Online gambling companies could be banned from individual European Union (EU) member states in a bid to combat fraud, according to a European Court of Justice (ECJ) ruling.

The decision follows legal action brought by Austria-based operator bwin and the Portuguese football league against Portugal's state gambling monopoly - Santa Casa da Misericórdia - over claims that the monopoly restricted trade. However, the ECJ ruled that national governments and state lotteries can seek to prohibit online foreign operators - even those based in EU states - if it is a move taken in the public interest to tackle fraud.

According to European Lotteries (EL), the organisation which represents state lotteries across the continent, the ECJ's decision will also put an end to "online gaming hubs", such as those in Gibraltar, Malta and the Channel Islands. EL president Friedrich Stickler said: "The ruling by the highest European court explicitly states that governments can prohibit commercial online gambling operators, such as bwin, from offering games of chance via the internet to their citizens."

bwin's co-chief executive officer, Manfred Bodner, said: "Online gaming has become a market reality. There is urgent need to develop a legal framework in tune with the times to warrant the interest of consumers, the state and operators. Court rulings will not be able to fill in for a regulation in the medium and long run."