EC Clears Ladbrokes in Belgian Virtual Betting State Aid Case

In a significant development for the European gambling industry, the European Commission (EC) has concluded its investigation into Ladbrokes’ operations in Belgium, determining that the company did not receive unlawful state aid.​

This decision stems from a 2019 complaint by competitors Rocoluc NV and European Amusement Company NV, who alleged that Ladbrokes benefited from exclusive rights to offer virtual betting in Belgium without appropriate compensation, potentially violating EU competition rules.​

The EC’s thorough investigation, initiated in September 2020 under Article 108(2) of the Treaty on the Functioning of the European Union (TFEU), examined whether informal approvals from Belgium’s Gaming Commission constituted state aid. The Commission’s final assessment found no evidence of a formal, legally binding act granting exclusive rights or state resources to Ladbrokes.​

This ruling not only absolves Ladbrokes of any wrongdoing but also sets a precedent for how informal regulatory communications are interpreted under EU state aid laws. It underscores the importance of transparent and non-discriminatory practices in the gaming industry.

EC Clears Ladbrokes in Belgian Virtual Betting State Aid Dispute

Key Points:

• The EC determined that Ladbrokes did not receive any state aid from Belgium concerning its virtual betting operations.
• The Commission found that email communications from the Belgian Gaming Commission lacked the legal effect necessary to constitute a grant of exclusive rights.​
• There was no evidence that Belgium transferred or forewent state resources in a manner that conferred a selective economic advantage to Ladbrokes.

Comprehensive Analysis:

The European Commission‘s decision brings clarity to a complex case involving allegations of unfair competitive advantage in the Belgian virtual betting market. The investigation focused on whether Ladbrokes’ ability to offer virtual betting services, based on informal approvals from the Belgian Gaming Commission, amounted to unlawful state aid.​

Virtual betting, a relatively new form of gambling involving fictional sports events determined by random number generators, was not explicitly regulated in Belgium during the period in question. Between 2012 and 2015, the Belgian Gaming Commission issued framework notes suggesting that virtual betting fell under Class IV gaming establishments, which included betting shops like those operated by Ladbrokes.​

In 2014 and 2015, Ladbrokes received affirmative responses via email from the Gaming Commission regarding its inquiries about offering virtual betting services. However, from 2015 onward, the Commission began denying similar requests from other operators and initiated a review of the regulatory framework, leading to a suspension of relevant notes and Ladbrokes’ authorization in July 2017.​

Despite this suspension, Ladbrokes continued offering virtual betting until broader regulation was enacted in May 2018, allowing all Class IV operators to offer such services. The complainants argued that this sequence of events resulted in a de facto exclusive right for Ladbrokes, constituting a selective advantage from state resources.​

The EC’s final assessment concluded that the informal email communications did not constitute a formal or legally binding act granting exclusive rights or state aid. Furthermore, it found that no state resources had been transferred or foregone as a result of the Gaming Commission’s actions.​

This decision underscores the importance of formal procedures and legal clarity in regulatory approvals within the EU. It also highlights the challenges regulators face in adapting to emerging forms of gambling and ensuring fair competition in rapidly evolving markets.​

The European Commission’s ruling in favor of Ladbrokes marks a significant moment in the intersection of gambling regulation and EU competition law. By determining that informal approvals did not equate to unlawful state aid, the EC has set a precedent for how similar cases may be evaluated in the future. This decision reinforces the necessity for transparent and legally binding regulatory processes to maintain fair competition and uphold the integrity of the internal market.