[JURIST] The European Commission [official website] filed a lawsuit [press release] against Sweden on Thursday for failing to change its laws on online betting and poker games that breach EU law on the free movement of services. The EU referred Sweden to the Court of Justice (ECJ) [official website] in two separate cases related to its restriction of gambling license to domestic and state-owned operators only. “Changes to the Swedish gambling law in order to make it compliant with EU law have long been envisaged but never implemented,” the Commission said in a statement. The cases concern licensing for online betting and poker games. Sweden only grants license to domestic operators and state-owned entities, which, according to the Commission, is in direct contradiction of EU rules on the free movement of services. Under EU law member states are allowed to impose restrictions on some types of gambling activity to protect against addiction or to prevent crime if they can demonstrate that the measures are suitable and necessary. However, the Commission said that Sweden’s licensing system for online betting is not applied in a systematic way and that Swedish authorities did not adequately supervise the commercial activities of the exclusive service provider.

In 2010 the ECJ upheld [JURIST report] the Swedish law restricting internet gambling. The suit was brought by the publishers of two Swedish newspapers, Expressen and Aftonbladet, which both ran online gambling advertisements for several foreign agencies in 2004. The judgment comes at a time when the multi-billion euro industry is attempting to break the monopoly held by domestic “game of chance” agencies in many EU member states. In June 2010 the ECJ issued two judgments [JURIST report] against UK betting companies Ladbrokes International and Betfair, upholding Dutch restrictions on Internet gambling. The ECJ ruled in both cases that national regulations on games of chance are compatible with EU law when they are enacted to mitigate addiction and combat fraud. The US has also taken steps to tighten restrictions on Internet gambling. Official federal enforcement of the Unlawful Internet Gambling Enforcement Act (UIGEA) [HR 4411 materials] began in June 2010. The UIGEA, which bans banks and financial institutions from intentionally accepting payments from credit cards, checks or electronic fund transfers related to unlawful Internet bets was scheduled to take effect on December 1, 2009, but enforcement was delayed [JURIST report] in November until June 1. The delay allowed US banks and financial institutions six months to get in compliance with the new rules designed to curb Internet gambling. The act was signed into law [JURIST report] by then-president George W. Bush in October 2006 amid controversy over the effects of the bill on US bettors and foreign companies.