(Adds court comments in fourth paragraph.)
Jan. 24 (Bloomberg) -- Greece’s gambling monopoly owned by Opap SA was ruled illegal by the European Union’s highest court, sending shares of the company down as much as 21 percent.
EU law prohibits national rules that grant exclusive rights without serving the public interest by reducing the number of betting opportunities, the EU Court of Justice in Luxembourg ruled today. The case was filed by Opap competitors Stanleybet International Ltd., William Hill Plc and Sportingbet Plc.
The EU’s top court has examined a series of cases brought by betting companies including Bwin.Party Digital Entertainment Plc, Ladbrokes Plc and Betfair Ltd. over whether state monopolies may block them from operating freely across the 27- nation bloc. Online companies have also called on the EU to take action against what they say are unjustified national restrictions on cross-border Internet gambling.
The EU court said that Greece could preserve the monopoly by subjecting it to stricter controls to ensure consumer protection. If it fails to do that, the country would have to open it up to competition from other companies in the EU.
Opap shares fell 11 percent to 6.27 euros at 11:37 a.m. in Athens, for the biggest drop on the Stoxx Europe 600 Index. Opap Chairman Constantine Louropoulos wasn’t immediately available to comment on the ruling.
The Athens Stock Exchange fell 1.2 percent to 1,007.13 at 11:23 a.m. in Athens, snapping six days of gains. The bourse earlier dropped as much as 2.5 percent. Opap carries a 5.8 percent weighting on the index, according to Bloomberg data.
Shares of the other gaming companies rose after the ruling. Ladbrokes rose as much as 4 percent while William Hill jumped as much as 2.4 percent in London.
An adviser to the EU court in a non-binding opinion in the case in September said the national court can’t conclude the legislation is trying to restrict the availability of gambling in the country if Opap, in which the government is a minority shareholder, pursues an expansionist policy.
The Greek tribunal handling the appeals sought guidance from the EU court in 2011. EU Internal Market Commissioner Michel Barnier said last year he is working on an action plan to rein in illegal and “unregulated” online gambling.
The EU court has said in some previous cases that gambling monopolies may be justified if they reduce betting addiction or reduce criminal activities in a proportional manner.
Stanleybet, Sportingbet and William Hill -- all U.K.-based companies -- applied separately for Greek licenses to offer gambling in stores and online. Their applications, filed in 2004, 2006 and 2007, were rejected based on national law, which the companies argued violated EU rules guaranteeing freedom to provide services and set up business anywhere in the bloc.
The cases are: C-186/11, Stanleybet International Ltd, William Hill Organisation Ltd. and William Hill Plc v. Ipourgos Ikonomias kai Ikonomikon and Ipourgos Politismou; C-209/11, Sportingbet plc v. Ipourgos Politismou and Ipourgos Ikonomias kai Ikonomikon.
--Editor: Anthony Aarons