Betfair, the online betting specialist, has launched a multimillion-euro legal action against the Dutch government over its attempt to ban banks in the country from processing payments made by Dutch customers on online gaming websites based in the UK.
Betfair, which is headquartered in London, has also made a formal complaint to the European Commission and accused the Dutch government of unlawfully protecting the "gaming monopoly" of operators in the Netherlands, where there is a ban on online gaming.
The complaint and lawsuit, filed at a civil court in the Hague on Wednesday, concern a letter that the Dutch government sent in February to the country's banks urging them to stop processing payments from Dutch customers on gaming websites of foreign operators. Betfair wants the letter withdrawn.
Mark Davies, the managing director at Betfair, called the letter a "desperate move". He added: "This serves only to protect the Dutch government's own gaming monopoly and keep prices high."
Betfair alleges that the government's actions break European Union rules on the free movement of services and capital within the region. The betting firm is worried that other countries, including Norway, Denmark, Finland and Sweden, may follow the actions of the Dutch government and deal a hammer blow to the European betting industry. It is understood that most, if not all, of the Dutch banks have responded to the letter by banning payments from UK operators.
Betfair wants to obtain a judgment which states that the Dutch Ministry of Justice's call for financial institutions to boycott its website and the underlying policy is illegal. It will then proceed with a claim for damages for lost income that could run into millions of euros.
The market in the Netherlands is in effect dominated by De Lotto, a state-owned lottery operator, and a US-based gambling company, Scientific Games.
Mr Davies said: "The government's objective of shutting out foreign operators while feather-bedding domestic monopolies, one big US multinational, and protecting a cosy cartel cannot be allowed to continue. We will fight this."
Ladbrokes is also involved in a long-running legal dispute with the Dutch government, which relates to an injunction taken out in 2002 that prevents the bookmaker from accepting sports bets from Dutch citizens on Ladbrokes.com. A Ladbrokes spokesman said: "We believe that Dutch law is in contravention of EU law and we are very much of the same view as Betfair."