The supply of betting and gaming services continues to be subject to a complex, inconsistent and often protectionist approach by jurisdictions worldwide.

However, action to address this by international trade bodies (such as the World Trade Organisation and the European Commission) has resulted in the censuring of certain nations and, increasingly, the introduction of regulatory regimes for the activity.

The Sportingbet Group continues to provide its services only from jurisdictions where it is licensed and regulated, and that therefore, the supply of services from these jurisdictions (where its regulator and applicable local laws deem the gambling transaction to take place) is explicitly legal.

In order to provide its worldwide gambling service, the Group currently maintains licences in Alderney, Antigua and Barbuda, Australia, South Africa and the UK.

Major issues of note in the last 12 months* (all of which have been widely reported) include:

• the possibility that the UK will impose financial requirements on offshore operators who target the local gambling market;
• an ongoing move towards liberalisation of the gambling sector in a number of EU jurisdictions, including France, Denmark, Italy (through a wider regulatory regime) and Sweden;
• greater European Commission pressure on EU and EFTA Member States (principally Norway) to justify their national gambling regimes (including proposed new regulatory regimes) in light of the free trade requirements of international law; and
• increasing attempts to impose indirect taxes (via product fees) on gambling operators by certain States in Australia.

Legal issues in the European Union

EU Member States are subject to scrutiny from The European Commission (the “Commission”) and, as guardian of the EC Treaty, it closely monitors existing and developing legislation in the EU. The principal method by which the Commission has applied pressure on Member States is through the use of ‘infringement proceedings’ against EU Member States in contravention of EC law. Through such proceedings, the Commission has asked a number of States to amend their laws restricting the free movement of gambling services.

The ongoing pressure from the Commission, and in some cases national court decisions declaring domestic legislation to be incompatible with EC law, has led to a domestic review of prohibitive legislation in a number of jurisdictions, including France, Italy, Sweden and Denmark.

On 9 September 2009, the European Court of Justice (the “ECJ”) delivered its judgment in Case C-42/07 between Departamento de Jogos da Santa Casa da Misericordia de Lisboa (“Santa Casa”) and Bwin, and effectively upheld the Portuguese national law restricting certain betting and gaming activities to the State monopoly, Santa Casa. While the ECJ maintained the need for restrictions on gambling services to be justified in the public interest, the judgment is unambiguous in its vindication of State monopolies as an effective method for doing so.

* the last 12 months refer to the year ended 31 July 2009.  More recent regulatory details will be made available soon.