Information;Order — ECLI:EU:C:2022:336
Date: 2022-04-26
Language of the case: German
Court formation: Sixth Chamber
Subject matter: Freedom to provide services;Fundamental rights;Charter of Fundamental Rights
Procedure: Reference for a preliminary ruling
Origin: Austria

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
9 October 2020 
Referring court: 
Landesverwaltungsgericht Steiermark (Austria) 
Date of the decision to refer: 
23 September 2020 
Appellant: 
RM 
Respondent authority: 
Landespolizeidirektion Steiermark  
Subject matter of the case in the main proceedings 
Criminal penalties for infringements of the Glücksspielgesetz (the Law on games 
of chance), the issue of an accumulation of penalties with no upper limit in the 
event of high minimum criminal penalties 
Subject matter and legal basis of the reference 
Compatibility of the unlimited accumulation of fines (including custodial 
sentences in the event of non-payment and contributions to costs of proceedings) 
with Article 56 TFEU and Article 49(3) of the Charter of Fundamental Rights in 
the event of breaches of provisions that are not purely formal in nature 
Questions referred 
1. In the context of criminal proceedings that are being conducted in order to 
protect a monopoly system, must the national court or tribunal examine the 
applicable criminal penalty rule in the light of the freedom to provide services if it 
has previously examined the monopoly system in accordance with the guidance 
EN 
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provided by the European Court of Justice and that examination has revealed that 
the monopoly system is justified? 
2. If Question 1 is answered in the affirmative: 
2. (a) Must Article 56 TFEU be interpreted as precluding a national provision 
according to which, by way of sanction for making prohibited lotteries 
commercially available contrary to the Law on games of chance, a fine must be 
imposed per gaming machine, with no absolute limit on the total amount of the 
fines imposed? 
2. (b) Must Article 56 TFEU be interpreted as precluding a national provision 
which, by way of sanction for making prohibited lotteries commercially available 
contrary to the Law on games of chance, provides for the mandatory imposition of 
a minimum penalty of EUR 6 000 per gaming machine? 
2. (c) Must Article 56 TFEU be interpreted as precluding a national provision 
which, by way of sanction for making prohibited lotteries commercially available 
contrary to the Law on games of chance, provides for a custodial sentence in the 
event of non-payment per gaming machine, with no absolute limit on the total 
number of custodial sentences imposed? 
2. (d) Must Article 56 TFEU be interpreted as precluding a national provision 
which, in the event of a penalty being imposed for making prohibited lotteries 
commercially available contrary to the Law on games of chance, requires the 
payment of a contribution to the costs of criminal proceedings amounting to 10% 
of the fines imposed? 
3. If Question 1 is answered in the negative: 
3. (a) Must Article 49(3) of the Charter of Fundamental Rights of the European 
Union (‘the Charter’) be interpreted as precluding a national provision according 
to which, by way of sanction for making prohibited lotteries commercially 
available contrary to the Law on games of chance, a fine must be imposed per 
gaming machine, with no absolute limit on the total amount of the fines imposed? 
3. (b) Must Article 49(3) of the Charter be interpreted as precluding a national 
provision which, by way of sanction for making prohibited lotteries commercially 
available contrary to the Law on games of chance, provides for the mandatory 
imposition of a minimum penalty of EUR 6 000 per gaming machine? 
3. (c) Must Article 49(3) of the Charter be interpreted as precluding a national 
provision which, by way of sanction for making prohibited lotteries commercially 
available contrary to the Law on games of chance, provides for a custodial 
sentence in the event of non-payment per gaming machine, with no absolute limit 
on the total number of custodial sentences imposed? 
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3. (d) Must Article 49(3) of the Charter be interpreted as precluding a national 
provision which, in the event of a penalty being imposed for making prohibited 
lotteries commercially available contrary to the Law on games of chance, requires 
the payment of a contribution to the costs of criminal proceedings amounting to 
10% of the fines imposed? 
Provisions of EU law cited 
Article 56 TFEU; Article 49(3) of the Charter of Fundamental Rights (‘the 
Charter’) 
Provisions of national law cited 
Paragraphs 2(1) and (4), 19(1) and (7) and 52 of the Law on games of chance 
(Glücksspielgesetz; ‘the GSpG’) 
Paragraphs 9(1) and (7), 16(1) and (2), 19(1) and (2), 20 and 64(1) and (2) of the 
1991 Law on administrative offences (Verwaltungstrafgesetz; ‘the VStG’) 
Paragraphs 38 and 52 of the Law on the rules of procedure for administrative 
courts (Verwaltungsgerichtsverfahrensgesetz; ‘the VwGVG’) 
Summary of the facts and procedure 
1 The questions referred have been raised in the context of the review of a penalty 
order issued by the competent criminal authority, under which the appellant was 
found guilty of ten offences under the Law on games of chance and against which 
he has brought an appeal before the Landesverwaltungsgericht Steiermark 
(Regional Administrative Court, Styria, Austria; ‘the administrative court’). 
2 By way of administrative penalty, the appellant was found guilty of allowing the 
company (J GmbH), represented by him as managing director, to make prohibited 
lotteries commercially available in a café using a total of ten gaming machines 
between 4 December 2018 and 28 February 2019, thereby committing a total of 
ten breaches of the third offence set out in point 1 of Paragraph 52(1) of the Law 
on games of chance. J GmbH made the lotteries commercially available by 
permitting, in exchange for payment, the operation of prohibited lotteries in the 
form of games of chance using gaming machines in its café. J GmbH was liable 
for the fines imposed and the costs of the proceedings. For each breach – that is to 
say, for each gaming machine – the authority responsible for administrative 
offences imposed an administrative fine of EUR 30 000 as well as a custodial 
sentence, in the event of non-payment, of seven days (for ten machines, this 
amounted to a total of EUR 300 000 and 70 days custodial sentence in the event of 
non-payment) and, in addition, required the appellant to pay a contribution 
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towards the costs of the criminal proceedings amounting to EUR 30 000. Seizure 
of the gaming machines was ordered against J GmbH. 
3 The appellant and J GmbH have brought appeal proceedings against the penalty 
order before the Landesverwaltungsgericht Steiermark (Regional Administrative 
Court, Styria). 
Summary of the basis for the reference 
4 The assessment, by the referring court, of the lawfulness of the penalties imposed 
by the criminal authority depends on whether the provisions of the Law on games 
of chance that govern the determination of criminal penalties, in conjunction with 
the provisions of the Law on administrative offences to be applied by the 
administrative court when determining penalties, are consonant with EU law 
(general principles of limitation of the freedom to provide services and 
Article 49(3) of the Charter). 
5 In its judgment of 12 September 2019 in Case C-64/18, Maksimovic and Others, 
the Court of Justice ruled on a number of requests for a preliminary ruling 
concerning the proportionality of the relevant Austrian provisions which provided, 
on the one hand, for the imposition of minimum fines per worker concerned 
without setting a ceiling on the total amount of such fines and, on the other, for 
custodial sentences in the event of failure to pay such fines. The Court of Justice 
held that Article 56 TFEU must be interpreted as precluding national legislation 
such as that at issue in the main proceedings which, with regard to non-
compliance with labour-law obligations on obtaining administrative permits and 
keeping records on wages, provides for fines to be imposed that must not be lower 
than a predefined minimum amount, that apply cumulatively in respect of each 
worker concerned and without an upper limit, that involve an additional 
contribution to court costs of 20% of the fine imposed if the appeal against the 
decision imposing those fines is dismissed, and that are replaced by custodial 
sentences in the event of non-payment (see also the order of the Court of Justice 
of 19 December 2019, NE v Bezirkshauptmannschaft Hartberg, C-645/18). 
6 In the present case, the examination of the imposition of penalties in respect of 
several breaches of the Law on games of chance now raises the question as to how 
Article 56 TFEU and possibly Article 49(3) of the Charter are to be interpreted for 
the purposes of assessing compatibility with EU law of the fourth penalty range of 
Paragraph 52(2) of the Law on games of chance and Paragraphs 16 and 64(2) of 
the Law on administrative offences. 
Examination of the determination of the penalty in the light of Article 56 TFEU 
(Question 1): 
7 The establishment of public monopolies is a measure that restricts the freedom to 
provide services guaranteed by Article 56 TFEU. Such a monopoly system, 
which, among other things, has the advantage of confining the desire to gamble 
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and the exploitation of gambling within controlled channels, is capable of coming 
within the pursuit of public-interest objectives (see, for example, CJEU 
8 September 2010, Markus Stoß and Others, C-316/07, paragraph 79, 
EU:C:2010:504). 
8 Such ‘overriding requirements in the public interest’ are consumer protection and 
the prevention of both fraud and incitement to squander money on gambling (see 
CJEU 30 April 2014, Pfleger, C-390/12, paragraph 41), given that Article 56 
TFEU precludes legislation that does not actually pursue the objective of 
protecting gamblers or fighting crime and does not genuinely meet the concern to 
reduce opportunities for gambling or to fight gambling-related crime in a 
consistent and systematic manner (CJEU, Pfleger, paragraph 56). 
9 According to the case-law of the CJEU, the prevention of and the combating of 
money laundering and terrorist financing are legitimate aims which the Member 
States have endorsed both at the international and EU levels (CJEU 25 April 2013, 
Jyske Bank Gibraltar Ltd, C-212/11, paragraph 62, EU:C:2013:270). The 
combating of money laundering, which is related to the aim of protecting public 
order, constitutes a legitimate objective capable of justifying a barrier to the 
freedom to provide services (see Jyske Bank Gibraltar Ltd, paragraph 64). 
10 According to this case-law of the CJEU, Member States enjoy a sufficient 
measure of discretion in the area of the organisation of games of chance to enable 
them to determine what is required in order to ensure consumer protection and the 
preservation of order in society. Provided that the conditions laid down in the 
Court’s case-law are in fact met, it is for each Member State to assess whether, in 
the context of the legitimate aims which it pursues, it is necessary to prohibit 
betting and gaming wholly or in part or only to restrict them and, to that end, to 
lay down more or less strict supervisory rules (see Pfleger, paragraph 45). 
Examination of the determination of the penalty under Article 49 of the Charter: 
11 If the first question is answered in the negative, the referring court goes on to ask 
whether the legal provisions to be applied by the referring court when reviewing 
the determination of the penalty are considered to be proportionate within the 
meaning of Article 49(3) of the Charter. 
In the event that Question 1 is answered in the affirmative (Questions 2(a) to 2(d)) 
and in the event that Question 1 is answered in the negative (Questions 3(a) to 
3(d)): 
12 It should be noted at the outset that, according to settled case-law of the 
Verwaltungsgerichtshof (Supreme Administrative Court) regarding the Law on 
games of chance, each of the offences referred to in Paragraph 52(1) constitutes a 
separate administrative offence for each gaming machine, for which separate 
penalties must be imposed in accordance with Paragraph 22 of the Law on 
administrative offences. In the present case, the statement of reasons for the 
penalty order suggests that, in calculating the fines, the authority applied the 
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fourth penalty range of Paragraph 52(2) of the Law on games of chance, which 
provides that, in the first repeat case and in any subsequent repeat cases of making 
prohibited lotteries commercially available with more than three gaming 
machines, a minimum fine of EUR 6 000 and a maximum fine of EUR 60 000 per 
gaming machine may be incurred. 
13 The determination of the penalty within the limits of the statutory penalty range is 
a discretionary choice that must be made in accordance with the criteria laid down 
by the legislature in Paragraph 19 of the Law on administrative offences 
(significance and impairment of the protected legal interest, aggravating and 
mitigating factors, fault, financial situation). It should also be noted in this regard 
that, in the present case, the minimum penalty of EUR 6 000 for each 
infringement provided for by the Law on games of chance may be reduced by up 
to half (that is to say, to EUR 3 000 per device) in particular cases pursuant to 
Paragraph 20 of the Law on administrative offences in the event that the 
mitigating factors significantly outweigh the aggravating factors. 
14 Against the background of the abovementioned case-law of the Court of Justice 
regarding the unlawfulness of imposing minimum penalties, cumulative fines and 
their conversion into custodial sentences in the event of non-payment for the 
breach of labour-law obligations (see Maksimovic), the question arises in the 
present case as to whether Article 56 TFEU (and, if Article 56 TFEU is found to 
be inapplicable in this case, Article 49(3) of the Charter) must be interpreted as 
also precluding legislation such as the fourth penalty range listed in 
Paragraph 52(2) of the Law on games of chance; in other words, whether the 
reasoning followed by the Court of Justice in Maksimovic is transferable to 
legislation which, like point 1 of Paragraph 52(1) of the Law on games of chance, 
imposes a criminal sanction on the organisation of games of chance without a 
licence and consequently without supervision, for example, with regard to the 
protection of gamblers. 
15 As the Verwaltungsgerichtshof (Supreme Administrative Court) has pointed out 
on several occasions in the light of the Court of Justice’s case-law on the 
lawfulness of the establishment of a monopoly on games of chance, such a 
provision adequately ensures that the objectives of the legislature are in fact being 
pursued in a consistent and systematic manner, in particular by defining the 
regulatory framework for supervision by a public authority in Paragraph 50 of the 
Law on games of chance: Infringements of the Law on games of chance must be 
punished effectively in order to enable the monopoly system combined with a 
licensing system to succeed given that it would otherwise be ineffective. In fact, 
compliance with the monopoly (its effectiveness) must be ensured (see Markus 
Stoß and Others, paragraph 84 et seq.). 
16 The referring court is of the view that the infringements referred to in point 1 of 
Paragraph 52(1) of the Law on games of chance do not constitute infringements of 
mere administrative rules that serve administrative purposes. Rather, they are 
designed to ensure that the monopoly, which was created legitimately in 
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accordance with EU law, is safeguarded against individuals who do not comply 
with any rules regarding protection of those gambling and do not submit to any 
supervision (for example, anti-money-laundering provisions, see Paragraph 19(7) 
of the Law on games of chance). For example, the operation of prohibited lotteries 
using gaming machines, which are notorious for having a particularly high 
potential for addiction and are therefore particularly dangerous, is subject to 
penalties. The penalty ranges laid down in Paragraph 52(2) of the Law on games 
of chance are based on the total number of gaming machines involved in each 
infringement. 
17 It should be borne in mind in this context that the procedure for the grant of a 
licence or an authorisation granted under the Law on games of chance is not 
merely a measure in which the applicant for the licence is required to satisfy 
purely formal requirements. Rather, given the very limited number of licences 
and/or authorisations available and the high standards which must be met by 
applicants, it can be assumed that, as a general rule, the operation of games of 
chance is prohibited and cannot be regarded as the exercise of an activity that is 
generally permitted and that is guaranteed by the fundamental freedoms. The 
imposition of severe penalties does not therefore render the exercise of a freedom 
granted to everyone less attractive; rather, it is aimed at effectively preventing the 
organisation of all types of games of chance by individuals without a licence 
and/or authorisation and the adverse effects which ensue for the general public 
interest. 
18 The question therefore arises as to whether Article 56 TFEU (and Article 49(3) of 
the Charter) also precludes a provision the purpose of which is to prevent an 
illegal act that carries with it a serious level of social harm. The offences listed in 
Article 52(1) of the Law on games of chance do not constitute an infringement of 
a mere registration obligation but rather the impairment of significant public 
interests the safeguarding of which, in the view of the Austrian legislature, calls 
for severe penalties on general and special preventive grounds. 
19 Against the background of that ratio legis, the referring court considers that it is 
necessary in this regard to examine separately whether Article 56 TFEU (and 
Article 49(3) of the Charter) precludes the legally prescribed mechanism for 
determining the penalty, as described below: 
Imposition of fines without limit as to amount as well as minimum penalties 
(Questions 2(a) and 2(b) and Questions 3(a) and 3(b)) 
20 First, a fine of (in the present case) at least EUR 6 000 must be imposed for each 
infringement, that is to say, per gaming machine (which, in particular 
circumstances, may be reduced by half pursuant to Paragraph 20 of the Law on 
administrative offences). The total fines imposed on the accused are ultimately the 
result of the number of infringements, that is to say, the number of gaming 
machines used. By adopting this approach, the Austrian legislature seeks to 
counteract the commercial gains that may be achieved through commission of the 
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offence, by making the illegal operation of gaming machines increasingly 
unattractive and further curbing their use. Consequently, in the typical scenario, 
where the same fines are set for each infringement, the total fine is the result of 
multiplying the number of gaming machines by the amount of the individual fine. 
21 In view of the minimum penalty to be applied in the present case (EUR 6 000 per 
gaming machine), a large number of machines, as is the case here, result in a 
minimum fine of EUR 60 000, and, in the case of an ‘amusement arcade’ with 
approximately 50 gaming machines, in a total minimum fine of EUR 300 000. 
The explanatory notes on the Austrian draft legislation state that the penalty 
differentiates between different levels of severity in that, in the event of a breach 
involving more than three gaming machines, thrice the minimum penalty is to 
apply. On the one hand, this would penalise the organised scale on which the 
illegal act is typically committed and, on the other, counter the economic gains 
typically made from the illegal action. Under this penalty model the total fine is, 
by its very nature, unlimited because it necessarily depends on the number of 
gaming machines installed and the law does not set a ceiling for the total amount 
of the fines. 
Imposition of custodial sentences in the event of non-payment (Questions 2(c) and 
3(c)) 
22 The next question that arises is whether the severity of the illegality and the 
socially harmful nature of the offences justify the imposition of custodial 
sentences in the event of non-payment. Custodial sentences are enforced only if 
neither the person being penalised nor the company liable pay the fines imposed. 
23 If a fine is imposed, a custodial sentence in the event of non-payment must be 
ordered at the same time (Paragraph 16(1) of the Law on administrative offences), 
which may, in the present case, be no more than two weeks per breach. According 
to the settled case-law of the Verwaltungsgerichtshof (Supreme Administrative 
Court), there is an intrinsic link between the calculation of the custodial sentence 
in the event of non-payment and the fine in the sense that, when calculating the 
custodial sentence in the event of non-payment, account must be taken of whether 
the accused committed the offence intentionally or merely negligently. Where 
there is a significant difference between the amount of the fine and the custodial 
sentence (with regard to the maximum penalty), sufficient reasons must be 
provided. 
24 The system of custodial sentences in the event of non-payment is intended to 
ensure that the offence found to have been committed does not go unpunished 
even where it is impossible to enforce payment of the fine. In the same way as 
with the imposition of fines, due to the accumulation there is also no statutory 
ceiling provided with regard to the total number of custodial sentences. The total 
duration of the custodial sentences in the event of non-payment (provided the 
respective fines are for the same amount) is also determined by multiplying a 
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custodial sentence imposed in the event of non-payment by the number of 
offences (gaming machines). 
The contribution to the costs of proceedings (Questions 2(d) and 3(d)) 
25 Finally, the referring court asks whether EU law must be interpreted as precluding 
a mandatory contribution to the costs of criminal proceedings amounting to 10% 
of the fines imposed.