EU court rules against Italy in Internet gambling case

The European Court of Justice ruled today that Italy could not bar gambling companies from other European Union nations from doing business with Italian citizens.

The ruling could force state-run monopolies in Germany and France to open up to competition.

Italy had prosecuted three executives from Stanley Leisure under its criminal code for accepting bets without receiving authorization from Italian authorities. The three operated shops in Italy that allowed people to place bets with Stanley's home office in Liverpool, U.K.

But the EU court ruled that Italy's restrictions – which had been rescinded before the case was heard – violated the EU's principles of freedom of establishment and the freedom to provide services.

In the explanation behind its ruling the EU court did state that "moral, religious or cultural factors, as well as the morally and financially harmful consequences for the individual and for society associated with betting and gaming, may justify such restrictions (on gambling)."

But if an EU country is going to restrict gambling competition on those grounds, they had better be prepared to make a solid case. "Those restrictions must nevertheless satisfy the conditions concerning their proportionality," the court said. Italy had cited preventing criminal and fraudulent behavior as in the intent of the original law.