# C_2017112EN.01001601.xml

| 10.4.2017 | EN | Official Journal of the European Union | C 112/16 |
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10.4.2017

EN

Official Journal of the European Union

C 112/16

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Request for a preliminary ruling from the Fővárosi Közigazgatási és Munkaügyi Bíróság (Hungary) lodged on 3 January 2017 — Sporting Odds Limited v Nemzeti Adó- és Vámhivatal Központi Irányítása

(Case C-3/17)

(2017/C 112/25)

Language of the case: Hungarian

Referring court

Referring court

Fővárosi Közigazgatási és Munkaügyi Bíróság

Parties to the main proceedings

Parties to the main proceedings

Applicant: Sporting Odds Limited

Applicant:

Defendant: Nemzeti Adó- és Vámhivatal Központi Irányítása

Defendant:

Questions referred

Questions referred

| 1. | Must Article 56 of the Treaty on the Functioning of the European Union (‘TFEU’), the prohibition of discrimination and the requirement that the restriction of gambling activities by the Member States be carried out consistently and systematically — a legal objective which the Member State justifies essentially by reference to the fight against compulsive gambling and the protection of consumers — be interpreted as meaning that the national State monopoly over online and offline sports betting and betting on horse-racing is contrary to those rules if, in addition, in the Member State, since the reorganisation of the market carried out by the latter, private service providers with physical casinos operated under a concession may organise — both online and offline — other games of chance (casino games, card games, slot machines, online casino games, online card games) which entail a considerable risk of addiction? |
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1.

Must Article 56 of the Treaty on the Functioning of the European Union (‘TFEU’), the prohibition of discrimination and the requirement that the restriction of gambling activities by the Member States be carried out consistently and systematically — a legal objective which the Member State justifies essentially by reference to the fight against compulsive gambling and the protection of consumers — be interpreted as meaning that the national State monopoly over online and offline sports betting and betting on horse-racing is contrary to those rules if, in addition, in the Member State, since the reorganisation of the market carried out by the latter, private service providers with physical casinos operated under a concession may organise — both online and offline — other games of chance (casino games, card games, slot machines, online casino games, online card games) which entail a considerable risk of addiction?

| 2. | Must Article 56 TFEU, the prohibition of discrimination and the requirement that the restriction of gambling activities by the Member States be carried out consistently and systematically be interpreted as meaning that that article is infringed and that requirement is not fulfilled if it is determined that the reorganisation of the market, on the grounds of combating compulsive gambling and pursuing the statutory objective of protecting consumers, has, since the market reorganisation carried out by the Member State, effectively had as its consequence, or given rise to, a continuous increase in the number of casinos, the annual tax on the casinos’ games of chance, the national budget forecast of revenue from casino concession fees, the amount of gambling chips bought by players and the amount of money needed to be entitled to play slot machines? |
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2.

Must Article 56 TFEU, the prohibition of discrimination and the requirement that the restriction of gambling activities by the Member States be carried out consistently and systematically be interpreted as meaning that that article is infringed and that requirement is not fulfilled if it is determined that the reorganisation of the market, on the grounds of combating compulsive gambling and pursuing the statutory objective of protecting consumers, has, since the market reorganisation carried out by the Member State, effectively had as its consequence, or given rise to, a continuous increase in the number of casinos, the annual tax on the casinos’ games of chance, the national budget forecast of revenue from casino concession fees, the amount of gambling chips bought by players and the amount of money needed to be entitled to play slot machines?

| 3. | Must Article 56 TFEU, the prohibition of discrimination and the requirement that the restriction of gambling activities by the Member States be carried out consistently and systematically be interpreted as meaning that that article is infringed and that requirement is not fulfilled if it is determined that the establishment of a national State monopoly and the authorised organisation of games of chance by private service providers, essentially on the grounds of combating compulsive gambling and pursuing the statutory objective of protecting consumers, have, in addition, the economic policy objective of obtaining increased net revenue from gambling and generating an exceptionally high level of revenue from the casinos market in the least amount of time possible, with the aim of financing other budgetary expenses and State public services? |
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3.

Must Article 56 TFEU, the prohibition of discrimination and the requirement that the restriction of gambling activities by the Member States be carried out consistently and systematically be interpreted as meaning that that article is infringed and that requirement is not fulfilled if it is determined that the establishment of a national State monopoly and the authorised organisation of games of chance by private service providers, essentially on the grounds of combating compulsive gambling and pursuing the statutory objective of protecting consumers, have, in addition, the economic policy objective of obtaining increased net revenue from gambling and generating an exceptionally high level of revenue from the casinos market in the least amount of time possible, with the aim of financing other budgetary expenses and State public services?

| 4. | Must Article 56 TFEU, the prohibition of discrimination and the requirement that the restriction of gambling activities by the Member States be carried out consistently and systematically be interpreted as meaning that that article is infringed and that requirement is not fulfilled, and that there is an unjustified discrimination between the service providers, if it is determined that the Member State, invoking the same public policy ground, reserves certain online gambling services for the national State monopoly whilst it allows access to other gambling services by granting an increasing number of concessions? |
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4.

Must Article 56 TFEU, the prohibition of discrimination and the requirement that the restriction of gambling activities by the Member States be carried out consistently and systematically be interpreted as meaning that that article is infringed and that requirement is not fulfilled, and that there is an unjustified discrimination between the service providers, if it is determined that the Member State, invoking the same public policy ground, reserves certain online gambling services for the national State monopoly whilst it allows access to other gambling services by granting an increasing number of concessions?

| 5. | Must Article 56 TFEU and the prohibition of discrimination be interpreted as precluding a situation in which only service providers with physical casinos (and a concession) in Hungary may obtain a licence to offer online casino games, since service providers which do not have a physical casino in Hungary (including service providers with a physical casino in another Member State) cannot access the licence to offer online casino games? |
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5.

Must Article 56 TFEU and the prohibition of discrimination be interpreted as precluding a situation in which only service providers with physical casinos (and a concession) in Hungary may obtain a licence to offer online casino games, since service providers which do not have a physical casino in Hungary (including service providers with a physical casino in another Member State) cannot access the licence to offer online casino games?

| 6. | Must Article 56 TFEU and the prohibition of discrimination be interpreted as precluding a situation in which the Member State — through the possible initiation of a tender procedure in order to award concessions for physical casinos and through the possibility, for those with the status of trustworthy operators of games of chance, of submitting an offer [to contract] in order to obtain a concession in respect of a physical casino — provides the theoretical possibility that any service provider that fulfils the legal requirements, including a service provider established in another Member State, may obtain a concession to operate a physical casino and, once in possession of that concession, a licence to operate an online casino, but, in reality, the Member State in question does not initiate any public and transparent tender procedure to award concessions, and the service provider does not, in practice, have the possibility of submitting an offer [to contract], and, nevertheless, the authorities of the Member State declare that the service provider acted illegally by providing the service without a licence and impose an administrative penalty on it? |
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6.

Must Article 56 TFEU and the prohibition of discrimination be interpreted as precluding a situation in which the Member State — through the possible initiation of a tender procedure in order to award concessions for physical casinos and through the possibility, for those with the status of trustworthy operators of games of chance, of submitting an offer [to contract] in order to obtain a concession in respect of a physical casino — provides the theoretical possibility that any service provider that fulfils the legal requirements, including a service provider established in another Member State, may obtain a concession to operate a physical casino and, once in possession of that concession, a licence to operate an online casino, but, in reality, the Member State in question does not initiate any public and transparent tender procedure to award concessions, and the service provider does not, in practice, have the possibility of submitting an offer [to contract], and, nevertheless, the authorities of the Member State declare that the service provider acted illegally by providing the service without a licence and impose an administrative penalty on it?

| 7. | Must Article 56 TFEU, the prohibition of discrimination and the requirement that the authorisation procedure be transparent, objective and public be interpreted as meaning that the Member State is precluded from establishing a system of awarding concessions in respect of certain gambling services while, at the same time, the body that decides on concessions may also, rather than initiating a tender procedure to award the concessions, conclude concession contracts with certain persons considered to be trustworthy operators of games of chance, instead of giving all the service providers the possibility of participating in the tender procedure under the same conditions, by initiating a single tender procedure? |
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7.

Must Article 56 TFEU, the prohibition of discrimination and the requirement that the authorisation procedure be transparent, objective and public be interpreted as meaning that the Member State is precluded from establishing a system of awarding concessions in respect of certain gambling services while, at the same time, the body that decides on concessions may also, rather than initiating a tender procedure to award the concessions, conclude concession contracts with certain persons considered to be trustworthy operators of games of chance, instead of giving all the service providers the possibility of participating in the tender procedure under the same conditions, by initiating a single tender procedure?

| 8. | In the event that the answer to the seventh question is in the negative, and a Member State may validly establish a plurality of procedures for the award of the same concession: must the Member State ensure, under Article 56 TFEU, the equivalence of those procedures, in the interests of the effectiveness of EU law on fundamental freedoms, taking into account the requirement that the authorisation procedure be transparent, objective and public and the requirement of equal treatment? |
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8.

In the event that the answer to the seventh question is in the negative, and a Member State may validly establish a plurality of procedures for the award of the same concession: must the Member State ensure, under Article 56 TFEU, the equivalence of those procedures, in the interests of the effectiveness of EU law on fundamental freedoms, taking into account the requirement that the authorisation procedure be transparent, objective and public and the requirement of equal treatment?

| 9. | Are the answers to the sixth to eighth questions affected by the fact that in neither case is judicial review or any other effective remedy against the decision awarding the concession available? |
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9.

Are the answers to the sixth to eighth questions affected by the fact that in neither case is judicial review or any other effective remedy against the decision awarding the concession available?

| 10. | Must Article 56 TFEU, the sincere cooperation clause in Article 4(3) of the Treaty on European Union (‘TEU’) and the institutional and procedural autonomy of the Member States, in conjunction with Articles 47 and 48 of the Charter of Fundamental Rights (‘the Charter’), as well as the right to effective judicial review mechanisms and the rights of defence laid down in those provisions, be interpreted as meaning that, in examining the requirements of EU law deriving from the case-law of the Court of Justice, and the necessity and proportionality of the restriction adopted by the Member State in question, the national court ruling on the dispute may order and carry out of its own motion the examination and the taking of evidence, even if this is not provided for under the national procedural legislation of the Member State? |
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10.

Must Article 56 TFEU, the sincere cooperation clause in Article 4(3) of the Treaty on European Union (‘TEU’) and the institutional and procedural autonomy of the Member States, in conjunction with Articles 47 and 48 of the Charter of Fundamental Rights (‘the Charter’), as well as the right to effective judicial review mechanisms and the rights of defence laid down in those provisions, be interpreted as meaning that, in examining the requirements of EU law deriving from the case-law of the Court of Justice, and the necessity and proportionality of the restriction adopted by the Member State in question, the national court ruling on the dispute may order and carry out of its own motion the examination and the taking of evidence, even if this is not provided for under the national procedural legislation of the Member State?

| 11. | Must Article 56 TFEU, in conjunction with Articles 47 and 48 of the Charter, as well as the right to effective judicial review mechanisms and the rights of defence laid down in those provisions, be interpreted as meaning that in examining the requirements of EU law deriving from the case-law of the Court of Justice, and the necessity and proportionality of the restriction adopted by the Member State in question, the national court ruling on the dispute cannot place the burden of proof on the service providers affected by the restriction, but that rather it is for the Member State — and, in particular, for the State authority that adopts the contested decision in question — to justify and demonstrate the compliance with EU law, as well as the necessity and proportionality of the national legislation, and that failure to do so has, by itself, the consequence that the national legislation breaches EU law? |
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11.

Must Article 56 TFEU, in conjunction with Articles 47 and 48 of the Charter, as well as the right to effective judicial review mechanisms and the rights of defence laid down in those provisions, be interpreted as meaning that in examining the requirements of EU law deriving from the case-law of the Court of Justice, and the necessity and proportionality of the restriction adopted by the Member State in question, the national court ruling on the dispute cannot place the burden of proof on the service providers affected by the restriction, but that rather it is for the Member State — and, in particular, for the State authority that adopts the contested decision in question — to justify and demonstrate the compliance with EU law, as well as the necessity and proportionality of the national legislation, and that failure to do so has, by itself, the consequence that the national legislation breaches EU law?

| 12. | Must Article 56 TFEU be interpreted, in the light also of the right to a fair procedure under Article 41(1), the right to be heard under Article 41(2)(a), and of the obligation to give reasons under 41(2)(c) of the Charter, as well as the sincere cooperation clause laid down in Article 4(3) TEU, and the institutional and procedural autonomy of the Member States, as meaning that those requirements are not fulfilled if the competent authority of the Member State does not notify the operator of games of chance of the initiation of administrative penalty proceedings in accordance with national law, and does not subsequently, in the course of the administrative proceedings, obtain that operator’s views on the compliance of the Member State’s legislation with EU law, and — without explaining in detail, in the reasons stated for the decision, that compliance and the evidence supporting it — imposes, in a single-instance procedure, a penalty classified as administrative under national law? |
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12.

Must Article 56 TFEU be interpreted, in the light also of the right to a fair procedure under Article 41(1), the right to be heard under Article 41(2)(a), and of the obligation to give reasons under 41(2)(c) of the Charter, as well as the sincere cooperation clause laid down in Article 4(3) TEU, and the institutional and procedural autonomy of the Member States, as meaning that those requirements are not fulfilled if the competent authority of the Member State does not notify the operator of games of chance of the initiation of administrative penalty proceedings in accordance with national law, and does not subsequently, in the course of the administrative proceedings, obtain that operator’s views on the compliance of the Member State’s legislation with EU law, and — without explaining in detail, in the reasons stated for the decision, that compliance and the evidence supporting it — imposes, in a single-instance procedure, a penalty classified as administrative under national law?

| 13. | In the light of Article 56 TFEU, Article 41(1) and (2)(a) and (c) of the Charter and Articles 47 and 48 thereof, as well as the right to effective judicial review mechanisms and the rights of the defence that those provisions entail, are the requirements laid down in those provisions fulfilled if the operator of games of chance may question the compatibility of the national legislation with EU law for the first time only before the national court? |
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13.

In the light of Article 56 TFEU, Article 41(1) and (2)(a) and (c) of the Charter and Articles 47 and 48 thereof, as well as the right to effective judicial review mechanisms and the rights of the defence that those provisions entail, are the requirements laid down in those provisions fulfilled if the operator of games of chance may question the compatibility of the national legislation with EU law for the first time only before the national court?

| 14. | May Article 56 TFEU and the obligation for the Member States to justify and state reasons for the restriction of the free movement of services be interpreted as meaning that the Member State has not fulfilled that obligation if the relevant impact assessment on which the public policy objectives of the restriction are based was not available at either the time it adopted the restriction or at the time of the examination? |
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14.

May Article 56 TFEU and the obligation for the Member States to justify and state reasons for the restriction of the free movement of services be interpreted as meaning that the Member State has not fulfilled that obligation if the relevant impact assessment on which the public policy objectives of the restriction are based was not available at either the time it adopted the restriction or at the time of the examination?

| 15. | Having regard to the framework laid down by the law for setting the amount of the administrative penalty that may be imposed, the nature of the activity penalised by the penalty, and, in particular, the extent to which the activity affects public policy and public security, as well as the punitive purpose of the penalty, may the administrative penalty in question be regarded as being ‘of a criminal nature’, for the purpose of Articles 47 and 48 of the Charter? Does this influence the answers to be given to the eleventh to fourteenth questions? |
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15.

Having regard to the framework laid down by the law for setting the amount of the administrative penalty that may be imposed, the nature of the activity penalised by the penalty, and, in particular, the extent to which the activity affects public policy and public security, as well as the punitive purpose of the penalty, may the administrative penalty in question be regarded as being ‘of a criminal nature’, for the purpose of Articles 47 and 48 of the Charter? Does this influence the answers to be given to the eleventh to fourteenth questions?

| 16. | Must Article 56 TFEU be interpreted as meaning that if, by virtue of the answers given to the foregoing questions, the court ruling on the dispute declares the legislation and its application unlawful, must it also declare that the penalty based on the national legislation that does not comply with Article 56 TFEU infringes EU law? |
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16.

Must Article 56 TFEU be interpreted as meaning that if, by virtue of the answers given to the foregoing questions, the court ruling on the dispute declares the legislation and its application unlawful, must it also declare that the penalty based on the national legislation that does not comply with Article 56 TFEU infringes EU law?

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