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The recent decision of the European Court of Justice (see Landmark Decision of the ECJ on European gaming monopolies) in the Bwin vs. Santa Casa dispute might have considerable side effects on the online gaming business. The court held that overriding reasons in the public interest justify limitations set forth by local gaming laws to the principle of freedom to provide services set forth in the EC Treaty.
In practical terms, it means that in theory any EU Member State could implement laws requiring that gaming operators can offer their games to people located in their country only if they obtain a local gaming license. This means that if, in the worst scenario for gaming operators, this approach would be followed by all the EU Member States, a gaming operator which intends to offer its games to all the European residents, shall not only apply for a gaming license in all the EU Member States, but shall also set up a country specific website open only to the people located in each EU Member State.
This means that Italian users will never be able to play with French user and the possibility for gaming operators to exploit economies of scale will be substantially limited.
This means that gaming operators which intend to launch their services in a new country shall start a new business from scratch without taking advantage of the market recognition obtained in other countries.
And what about the ubiquity of the Internet? Do public interest reasons really justify the limitations to the EU principle of freedom of services? And if so, why are Governments introducing more and more games?
The EU principle of freedom of services is based on the reciprocal trust among EU Member States on the compliance of the legal system of the other EU Member States with minimum standards. The laws governing the gaming sector have not been harmonized through EU Directives, but it seems that the attractive taxes paid by gaming operators are the main reasons behind the restrictive approach of EU Governments in such sector.
In the next future we will see how gaming operators will react to this decision of the ECJ, whether they will decide to comply with local gaming laws or they will decide to implement further solutions to circumvent local gaming laws.
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