UPDATE 1-Portugal gaming law may meet EU rules-court adviser

(Adds more detail, background)

By Michele Sinner

LUXEMBOURG, Oct 14 (Reuters) - Portugal's Santa Casa betting monopoly may comply with European Union rules on the free movement of services if certain conditions are met, an adviser to the bloc's top court said on Tuesday.

The advocate general's mixed opinion adds fuel to a bitter battle over the opening up of gaming markets in the EU.

Many states balk at attempts by Brussels to let foreign firms compete on an equal footing with local monopolies that bring large sums of money into national treasuries.

Santa Casa had won two domestic court cases against the Portuguese football league Liga and Baw, a Gibraltar-based company that operates online gaming company betandwin.com (BWIN.VI).

Baw was fined 74,500 euros ($101,500) and the Liga fined 75,000 euros after Santa Casa argued that betandwin.com's sponsorship of the Liga infringed its monopoly status.

"According to the Advocate General Yves Bot, Portuguese legislation conferring on Santa Casa a monopoly for mutual betting on the Internet may comply with community law if certain conditions are met," a European Court of Justice statement said.

The law must be notified to the European Commission for approval, however.

"Failing this, the legislation would not be applicable as against Bwin and the Liga," the statement said.

It would be up to a national court to determine whether the law had been notified to Brussels. "Similarly, it will also have to draw the appropriate conclusions with regard to the fines imposed on the Liga and Bwin," the court statement said.

Bot said the Portuguese law as written "constitutes a restriction on the freedom to provide services" by barring foreign gaming firms.

But such a restriction was justified if it met an overriding reason relating to the public interest, was proportionate and not applied in a discriminatory way, the court statement said.

It would be up to the local court to decide whether the Portuguese law passed these tests.

The opinion of the adviser is not binding on the European court.

The European Commission has launched legal actions against a majority of member states over gaming restrictions but is making little progress.

EU Internal Market Commissioner Charlie McCreevy, who oversees the gaming sector, said last month he was facing opposition inside the EU executive and from key member states to pushing ahead with the legal actions. (Writing by Huw Jones, editing by Dale Hudson)