UPDATE 1-EU executive targets Germany, Sweden over gaming
(Adds more detail, industry reaction)
By Huw Jones
BRUSSELS, Jan 31 (Reuters) - The European Commission opened legal actions against Germany and Sweden on Thursday as part of wider efforts to crack down on hurdles to competition from foreign online gaming firms.
EU Internal Market Commissioner Charlie McCreevy has asked Germany for information to assess whether a new treaty that came into force this month to ban online gambling was in line with the bloc's rules on the free movement of services.
Online gaming firms such as bwin (BWIN.VI) and Unibet (UNIB.DE) face restrictions when they seek customers in many EU states including Germany and Sweden even though gaming is not banned there.
"Germany has two months in which to respond. The Commission hopes that the answers it receives will lead to an early and satisfactory resolution of the matter," the Commission said in a statement. In particular, the EU executive is looking at the treaty's total prohibition of games of chance on the Internet, particularly sports betting, advertising restrictions on television, on the Internet or on jerseys or billboards, and the ban on financial institutions processing bet payments.
"However, it should be noted that in Germany horse race betting on the Internet is not prohibited and slot machines have been widely expanded. Moreover, advertising of games of chance by mail, in the press and on radio is still permitted," the Commission said.
HYPOCRITICAL
The Commission also opened legal action against Sweden to verify whether all national measures relating to poker games and tournaments are compatible with EU laws on the free movement of services.
Stockholm also has two months to respond.
Last week Sweden's largest daily newspaper, Aftonbladet, called on McCreevy to push ahead with legal action, saying it was facing threats from Sweden's gaming board and prosecutors for accepting advertisements from rival gaming operators.
McCreevy has legal actions against 10 of the EU's 27 member states, and refers to European Court of Justice rulings which say EU states can introduce restrictions only if they are necessary, proportionate and non-discriminatory.
McCreevy has criticised states as hypocritical for protecting money-spinning national monopolies that actively promote betting while banning rivals on the grounds that consumers needed protecting.
The new German treaty replaces existing legislation that was already the subject of legal action from Brussels.
"The new treaty introduces an even more restrictive regime by banning private online and 'bricks and mortar' sports betting operators and by imposing further discriminatory, disproportionate and inconsistent restrictions which leave the sports betting markets in the control of the German state lotteries," private gaming firm Stanleybet International said.
"The Swedish case concerns the introduction of online poker by the Swedish state-controlled gambling operator, Svenska Spel. This is certainly a discriminatory measure because Sweden maintains a very strict regime banning all other online operators," Stanleybet said.
The legal actions are part of a three-stage process that can end in the European Court of Justice, which has powers to fine EU states and force them to change their laws. (Editing by Dale Hudson)
