Italians Attempted Blockading Gambling Regulator's Website

This week, amid reports of negotiations with the Maltese regulator Lotteries and Gaming Authority (LGA), and opinions on the legitimacy of this one-sided decree in terms of European Union policies, the Italian online gambling barrier seemed to enter a new stage. 

News articles in the Maltese press suggest that after three weeks following the launching of its obstruction of online gambling sites by means of Italian ISPs, the Italian regulatory body still hasn't sat around the table with the Maltese, and discussed the issue, they being the ones who are disturbed by the fact that up to 80 of the LGA regulated sites are subject to the obstruction.

The LGA's website now serves as the sole form of access for Italian online players to link up to the blocked Maltese gaming sites, and last week it was also blocked by Italian ISPs. Presumably following protests to the Italian authorities, the matter was quickly reversed, within hours.

Mario Galea, the LGA CEO, reported that he hoped the Italians would stand by their word to begin discussions, saying that the Italians already comprehend that they have no problems with LGA and therefore are ready to meet with them. He warned that I f they chose not to, the company would have to take diplomatic steps, manage that the issue would then be dealt with at government level.

As a result of part of a law enacted following its 2006 budget to block 684 online gaming sites not licensed in Italy on the grounds it was protecting Italian gamers from “phishing” – Italy blocked the fraudulent acquisition of passwords and credit card details Over 80 sites that are licensed in Malta.

The Italian regulatory board, AAMS, has threatened Italian ISPs with a daily fine of Euro 180 000 each time they allow someone to bet with a “blacklisted” company if they do not block the websites.

As feelings begin to run high, the Malta Remote Gaming Council has announced that there is actually no reason for Maltese gambling websites to be included in the blockade. The only reason they can come up with is that it acts to protect the Italian government’s monopoly of betting operations in Italy. It is reported that last year alone, the Italian state generated Euro 1.8 billion in revenues, along with a small number of state-authorized private partners.

To be sent in the name of all MRGC members, the Malta Remote Gaming Council (MRGC) has now instructed its members to bring a formal complaint to the European Commission against Italy and the AAMS.

While pressure on the Italians continues to mount, as several major British online betting companies are pressuring the European Commission to stop the blockading of offshore internet gambling businesses, something is going to give. The case is currently being reviewed by the Director General (Competition.) Under the aegis of the UK's Remote Gambling Association, some UK gambling companies, have already sought legal advice.

Meanwhile, the LGA has not been dragging its feet. A publicity campaign on the Italian media and on online gambling forums is being card out by the regulators to encourage players to visit its website as a means of gaining access to Maltese gambling sites.

In contravention of the ruling in the Gambelli case, where 3 years ago Italian agents acting for the UK's Stanley International Betting Limited were prosecuted for contravening Italian law which forbade non-Italian concerns from accepting Italian bets, critics are saying that SItaly has blocked cross-gambling services.

EU member states could not block cross-gambling services, other than on grounds of moral objections according to the Gambelli precedent.

There are several other so-called "sovereignty" cases that are currently in dispute, with regard to European Union regulators who are preparing to issue legal challenges to Spain, France, and other governments for in industries from energy to gambling, hindering takeovers or competition. There are a number of legal cases pending against EU national governments.

To back up the EU's market-opening laws, the commission in effect has no genuine enforcement agency. In the face of this it is limited by having instead to bring countries to the Luxembourg-based European Court of Justice. This court is empowered to order governments to make their laws fall into compliance. The sanction, rarely used, of a second lawsuit to seek monetary penalties can be brought against governments that ignore those decisions.

To get from warning to actual judgment, this process can sometimes takes years.

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