security industries and casinos, as part a series of legal challenges to economic protectionism. The cases expand the commission's campaign against obstacles to competition within the 25-nation EU. The agency says removing internal borders for business has created more than 2.5 million jobs and €877 billion ($1.1 trillion) of wealth since 1993.

The commission is challenging France's December 31 takeover law, which requires government approval for a company from abroad to make acquisitions in 11 designated industries. The law covers computer network security, encryption, vaccines and casinos. The French government has argued the decree protects national security, beyond the reach of EU rules. Casinos are covered to ensure they aren't abused by criminals to launder money or terrorists to finance their activities. The commission issued a first warning April 4, objecting that France could safeguard strategic technologies with less restrictive measures that don't discriminate against foreign companies. The agency also objected that gambling houses are already covered by laws against money laundering. Yesterday's action counts as a final warning, giving the French government two months to change its law or persuade the commission not to file suit at the European Court of Justice in Luxembourg. (Bloomberg)

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