European Commission investigates Ladbrokes licence award in Belgium

The European Commission (EC) is investigating a virtual betting licence awarded to Ladbrokes in Belgium over claims the agreement violated state-aid rules. The investigation follows complaints from two competing gambling operators that suggest the Belgian Gaming Commission (BGC) granted “incompatible” state aid to Ladbrokes by granting it effectively exclusive rights to operate virtual betting in the country. Ladbrokes received authorisation to operate virtual betting in a retail setting in February 2014, later expanding that authorisation to include online virtual betting from March 2015. At the same time, the BGC allegedly denied other operators rights to offer virtual betting several times between 2015-2016, citing ongoing consultations over an appropriate regulatory framework for the vertical. However, despite these discussions taking place, the BGC did not rescind Ladbrokes’ authorisation during this period. The rules governing virtual betting in Belgium were only confirmed in a royal decree published in May 2018. “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,” said the EC in a statement. “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 EU rules, it is illegal for member states to give financial help to some companies and not others in a way which distorts fair competition. If the EC finds that rules have been violated, it has the option to start a ‘recovery case’ which aims to remove the undue advantage granted to a company (or companies) and to restore the market to its state before the aforementioned aid was granted. There is a limitation period of 10 years for recovery. A spokesperson for Ladbrokes parent company GVC said “The Group has every confidence that its betting operations in Belgium are fully compliant with EU Law.”