Supporters of European betting industry liberalisation were quick to hail the recent European Court of Justice ruling in the case of Placanica.

Firstly, the judgement in Placanica expressly states that a Member State may not apply a criminal penalty for failure to complete an administrative formality where, in breach of Community law, such completion is refused or rendered impossible by that Member State. So, where a country's gambling laws are inconsistent with European law, that country may not resort to criminal sanctions against private gambling operators who target that country.

Second, the judgement stated that where a country's gambling laws do not adhere to the strict guidelines now laid down in EU case law, it is not permitted to prohibit from its betting and gaming sector companies that are listed on Europe's stock markets. So, where a country continues to flaunt EU gambling law, through, for example, the blatant advertising of gambling services, that country is not entitled to exclude the llikes of BWIN, Ladbrokes, Power Leisure, William Hill and Sportingbet from operating in its market.

Placanica asserts that a country may not restrict the number of licences available in its market, unless it is itself genuinely engaged in bringing about a dimunition in gambling opportunities within its borders.

The judgement in Placanica did not represnet a radical departure from what had gone before, indeed, if anything, it merely served to crystalise principles of law previously laid down in the earlier judgements of Laara, Zenatti, Schindler, and Gambelli. Nonetheless, in so much as it does this, it serves to bolster the European Commission vis a vis its battles with the protectionist European monopolies.

Spain and Italy have already moved to open up their betting markets to outside competition. France is wavering, with recent positive comments from the Minister of the Interior Michèle Alliot-Marieand the Minister of finance Eric Woerth, suggesting a desire to liberalise.

In October 27 2007, Sweden's governing party, the Moderate Party voted at its annual conference in Gävle on Saturday to come out in favour of the liberalisation of the Swedish betting market; including the sale of Svenska Spel and ATG.

In January 2008 the European Commission sent an official request for information on national legislation restricting the supply and promotion of certain gambling services to Sweden and Germany.

In the case of Sweden, the Commission wishes to verify whether all national measures relating to poker games and tournaments are consistent and therefore compatible with Article 49 of the EC Treaty, which guarantees the free movement of services.

The Commission said that its decision does not touch upon the existence of monopolies as such, or on national lotteries. Nor does it have any implications for the liberalisation of the market for gambling services generally, or for the entitlement of Member States to seek to protect the general interest, so long as this is done in a manner consistent with EU law i.e. that any measures are necessary, proportionate and non-discriminatory.

The Commission said that a Member State cannot invoke the need to restrict its citizens’ access to betting services if at the same time it incites and encourages them to participate in state lotteries, games of chance or betting which benefits the state’s finances.

In March 2008 an order was issued by UC Malmö, a department of Sweden's Prosecution Authority, to the effect that there be no more prosecutions brought against the media for accepting ads from foreign betting companies.

In the case of Germany, the new inquiry focuses on a number of provisions of the new legislation which entered into force on 1.1.2008.

Some of the key restrictions that are questioned in terms of their compatibility with the EC Treaty's Internal Market provisions are as follows: the total prohibition of games of chance on the Internet; notably sports betting, on which the Commission sent to Germany in March 2007 a detailed opinion; advertising restrictions on TV, on the Internet or on jerseys or billboards; and the prohibition on financial institutions to process and execute payments relating to unauthorised games of chance.

In addition, questions are raised regarding the authorisation regime to be granted to intermediaries as well as the criminal sanctions or administrative fines provided for in cases of organisation, advertising and participation in on-line games of chance.

The Italian betting market has already been partially liberalised, but the incumbent operator Snai, which won the most licences at a recent licence auction, remains a possible take-over target for a company looking to establish a foothold in the country (albeit that the company is subject to litigation regarding tax payments).

Italy's Lottomatica SpA was awarded a total of 1,644 new betting licences, comprising 1,144 sports betting rights and 500 horse racing betting rights. The company also won an online betting licence. Lottomatica's business model will be based around franchisees. Intralot won 426 new betting licences, whilst Betfair and Unibet won remote betting licences.

When announcing results for the nine month period ended September 2007, Lottomatica said that sports betting wagers, with over 1,000 locations in operation, were approximately €26.7 million, for the months of August and September. Revenues from sports betting were approximately €5.2 million, equal to gross wagers net of prize payouts.

William Hill, in conjunction with Codere, has pencilled in plans to spend about €10m (£6.8m) in a number of regions in Spain, putting betting kiosks in bingo halls and adult gaming centres and possibly installing betting machines within bars.

The joint venture recently launched its Spanish brand - Victoria Apuestas and has developed the infrastructure needed to control the joint venture operations.

On November 1, 2007. Codere announced that a subsidiary of the joint venture had been awarded one of three licenses granted to offer sport betting in the Basque region of Spain. Garaipen Victoria Apustuak S.L is a company in which the Codere & William Hill joint venture has a 67% stake, and the remaining 33% is held by local Basque partners, including 27 local gaming operators. It said that this company plans to invest a total of approximately €31.6 million and to create 205 jobs in the Basque region.

The joint-venture has also submitted a licence application for the Madrid region and acquired leases on a number of premises there; it is expected that it may be granted the rights to open up 50 betting shops.

Opap is the Greek monopoly provider. Were there to be a chance that the Greek market were to be liberalised, one would expect to see shares in the company to come under pressure. This is not something that we have seen happen to date.

The French casino operator Groupe Partouche has already dipped its toes in the internet betting sphere, and got itself a hefty fine in response to its activities. As the French market moves towards liberalisation, Partouche will be a likely benefactor of any decision to allow casinos to enter the internet spehere; regardless of the areas in which it is actually allowed to compete. Signs that the French betting market is about to be partially liberalised, came about in January 2008 when Francaise Des Jeux (FDJ) said that it would soon be launching a number of online betting websites.

Fluxx and Betbull, are seen as likely benefactors were the German betting market to be liberalised, whilst Unibet, Betsson, Redbet and Modern Times Group would all be seen to benefit were the Scandic betting markets to be opened up to competition. Bwin with its broad Euro focus, is often ticked up at the mere mention of liberalistion anywhere across Europe. It is possible that an expansionist company such as SkyBet, may turn its attention to the likes of Bwin.

The Dermot Desmond owned betting exchange Betdaq, recently entered the Scandic betting arena, through the taking up of an option to buy a 25 per cent stake in the Stockholm listed Scandinavian-facing online poker company 24H Poker AB. Betdaq has entered into an online poker joint-venture with the compnay in a deal that grants it an option to acquire 125m B shares in the company after two years. 24H Poker AB is another company that would benefit were the Scandic betting markets to be opened up to competition.

Looking ahead, there is however, a strong case to be made, that any future liberalization of the European betting market, rather than providing the likes of Bwin and Unibet with further growth opportunities, will actually serve to usher in more competition, with the likes of Betfair, Ladbrokes Paddy power and William Hill entering their core markets.

In the case of France, incumbent operators such as Groupe Partouche, FDJ and Groupe Lucien Barriere, all of whom boast strong brand awareness and customer loyalty, are very well positioned to benefit from any future liberalisation of the betting market, at the expense of non-French operators.

William Hill PLC in association with its joint venture partner Codere SA (Codere) had been awarded 20 concessions in Italy to operate horseracing betting shops, 7 concessions to operate sports betting shops and 28 concessions relating to sports betting points. Remote licences relating to horseracing and sports betting were also applied for and granted.

William Hill had recently said that progress had been made in the first half of 2007 in identifying and acquiring locations to exploit these concessions and that trading in the remote business was planned to commence there before the end of the year, with retail commencing during the course of 2008. It was belived that William Hill and Codere had targeted capex of €40m to fund the joint venture’s expansion in Italy in the next 18-24 months.

However, in July 2008, William Hill PLC and Grupo Codere SA announced the sale of the entire issued share capital of William Hill Codere Italia Srl (WHCI) to INTRALOT Italia spa. The gross consideration agreed was €5.5m, which was shared equally between the two shareholders.

The sale allegedly followed a strategic review of WHCI within the Italian sports betting market. William Hill said that the number of retail betting licences won by WHCI was insufficient in scale to provide an attractive long term return. It said that options to grow within Italy through the acquisition of either existing or new licences were explored, but the cost of acquisitions within the existing regulatory framework in Italy made further investment unattractive. The sale of WHCI includes the internet betting licences secured in the 2006 tender. William Hill said that it is still considering its options with regard to an internet offering in Italy. This sale will result in a write off of around £1m in the Group's 2008 interim accounts after accounting for operating losses in 2007 and to the date of disposal in 2008.

When it comes to the liberalisation of the European betting markets, the message for non-incumbent operators may just be, be careful what you wish for. Matters such as cultural difference; the strength of incumbent operators etc ..should weigh heavily on the mind, before any decision is made regarding European expansion.