New sovereignity row brewing in France

The French courts could be the next battleground in the sovereignty struggle, where nations within the EU try to assert their authority to exclude companies from other EU nations who wish to carry on business within their borders.

French betting operator Pari Mutuel Urbain has threatened to take the UK's Sportingbet plc and Stanley International Betting, Austria's Bet and Win and Malta's Mr Bookmaker to court for breaking its monopoly by offering bets on French events over the Internet.

Since 1891, the PMU has held a monopoly, and in the thirties this was used in a bid by the government to protect the betting public by controlling the industry and preventing its takeover by Mafia interests.

"These bookmakers are breaking the law of 1891. What they are doing is illegal. We are launching legal proceedings against them," claims Francoise Toussaint, a spokeswoman for PMU. "The four companies have recently launched French internet sites on which they offer odds on a range of French sporting events, including horse races and football matches."

The four companies plan to defend themselves against legal action through an appeal to the European Union's Court of Justice, which in November 2003 forced Italy to drop similar proceedings against a British bookmaker. The European court ruled that as the Italian authorities were actively promoting betting via the state monopoly - and reaping large tax returns from the industry - they could not invoke the need to protect the public in order to prevent foreign competition.