One of Britain’s biggest betting companies is taking the Dutch Government to court over its attempt to block Dutch banks from processing the payment of bets made over the internet.

Betfair, the betting exchange operator, which has been seeking a Dutch licence since 2004, described actions by the Ministry of Justice as “a desperate move” to protect the position of De Lotto, the Dutch state monopoly.

The ministry recently wrote to domestic banks claiming that, because Dutch laws did not allow for the licensing of internet gambling companies, it was “inappropriate for banks to provide facilities to the providers of illegal games of chance”. It urged the directors of the banks to terminate all relationships with internet gambling operators “within a reasonable timeframe”.

Betfair maintains that it is entitled to accept bets from the Netherlands because Dutch residents are allowed to bet online with De Lotto and because it is a licensed operator in the EU, with licences in the UK and Malta.

Mark Davies, managing director of Betfair, said that the ministry’s actions “fly in the face of the EU principles of open and fair competition”, serving to protect De Lotto and keep prices high.

“The Government’s objective of shutting out foreign operators while feather-bedding domestic monopolies and protecting a cosy cartel cannot be allowed to continue,” Mr Davies said.

The lawsuit by Betfair, which has also made a formal complaint to the European Commission, is the latest salvo in a battle over internet gambling in the EU. Ladbrokes has challenged several governments, including the Netherlands, and the Commission itself has issued proceedings against the Dutch Government.

Betfair said that the timing of the letters to the Dutch banks was “questionable” given that the European Court of Justice, to which cases involving Betfair and Ladbrokes have been referred, had yet to rule on the compatibility of the Dutch Betting and Gaming Act with EU law.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax