Belgian National Lottery product “Scooore!” unfairly capitalised on lottery monopoly. After its Belgian success British bookmaker Stanleybet is set to challenge the renewal of Italian Lotto concession to the GTech Lottomatica giant.
By its decision of 22 September 2015, the Belgian Competition Authority (BCA) inflicted on the National Lottery (NL) a fine of approximately € 1.2 million for anti-competitive practices in the betting sector since 2013.
The NL enjoys a legal monopoly of lottery and number games in Belgium. With the introduction of a licensing system in the betting sector in 2012, the NL decided to enter that segment also, in order to exploit its strength as the monopolist of a neighbouring market. In that perspective, the NL obtained in the first place an extraordinary betting licence (known as the “35th licence”), over and above the ceiling of 34 licences that the Belgian Legislators themselves had set for the entire country in order to contain and streamline gambling opportunities. The 35th licence was later annulled by the Belgian Council of State as a result of an action by the Liverpool bookmaker Stanleybet, who operate in Belgium via a regular licence. However, the NL was subsequently re-assigned a betting licence from the original 34, thus nominally staying within the national ceiling. However, in reality, the NL never ceased to operate.
To mark its entry into the betting segment, the NL launched in 2013 a much advertised new product called “Scooore!”. It did so unfairly capitalising on its unique position as the dominant player of the long established, monopolised neighbouring segment of lotteries and number games.
This led Stanleybet to file a complaint with the BCA, pointing to a number of anti-competitive conducts put in place by the NL upon its entry into the betting market. These included: the use of retailer and consumer data and profiles previously acquired in the monopolised segment; utilising the then “35th license” reserved to it; utilising its country-wide established brand and image in the new sector; cross-subsidising the non-monopolised betting sector with resources drawn from the monopolised lotteries and number games sector; and imposing exclusivity and non-competition clauses in its template contracts with the retailers that would commercialise the new “Scooore!” bet with exclusionary purposes or effects. Other Belgian betting companies followed Stanleybet’s action with another complaint.
As a result of a protracted investigation, including dawn raids carried out at the NL’s premises, the BCA decided to pursue, as a matter of enforcement priority, the first conduct complained of by Stanleybet, that is, the utilisation in the non-monopolised betting segment of retailers and customers data and profiles acquired in the monopolised lotteries and number games segment. The NL admitted the charge and settled the case with the BCA in order to benefit from a discount on the sanction. The remainder of Stanleybet’s complaint remains unprejudiced and unadjudged. The findings of the BCA could result in follow-on private enforcement actions by Stanleybet, other betting competitors in Belgium and ultimately, Belgian consumers and consumer associations.
Said John Whittaker, Stanleybet’s CEO: “We are extremely pleased that our initiative – which, according to our established philosophy, was conceived strictly resting on the tools provided by law – resulted in the public finding that the Belgian National Lottery, the powerful gambling monopolist, unjustly abused its dominance in the neighbouring supposedly open betting market. By our experience in a number of other jurisdictions, we are sadly aware of the arrogance of national monopolists, who take it for granted that they should be allowed to do as they please, regardless of competitors’ rights and interests. We must praise the independence of the Belgian authorities for having, at least in part, remedied a blatantly abusive practice. Stanleybet are carefully considering initiating a civil suit to claim the damages suffered as a result of the launch of the “Scooore!” bet in 2013 by the National Lottery, profiting from means certainly not conquered by competition on the merits”.
Whittaker added: “The Belgian case shows that our increasing focus placed on the competition features of national gambling markets commences to be rewarded. In many jurisdictions, there is a hard-core anticompetitive heritage, that is successful in surviving the nominal end of gambling monopolies. This is also the case of Italy, one of our historical legal battlegrounds, where we see the Lotto concession in the process of being re-awarded after nearly twenty years to the same concessionaire, GTech Lottomatica, by a tailor-made public tender that only the incumbent will be able to fulfil. GTech Lottomatica is the undisputed dominant player of the gambling market in Italy and, if it is again awarded the Lotto concession, it will continue to impose itself at the expense of all other stakeholders, competitors and consumers alike. We are already at work on how to oppose that unacceptable outcome at all levels”.