Ladbrokes Belgium Licence Award Investigated by Europe
The European Commission is scrutinising the awarding of a Belgium licence to Ladbrokes. The EC is checking if state-aid rules were violated when the virtual licence was issued to the operator.
The decision to grant Ladbrooks a licence to operate virtual betting in Belgium in under investigation by the European Commission. The Commission will decide whether the country’s regulator broke the law by denying other operators access to the market.
The investigation into the granting of the licence was started when two competing operators complained that the Belgian Gaming Commission (BGC) effectively created a monopoly by granting Ladbrooks sole rights to operate the virtual vertical. They claim that in denying other operators access to the market; this was equivalent to “state aid” and illegal under European competition rules.
The allegations state that while Ladbrooks was granted permission to run virtual betting markets in their retail sector in February 2014 (this later expanded to online in March 2015), the Commission did not award licences to any other operator in that time. The Commission is accused of using the excuse of “ongoing consultations over an appropriate regulatory framework for the vertical.”
Despite this delay in finalising the regulatory structure, Ladbrooks’ licence was not rescinded whilst consultations took place, leaving the bookmaker as the only operator offering virtual betting. The situation was only resolved in 2018. The rules regarding the vertical were established in a royal decree published in May that year. The European Commission statement read:
At this stage, the Commission has concerns that the authorisation granted to Ladbrokes may have resulted in the betting company enjoying a de facto exclusive right to operate virtual betting in Belgium since 2014, without any remuneration in favour of the Belgian state by Ladbrokes in return.– Statement, European Commission
It continues: “The measure may have distorted competition, and the Commission has doubts that it complies with EU state aid rules. The Commission will now investigate further to determine whether its initial concerns are confirmed.”
Under European competition laws, it is illegal for one company to have preferential treatment, including financial help, that is not available to others. Countries are also prevented from engaging in practices that distort competition.
While the investigation is still at an early stage if Ladbrokes are found to have breached anti-competition laws the penalties could be very severe for the operator. Current regulations allow the Commission to start a “recovery case” which aims to re-balance the situation and remove any unfair advantage. This could mean repaying a percentage of all the revenue that the vertical provided between 2014 and 2018. Although this revenue total is unlikely to be high, it could be argued that even this year’s revenue should be included, as the operator is in a dominant position due to the delay in granting other operators access to the market.
There is a statute of limitations for this process that the Commission must adhere to, however as this is set at ten years, this is unlikely to help the operator. Ladbrokes state they are confident of a positive outcome from this probe, a GVC spokesperson, Ladbrook’s parent company said, “The Group has every confidence that its betting operations in Belgium are fully compliant with EU Law.”