Order — ECLI:EU:C:2022:824
Date: 2022-10-18
Language of the case: German

Summary C-231/20 — 1 
Case C-231/20 
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: 
3 June 2020 
Referring court: 
Verwaltungsgerichtshof (Austria) 
Date of the decision to refer: 
27 April 2020 
Appellant on a point of law: 
Josef Ziri 
Defendant authority: 
Landespolizeidirektion Steiermark (Regional Police Directorate, 
Steiermark) 
  
Subject matter of the case in the main proceedings 
Criminal penalties for infringement of the Glücksspielgesetz (Austrian 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 
EN 
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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 
provided by the 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 fine 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 3 000 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 fine 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 3 000 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 
Provisions of national law cited 
Paragraphs 2(1) and (4), 19(1) and (7) and 52 of 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’) 
Article 38 of the Law on the rules of procedure for the administrative courts 
(Verwaltungsgerichtsverfahrensgesetz, ‘the VwGVG’) 
Court of Justice case-law cited 
Judgment of 30 April 2014, Pfleger, C-390/12; judgment of 11 June 2015, 
Berlington Hungary, C-98/14; judgment of 12 September 2019, Maksimovic et 
al., C-64/18; order of 19 December 2019, NE/Bezirkshauptmannschaft Hartberg, 
C-645/18; judgment of 8 September 2010, Markus Stoß et al., C-316/07; judgment 
of 25 April 2013, Jyske Baak Gibraltar Ltd., C-212/11 
Summary of the facts and procedure 
1 The questions referred were raised in the context of the review of the penalty 
imposed by way of a penalty order issued by the relevant authority, under which 
the appellant was found guilty of ten offences under the Law on games of chance 
and which, following the partial success of his appeal with regard to the action 
relating to the sentence before the Landesverwaltungsgericht Steiermark 
(Regional Administrative Court, Styria, Austria, ‘the administrative court’) which 
reduced the penalty per offence, is now the subject of an appeals on points of law 
before the referring court. The questions of EU law referred by way of request for 
a preliminary ruling to the Court of Justice of the European Union are 
representative of other cases of appeal on points of law brought before the 
referring court. 
2 By way of administrative penalty, the appellant was found guilty of allowing the 
company (A GmbH), represented by him as managing director, to make 
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prohibited lotteries commercially available in a café using a total of ten gaming 
machines between 30 April and May 2016, thereby committing a total of ten 
violations of the third offence in point 1 of Paragraph 52(1) of the Law on games 
of chance. For each violation — that is for each gaming machine — the authority 
imposed an administrative fine of EUR 10 000 as well as a custodial sentence, in 
the event of non-payment, of three days (for ten machines, this amounted to a total 
of EUR 100 000 and 30 days custodial sentence in the event of non-payment) and, 
in addition, required the appellant to pay a contribution towards the costs of the 
criminal proceedings of EUR 10 000. In its capacity as the organiser of the games 
of chance involving the 10 gaming machines, F s.r.o., a company established in 
Slovakia, received a final and binding penalty order. Seizure of the gaming 
machines was ordered both against A GmbH and (the Slovakian company) F 
s.r.o.. 
3 In appeal proceedings brought by the appellant against the penalty order, the 
administrative court carried out a general examination of the circumstances of the 
enactment and implementation of the Law on games of chance and arrived at the 
conclusion that the restrictions it places on the freedom to provide services were 
justified. It dismissed the appeal brought by the appellant against the 
administrative penalty order in the proceedings at first instance, both with regard 
to the guilty verdict and with regard to the penalty imposed. The appellant lodged 
an appeal on points of law against that decision to the referring court. 
4 In initial appeal proceedings, the decision of the administrative court regarding the 
criminal proceedings of the appellant was upheld by the referring court in relation 
to the guilty verdict, but was set aside in relation to the penalty imposed. 
Subsequently, in a ruling handed down in the appeal proceedings back before it, 
the administrative court upheld the appellant’s appeal in relation to the penalty 
imposed by applying the third penalty range of Article 52(2) of the Law on games 
of chance and imposing ten fines of EUR 4 000 each and ten custodial sentences 
in the event of non-payment of one day each (amounting to a fine totalling 
EUR 40 000 and ten days’ custodial sentences in the event of non-payment). The 
contribution to costs for the administrative penal proceedings at first instance was 
fixed at EUR 4 000. The appellant brought the present appeal against the penalty 
to the referring court.  
Summary of the basis for the reference 
5 The assessment, by the referring court, of the lawfulness of the penalties imposed 
by the administrative court 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 applicable 
by the administrative court when determining penalties, are compatible with EU 
law (general principles of limitation of the freedom to provide services and 
Article 49(3) of the Charter of Fundamental Rights). The decision of the Supreme 
Administrative Court on the present appeal on points of law depends on the 
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answers given to the questions of interpretation of European Union law set out in 
the present request for a preliminary ruling and examined below. 
6 The Court of Justice has held that provisions of EU law, in particular the Charter 
and Article 56 TFEU, were applicable if the organiser of illegal games of chance 
resided in Austria and the alleged owner of those machines was a company 
established in the Czech Republic (see judgment C-390/12, Pfleger, para 10, 33 to 
36). In the administrative penal proceedings which have given rise to the present 
appeal, the organiser of the games of chance is a company established in Slovakia; 
A GmbH, represented by the appellant, made those games available in a café. 
Furthermore, the Court of Justice also based the existence of a cross-border 
situation on the fact that it is far from inconceivable that operators established in 
other Member States have been or are interested in opening amusement arcades 
in, for instance, Hungary (Case C-98/14 Berlington Hungary, paragraph 27). 
7 The Court of Justice has previously held that a provision that prohibits inter alia 
the operation of gaming machines without prior authorisation of the administrative 
authorities constitutes a restriction of the freedom to provide services guaranteed 
by Article 56 TFEU (see inter alia, Pfleger, para. 39); when assessing whether a 
restriction of the freedom to provide services under the provisions of the Law on 
games of chance is permissible, the national court must take into account all the 
evidence as required under EU law (see Pfleger, para. 50). Owing to the guilty 
verdict, under EU law this appeal only requires an assessment of the 
proportionality of the imposition of the penalties which had to be imposed for the 
illegal interference in the monopoly. 
8 In its judgment of 12 September 2019 in Case C-64/18 Maksimovic and Others, 
the Court of Justice ruled on a number of references for a preliminary ruling 
concerning the proportionality of the relevant Austrian provisions in the field of 
cross-border labour activity which, on the one hand, provided 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 
CJEU 19 December 2019, NE/Bezirkshauptmannschaft Hartberg, C-645/18). 
9 In the present appeal, the examination of the imposition of penalties in respect of 
several violations of the Law on games of chance now raises the question of how 
Article 56 TFEU and possibly Article 49(3) of the Charter shall be interpreted for 
purposes of assessing compatibility with EU law of the third penalty range of 
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Article 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): 
10 In the appeal proceedings at first instance the administrative court examined the 
interference in the freedom to provide services in the form of an overall 
assessment in the light of the criteria laid down by the Court of Justice (see Stoß, 
C-316/07 paragraph 79; Pfleger, C-390/12, paragraphs 41, 45 56 and 62; Jyske 
Baak Gibraltar Ltd., C-212/11, paragraphs 62 and 64) and concluded that the 
provisions of the Law on games of chance, which provide that the operation of 
gaming machines without the required licence constitutes a punishable offence, 
were not contrary to EU law. 
11 In the examination of the determination of the penalty carried out by the 
administrative court at second instance, the referring court asks, first, whether as a 
second step the question of the proportionality of the penalties provided for by law 
in the event of an infringement of the monopoly needs to be examined in the light 
of the freedom to provide services or whether such examination (only) needs to be 
carried out in the light of the domestic constitutional framework. 
Examination of the determination of the penalty under Article 49 of the Charter: 
12 If the first question is answered in the negative, the referring court goes on to ask 
whether the legal provisions applicable by the administrative 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 1is 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)): 
13 It should be noted at the outset that, according to settled case-law of the 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, in calculating the fines, the administrative court applied the third 
penalty range of Paragraph 52(2) of the Law on games of chance, which provides 
that the first case of making prohibited lotteries commercially available with more 
than three gaming machines incurs a fine of between EUR 3 000 and EUR 30 000 
per gaming machine. 
14 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 legislator in Paragraph 19 of the Law on administrative offences 
(significance and impairment of the protected legal interest, aggravating and 
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mitigating factors, fault, financial situation). It should also be noted in that regard 
that, in the present case, the minimum penalty of EUR 3 000 provided for by the 
Law on games of chance may be reduced by up to half (that is EUR 1 500 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. 
15 Against the background of the aforementioned 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), this raises the question in the 
present case 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 third penalty range listed in Paragraph 52(2) of 
the Law on games of chance; in other words, if 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 
organising games of chance without a licence and consequently without 
supervision, for example, with regard to the protection of players. 
16 As the administrative court has pointed out on several occasions in the light of the 
Court of Justice’s case-law on the lawfulness of a monopoly on games of chance, 
such a provision adequately ensures that the objectives of the legislator 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 
penalised 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 Stoß, 
paragraph 84 et seq.). 
17 The referring court believes 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. Instead they are 
aimed at ensuring that the monopoly, which was created legitimately in 
accordance with EU law, is safeguarded against individuals who do not comply 
with any rules regarding player protection 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 organisation 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 provided for in Paragraph 52(2) of the Law on games of chance are 
based on the total number of gaming machines involved in each infringement. 
18 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 
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purely formal requirements. Instead, given the very limited number of licences 
and/or authorisations available and the high standards required to 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; instead 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. 
19 The question therefore arises as to whether Article 56 TFEU (and Article 49(3) of 
the Charter) also precludes a provision whose purpose it is to prevent an illegal act 
that carries with it a serious 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 whose 
safeguarding requires severe penalties on general and special preventive grounds 
in the view of the Austrian legislator. 
20 Against the background of that ratio legis, the referring court considers that it is 
necessary in that 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)) 
21 First, a fine of at least EUR 3 000 must be imposed for each infringement, i.e. 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 the number of gaming machines used. With this approach, the Austrian 
legislator wants to counteract the commercial gains that may be achieved by 
committing the 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.  
22 In view of the minimum penalty applicable in the present case (EUR 3 000 per 
gaming machine), a large number of machines, as is the case here, result in a 
minimum fine of EUR 30 000, and, in the case of an ‘amusement arcade’ with 
approximately 50 gaming machines, in a total minimum fine of EUR 150 000. 
The explanatory notes on the Austrian bill state that the penalty differentiates 
between different levels of severity in that, in the event of a violation involving 
more than three gaming machines, three times the minimum penalty applies. On 
the one hand, this would penalise the organised scale on which the illegal act is 
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typically committed and, on the other, the economic gains typically made from the 
illegal action. Under this penalty model the total fine is, by its very nature, 
unlimited because it has to depend on the number of gaming machines installed 
and the law does not set a ceiling for total fines.  
Imposition of custodial sentences in the event of non-payment (Questions 2c and 
3c) 
23 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 only enforced if 
neither the person being penalised nor the company liable pay the fines imposed. 
24 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 violation. 
According to the settled case-law of the referring 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. 
25 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 
custodial sentence imposed in the event of non-payment by the number of 
offences (gaming machines).  
The contribution to costs (Questions 2 (d) and)) 
26 Finally, the referring court asks whether EU law must be interpreted as precluding 
a mandatory contribution to the costs of criminal proceedings of 10% of the fines 
imposed (Paragraph 64(2) of the Law on administrative offences).