Swedish monopoly could be headed for court

It is beginning to look as if the Swedish government gambling monopoly Svenske Spel could find itself in court after rejecting the European Commission's claim that it was acting contrary to European Union law in excluding gambling services from other EU countries.

In justifying its exclusionary gambling practices, the Swedish government has claimed that its laws are proportionate, prevent crime and provide social protection to Swedish gamblers. Earlier this week Sverige Radio International revealed that gambling, and state profits from Svenske Spel is booming in the Scandinavian country.

Earlier this year the EC required that Sweden and other EU countries with similar bars to the free movement of trade and services between European Union members justify their exclusionary approach toward online gambling operators from other EU nations. The Internal Markets Commissioner, Charlie McCreevy quoted Article 49 of the European Treaty regarding the issue.

Assuming the EC finds the Swedish justification unacceptable, its next step could be an appearance in the European Court of Justice - an event that could take several years to judicially finalise.

Petter Nylander, chief executive of online gambling group Unibet, expressed his disappointment, saying: "It looks like the market will be opened up by the European Commission rather than the government and it doesn't make any political logic. However, from a financial point of view, the [Swedish] gambling monopoly is one of the biggest cash cows for the government and it doesn't want to change the current set up."

The Swedish move was described in an article carried by eGaming Review as a ploy to buy the Swedish government more time. Quoting an unidentified Swedish source, the publication reported: "There is friction within the government because it got to power by promising tax cuts on real estate and wealth.

"By holding onto Svenska Spel's monopoly for at least another two years, it keeps in place huge tax revenues which make up the shortfall from any cut in other taxes. The government knows the European Commission is a slow moving animal so really this is a cynical move to play for time."