Home » OCW News » March 2010 » European Online Gambling Industry Suffers Setback

European Online Gambling Industry Suffers Setback

Date published: 11 March 2010

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Despite years of effort by the European Commission (EC) to ensure that EU member states adhere to a single set of rules and regulations where online gambling is concerned, Paolo Mengozzi, a senior advocate of the European Court of Justice, has dropped a bombshell that could scupper those efforts.

According to reports, Mengozzi, whose opinion is highly respected by the EU court, recently announced that it is his opinion that European countries should not be obliged to allow foreign online gambling companies to operate in their territories simply because they have been issued with licenses in other EU states.

Mengozzi dropped the bombshell, which could have serious consequences to online gambling firms seeking to be allowed to offer their services throughout Europe, after carefully examining seven cases surrounding the compatibility of German online gambling issues in connection with EU online gambling legislation.

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The advocate general even went so far as to accuse the online gambling-friendly jurisdictions of Malta and Gibraltar of having 'distorted' the mutual trust between EU member states in relation to online gambling laws. Currently many of the world's leading online gambling firms are licensed by these two jurisdictions.

While Mengozzi does not have the power to change laws, his opinion does hold enough clout to sway the European Court. In addition, it is a well-known fact that rarely has the Court gone against a senior advocate. The worst case scenario is a Court ruling that every EU state may pass its own online gambling laws.

And if this were to happen, the majority of countries in Europe would likely opt to keep offshore online gambling firms out while encouraging the growth of locally owned and operated firms. Being legalized and regulated, this would keep all online gambling revenues, and therefore taxes, in the respective countries.