Europe's top court ruled yesterday that countries can run state monopolies for online sports betting, citing a heightened risk of criminal activity.

"The prohibition imposed on operators... of offering games of chance via the Internet may be regarded as justified by the objective of combating fraud and crime," the Luxembourg-based European Court of Justice said in a statement.

The case was referred to the court after a sponsorship deal between Gibraltar-based Bwin and the Portuguese football federation breached national laws and resulted in fines of around €75,000 ($110,000) each.

While judges agreed that Portuguese law here ran counter to the European principle of freedom of services in the single EU market, they said that "may be justified by over-riding reasons relating to the public interest."

The court said betting carries a high risk of fraud and that online betting, given the lack of direct contact, carries an even higher risk of criminal activity.

It added that betting companies that sponsor sports competitions, along with some of the participants, "may be in a position to influence the outcome" of events "and thus increase its profits."

Portuguese punters wanting to place online bets legally on football or other lotteries are only allowed to do so via a state-controlled organisation, despite a proliferation of operators across the EU market.

As a result of Tuesday's judgment, bookmakers will remain frustrated at the failure to implement a single market for online betting across the 27 European countries.

Similarly, gamblers used to placing online bets on Champions League football or horse-racing in one EU member state but who move to another will continue to face restrictions on their normal providers. Greece, Germany and Norway also run state betting monopolies, while France, Spain and Sweden are currently working on reforms, according to analyst and lobby group Gambling Compliance.