Europe’s highest court, the European Court of Justice has lifted a barrier used by Italy to keep out foreign gambling competitors. Italy has State-run gambling companies and the decision will be seen as a threat to its monopolies.

The European Court of Justice in Luxembourg ruled that Italy can't use criminal law to stop gaming companies licenced in other EU nations such as the UK from taking bets in the country.

State monopolies in France, Germany and other countries have been criticized by companies such as Ladbrokes Plc for blocking their cross-border online gaming business.

'This is a step further toward a liberalization of the European gambling markets,' said Lode Van Den Hende, a lawyer in the Brussels office of Herbert Smith. 'Overall this is very good now for the gaming operators. If this had gone against them they could have closed shop.'

Massimiliano Placanica and two other people who operated shops in Italy where people could place online bets with UK firm Stanley's office in Liverpool, England, faced criminal charges under Italian law because Stanley didn't have a local gaming licence.

The court prohibited the use of criminal law in particular in cases where foreign betting companies were refused the required licence by the country, as was the case for Stanley.

'The Italian criminal penalties for the collecting of bets by intermediaries acting on behalf of foreign companies are contrary to EU rules' an 11-judge panel of the court said.

Stanley said the ruling was a 'landmark' that will put pressure on governments and the European Commission, the EU's executive arm in Brussels, to end national protectionism.

Shares in some of the biggest UK gambling firms rose following the news.