62001CC0006_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
1. By an order of 18 December 2000, the 15a Vara Cível da Comarca de Lisboa, 2a Secção (Second Chamber of the Lisbon Civil Courts) (Portugal) (hereinafter:
" the Vara Cível" ) asked the Court to rule on whether the Portuguese legislation on the operation of and engagement in games of chance is compatible with Community law.
I ─ Legislative framework
A ─ Community law
2. The EC Treaty establishes the principle of free movement of goods. In particular, as regards this case, Articles 28 EC and 29 EC prohibit the introduction of quantitative restrictions on imports and exports, as well as all measures having equivalent effect.
3. For its part, Article 30 EC provides:
" The provisions of Articles 28 and 29 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States."
4. Under Article 31 EC:
" 1. Member States shall adjust any State monopolies of a commercial character so as to ensure that no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States.
The provisions of this article shall apply to any body through which a Member State, in law or in fact, either directly or indirectly supervises, determines or appreciably influences imports or exports between Member States. These provisions shall likewise apply to monopolies delegated by the State to others.
2. Member States shall refrain from introducing any new measure which is contrary to the principles laid down in paragraph 1 or which restricts the scope of the Articles dealing with the prohibition of customs duties and quantitative restrictions between Member States.
... .
"
5. As regards the free movement of services, which the Treaty similarly establishes as a fundamental freedom, I would merely point out that, according to Article 49 EC:
" Within the framework of the provisions set out below, restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended.
The Council may, acting by a qualified majority on a proposal from the Commission, extend the provisions of the Chapter to nationals of a third country who provide services and who are established within the Community.
"
B ─ Portuguese legislation
6. The Portuguese rules on gaming are laid down by Decree-Law No 422/89 of 2 December 1989 (hereinafter:
" Decree-Law No 422/89"
or simply
" the Decree" ), (2) which reserves for the State the right to operate and engage in games of chance and combinations of games of chance and other games, by providing that the operation of and engagement in such games outside the gaming areas prescribed by law and the establishments which hold a public licence constitute a criminal offence.
7. According to Article 1 of the Decree, games of chance are
" games whose result is uncertain because they depend exclusively or essentially on chance."
That category includes games based on the use of gaming machines, both where the machine pays out the winnings directly to the player and where, though the machine does not pay out prizes directly in tokens or coins, it involves matters proper to games of chance (such as poker, roulette, dice and so on) or awards the player
" a result in the form of points depending exclusively or essentially on chance"
(Article 4 of the Decree).
8. Decree-Law No 422/89 makes the operation of and engagement in games of chance subject to a twofold limitation: on the one hand, the right to operate such games is reserved for the State and may be exercised solely by undertakings incorporated as public limited companies, which have to enter into an administrative licensing agreement with the State on the basis of a public tendering procedure (Article 9). Furthermore, the operation of and engagement in such games must take place exclusively in authorised locations and, more precisely, in permanent or temporary gaming areas defined by decree-law, as well as (in exceptional cases and subject to ministerial authorisation) on ships, aircraft, premises reserved for the game of bingo and on the occasion of events of major tourist interest (Article 3(1), (6), (7) and (8)).
9. Under Article 108 of the Decree, anyone exploiting, in any way, games of chance outside the premises authorised by law is subject to a sentence of up to two years ' imprisonment and a fine.
10. Under Article 110, any person caught engaging in games of chance outside the locations authorised by law is subject to up to six months ' imprisonment and a fine; and, under Article 111, any person present in premises in which games of chance are engaged in illegally (but is not himself caught engaging in such games) is subject to half that penalty.
11. Moreover, since, in accordance with Article 68 of the Decree, the authorisation of the Inspectorate-General for Gaming and Betting is required for the manufacture, export, import, sale and transport of equipment specifically designed for the exploitation of games of chance, Article 115 provides that any person manufacturing, advertising, importing, transporting, marketing, exhibiting or distributing such equipment without such authorisation is subject to up to two years ' imprisonment and a fine.
12. Also material in this connection is Decree-Law No 316/95 of 28 November 1995 (hereinafter:
" Decree-Law No 316/95" ), Article 16 of which draws a distinction between games of chance and
" amusement machines", the latter defined as machines which:
" (a) ... without paying out prizes directly in tokens or goods with a commercial value, run games the result of which depends exclusively or fundamentally on the player ' s ability, enabling the latter to extend the time he can play the machine free of charge on the basis of the points he has obtained;
(b) ... possess the characteristics described in paragraph (a) above and make it possible to obtain items the commercial value of which is no more than three times the sum the player pays in.
"
13. It is for the Inspectorate-General for Gaming and Betting to classify
" games the result of which depends exclusively or essentially on the player ' s skill"
as provided for in Article 16 of Decree-Law No 316/95.
14. Any person wishing to import, manufacture, assemble or sell
" amusement machines"
must request the Inspectorate-General for Gaming and Betting to classify the game operated by the machine in question, and the relevant classification document must accompany the machine (Article 19 of Decree-Law No 316/95).
15. The operation of individual amusement machines is subject to the authorisation of the district civil governor and entry in a register of amusement machines (Articles 17 and 20 of Decree-Law No 316/95).
II ─ Facts, main proceedings and the questions referred to the Court
16. The Associação Nacional de Operadores de Máquinas Recreativas (hereinafter:
" Anomar" ), an umbrella association for Portuguese operators in the gaming machines sector, together with a number of companies active in the gaming machines sector, all legal persons under Portuguese law operating in Portugal, have brought an action against the Portuguese State before the Vara Cível, seeking recognition of their right to engage in the commercial operation of games of chance outside the gaming zones laid down by law, thus putting an end to the monopoly of casinos which Anomar considers to be contrary to the principles of Community law. Secondly, again on the ground of incompatibility with Community law, the claimants are seeking a declaration that Articles 108, 110, 111 and 115 of Decree-Law No 422/89 are inapplicable, since they make the operation of and engagement in games of chance, as well as the unauthorised trade in equipment specifically designed for playing games of chance, a criminal offence.
17. The application was rejected at first instance by the Vara Cível on the ground that the claimant Anomar did not have legal standing and the other claimants did not have an interest in the result of the case. On appeal, however, the Tribunal da Relação (Court of Second Instance), Lisbon, recognised that the claimants did have an interest in bringing proceedings and referred the case back to the Vara Cível for a decision on the merits. Once the case had been referred back to it, the Vara Cível stayed proceedings and referred the following questions to the Court of Justice for a preliminary ruling:
" 1. Do games of chance constitute an
" economic activity"
within the meaning of Article 2 EC?
2. Do games of chance constitute an activity relating to
" goods"
which is covered, as such, by Article 28 EC?
3. Are activities relating to the manufacture, importation and distribution of gaming machines separate from the operation of such machines and, therefore, is the principle of the free movement of goods laid down by Articles 28 and 29 EC applicable to such activities?
4. Are the operation of and engagement in games of chance excluded from the scope of Article 31 EC, in view of the fact that that provision does not cover monopolies in the provision of services?
5. Does the operation of gaming machines constitute a
" provision of services"
and, as such, is it covered by Article 49 et seq. EC?
6. Does a body of legal rules (such as is established in Articles 3(1) and 4(1) of Decree-Law No 422 of 2 December 1989) under which the operation of and engagement in games of chance (defined by Article 1 of that instrument as
" those whose result is uncertain since it depends exclusively or fundamentally on chance" ) ─ which include (under Article 4(1)(f) and (g) of Decree-Law No 422/89) games played on machines which pay out prizes directly in tokens or money and games on machines which, while not paying out directly prizes in tokens or money, involve matters proper to games of chance or have as their result the awarding of points depending exclusively on chance ─ is authorised only in casinos in permanent or temporary gaming areas created by decree-law, constitute a barrier to the freedom to provide services, in the sense contemplated in Article 49 EC?
7. On the basis that the restrictive rules described at 6 above do constitute a barrier to freedom to provide services, in the sense contemplated in Article 49 EC, are they, given that they are applicable without distinction to Portuguese nationals and undertakings and to nationals and undertakings of other Member States and are, moreover, based on overriding public-interest considerations (consumer protection, crime prevention, protection of public morality, restriction of demand for gambling and the financing of public-interest activities), inthose circumstances compatible with Community law?
8. Is the activity of operation of games of chance subject to the principles of freedom of access to and pursuit of any economic activity whatever and, therefore, does the possible existence of legislation inother Member States which lays down less restrictive conditions for the operation of gaming machines sufficient to vitiate, of itself, the validity of the Portuguese rules described at 6 above?
9. Do the restrictions laid down inthe Portuguese legislation on the activity of operation of games of chance comply with the principle of proportionality?
10. Do the Portuguese rules making authorisation subject to legal (conclusion of an administrative contract with the State following a tendering procedure: Article 9 of the abovementioned Decree-Law No 422/89) and logistical (operation and engagement in games of chance restricted to gaming areas: Article 3 of that instrument) conditions constitute a requirement which is appropriate and necessary to the objectives that are being pursued?
11. Does the use by the Portuguese legislation (Articles 1, 4(1)(g) and 169 (3) of the abovementioned Decree-Law No 422/89 and Article 16(1)(a) of Decree-Law No 316/95 of 28 November 1995) of the word
" fundamentally", in conjunction with the word
" exclusively", in order to define games of chance and to draw a legal distinction between
" gaming machines"
and
" amusement machines", call in question the precision of the concept according to the usual legal interpretation?
12. Do the imprecise legal concepts to which the Portuguese legislation resorts in defining
" games of chance"
(Articles 1 and 162 (4) of Decree-Law No 422/89, cited above) and
" amusement machines"
(Article 16 of Decree-Law No 316/95, cited above) call for interpretation, for the purpose of classifying the various types of amusement machines, which also falls within the margin of assessment which the national authorities enjoy?
13. Even if it were considered that the Portuguese legislation at issue does not lay down objective criteria to distinguish between gaming machines and amusement machines, does the conferring on the Inspecção-Geral de Jogos(Inspectorate-General for Gaming and Betting) of a discretionary power to classify in matters of gaming infringe any principle or rule of Community law?
"
III ─ Procedure before the Court of Justice
18. During the written procedure before the Court of Justice, Anomar and others, the claimants in the main action, submitted observations, as did the Portuguese, Spanish, German, Belgian and Finnish Governments and the Commission.
IV ─ Legal analysis
A ─ The strictly domestic scope of the questions referred to the Court and their admissibility
19. I shall begin by reviewing a number of preliminary issues concerning the relevance and admissibility of the questions referred by the national court.
The strictly domestic nature of the case
20. Firstly, the Portuguese and Belgian Governments raise the objection that the questions referred to the Court are not relevant because the dispute pending before the national court is strictly domestic in nature and has no significant link with Community law. The Court should therefore refrain from answering the questions referred by the national court, in accordance with its own case-law on this matter. The Portuguese Government in fact cites a number of judgments in this connection, in particular the decisions in
Transporoute (5) and
Gauchard, (6) in which the Court made clear that the Treaty provisions on services and establishment do not apply where the activity in question is limited to the territory of a single Member State. Nor is the merely theoretical possibility of transnational situations arising in a context of that nature sufficient to establish the link required for the purpose of applying the Treaty. (7)
The Court followed that doctrine in its judgments in
Schindler, (8) Zenatti (9) and
Läärä, (10) concerning lotteries, betting and gaming machines respectively.
21. I would first point out that the main proceedings are in fact the result of an action of declarator brought by a number of Portuguese companies against the Portuguese Government to challenge domestic legislation on the monopoly on activities concerning the operation of games of chance, which prevents them from freely pursuing such activities in the national territory. It is therefore not disputed that the parties to the main action have not relied on any fundamental freedom guaranteed by the Treaty and that all of the facts in that case are confined to the national territory of a single Member State. Consequently, this appears clearly to be the kind of strictly domestic situation in which, according to the settled case-law of the Court of Justice, it is not possible to rely on the provisions of the Treaty on fundamental freedoms.
22. According to that case-law,
" Articles 48, 52 and 59 of the Treaty [on freedom of movement for workers, the right of establishment and the freedom to provide services] cannot be applied to actions which are confined in all respects within a single Member State" . (11) That principle, specifically reiterated
inter alia
in other cases in which the compatibility of national provisions establishing a State monopoly on the operation of games of chance was at issue, (12) clearly reflects the rationale of the system. In other words, as the Court itself has explained, the provisions of the Treaty on fundamental freedoms may be relied upon by the citizens of a Member State to challenge the legislation of that State only in order to demonstrate that the legislation in question does not enable them fully to avail themselves of the rights of free movement they are guaranteed under Community law. (13)
23. That consistent case-law is not called into question in this case. At issue is whether, given that what is involved here is a strictly domestic situation, the Court should refrain, as it has done on many previous occasions, from ruling on the merits of the questions referred, since the Treaty provisions on fundamental freedoms cannot be applied in such circumstances; (14) or whether, as on a number of other occasions previously, (15) it may also in fact consider the merits of the questions by providing a theoretical assessment of the compatibility with Community law of national rules of the type in question here.
24. I would first point out that the uncertainties to which the divergent case-law may initially have given rise seem to me now to have been resolved by the most recent decisions of the Court which, particularly since the judgment in
Guimont, evince a clear trend towards the second approach since, in
Guimont, the Court confirmed its authority to provide an answer on the merits of the questions referred even in relation to strictly domestic situations. (16)
25. In particular, the Court, ruling on the interpretation of Article 28 EC in relation to a national measure on labelling requirements for certain cheeses, specifically pointed
out in
Guimont
that:
" in principle it is for the national courts alone to determine, having regard to the particular features of each case, both the need for a preliminary ruling in order to enable them to give their judgment and the relevance of the questions which they refer to the Court. A reference for a preliminary ruling from a national court may be rejected only if it is quite obvious that the interpretation of Community law sought by that court bears no relation to the actual nature of the case or the subject-matter of the main action." (17) On that basis, the Court then held that, although this was a strictly domestic situation,
" in this case, it is not obvious that the interpretation of Community law requested is not necessary for the national court_"
given that
" such a reply might be useful to it if its national law were to require, in proceedings such as those in this case, that a national producer must be allowed to enjoy the same rights as those which a producer of another Member State would derive from Community law in the same situation." (18)
26. That approach was, moreover, confirmed in the later judgment in
Reisch, in which the Court was called upon to interpret the provisions of the Treaty on the free movement of capital with reference to national legislation prohibiting the use of certain land for the construction of holiday homes.
27. In that judgment, after stating that
" it is apparent from the documents in the case-file, and it is not, moreover, in dispute, that all the facts in the main proceedings are confined to a single Member State"
and that national legislation such as that at issue could
" generally fall within the scope of the provisions on the fundamental freedoms established by the Treaty only to the extent that it applies to situations linked to intra-Community trade", the Court reiterated that, for the reasons set out in
Guimont,
" that finding does not mean that there is no need to reply to the questions referred" . (19)
28. It thus seems to me that although the abovementioned approach set out in the case-law may give rise to doubts, (20) we cannot depart from it in this case and, consequently, the objection raised by the Portuguese and Belgian Governments must be rejected. I therefore consider that in this case the Court must consider the merits of the questions referred by the Vara Cível.
The admissibility of a question concerning the
" validity"
of national law
29. In the alternative, the Portuguese Government objects that the order for reference essentially constitutes an abuse of procedure and is therefore inadmissible in its entirety. The Portuguese Government claims that the action by Anomar is merely a pretext for obtaining from the Court a ruling on the compatibility of Portuguese legislation with the principles and rules of the Community legal order. However, as the Court has itself often pointed out, in proceedings for a preliminary ruling, it cannot give a ruling on matters of that nature because that procedure cannot replace actions under Article 226 EC for failure to fulfil obligations.
30. However, I do not consider that argument to be well founded as it is based on a partial and incomplete reading of the Court ' s case-law.
31. It is true that the Court has on several occasions stated that, in the context of proceedings for a preliminary ruling
" the Court may not rule on the compatibility of the provisions of a national law with the Treaty" ; but it has always gone on to say that
" it has jurisdiction to provide the national court with all the criteria of interpretation relating to Community law which may enable it to assess such compatibility." (21)
32. Consequently, in this case also, were the Court to decide to give a ruling on the merits of the questions referred by the Vara Cível, it could not, of course, rule on the validity of the national law, but it could provide the requested interpretation of Community law, leaving it to the national court to apply it in the specific case, including, possibly, by setting aside any provisions of national law which might prove incompatible with the Treaty.
Other aspects of inadmissibility
33. Finally, according to the Portuguese Government, some of the questions submitted to the Court ─ in particular the 8th, 9th, 11th, 12th and 13th questions ─ are imprecise, abstract and hypothetical, so that an answer from the Court is not in any event required to contribute to the administration of justice in the Member States.
34. Unlike the objections I analysed earlier, those objections are not all-encompassing, inasmuch as they do not call into question the order for reference as a whole, but actually concern the admissibility of individual questions. I shall therefore assess them as I review the substance of those questions.
B ─ Substance
The first question
35. By its first question, the national court is asking whether the commercial operation of games of chance must be categorised as an economic activity within the meaning of Article 2 EC.
36. I note that all the parties which have submitted observations on this matter concur in answering that question in the affirmative, citing the view the Court took in
Läärä (22) and
Schindler . (23)
37.
In Schindler
in particular, with specific reference to lotteries, but in an analysis applicable to any type of game of chance, the Court made clear that neither the element of chance which characterises such games nor their recreational aspect prevent them having an economic nature. Games of chance in fact
" give the players, if not always a win, at least the hope of a win, but also yields a gain for the operator"
and therefore automatically constitutes an economic activity; nor is it deprived of its economic character because
" in many Member States the law provides that the profits made by a lottery may be used only for certain purposes, in particular the public interest, or may even be required to be paid into the State budget." (24)
38. There is no need to depart from that analysis in this case. Accordingly, I too take the view that the first question must be answered to the effect that the commercial operation of games of chance constitutes an economic activity within the meaning of Article 2 EC.
Second and third questions
39. By its second and third questions, the national court is asking whether the operation of games of chance is an activity relating to
" goods"
within the meaning of Article 28 EC, and whether activities relating to the manufacture, importation and distribution of gaming machines are separate from the commercial operation of such machines and, therefore, whether the free movement of goods embraces such activities.
40. The claimants in the main action claim first and foremost that the operation of games of chance is without a doubt an activity relating to goods. They thus conclude, although without explaining clearly the relationship between the machines and the activity of operating the games, that Article 28 et seq. EC should apply in this case. That said, they point out that by preventing the import of gaming machines lawfully manufactured in other Member States, the Portuguese legislation on games of chance constitutes a
" trading rule [of a Member State] capable of hindering, directly or indirectly, actually or potentially, intra-Community trade"
and is consequently prohibited by Article 28 EC. (25) That restriction is not justified by reasons of public interest or, at least, is disproportionate; in particular, the protection of public morality or security cannot in any way justify that a ban on the marketing of gaming machines by an individual not authorised to do so should result in criminal prosecution.
41. According to the Portuguese, German and Belgian Governments, however, the determining fact is that, for the purposes of applying the national rules in question, the activities relating to the production and marketing of gaming machines are not in themselves of significance but are taken into consideration solely in so far as they are accessories to the commercial operation of games of chance. Accordingly, it is not Community provisions on the free movement of goods which apply in that context but the provisions relating to services, to which the main activity relates.
42. The Spanish Government and, essentially, the Finnish Government take the view that the question cannot be resolved once and for all, but requires that the various types of game be considered.
Where games of chance are played using a machine, the provisions on the movement of goods undoubtedly apply, regardless of the fact that the goods (gaming machines) are an accessory to the provision of a service (game of chance). That said, those governments do not state their position on the restrictive effects of the Portuguese legislation at issue, although they make it clear that where such effects occur, they must be considered justified by the need to protect public morality and, more generally, protect society, as well as by fiscal requirements.
43. The Commission, for its part, endorses the arguments of the Spanish and Finnish Governments, but considers that it is not possible to assess the effect of Article 28 et seq. on the dispute pending before the national court because that court has failed to provide any relevant data.
44. In analysing the views submitted, I should first point out that, according to the settled case-law of the Court,
" goods"
means
" products which can be valued in money and which are capable, as such, of forming the substance of commercial transactions" . (26)
45. That said, it is not possible ─ as correctly stated by the Spanish and Finnish Governments ─ generally to ascertain whether or not games of chance constitute an activity relating to
" goods", as it is necessary for that purpose to make a distinction according to whether or not they are played using assets which can be valued in money and are capable of forming the subject of commercial transactions.
46. There seems to me to be no doubt that gaming machines fulfil the conditions I have stated above and must therefore be deemed to be goods within the meaning of the Treaty. Accordingly, I consider that national measures which may influence intra-Community trade in gaming machines must in principle be assessed in the light of Article 28 EC.
47. That view cannot, moreover, be challenged on the ground that gaming machines are an accessory to an activity relating to the provision of services, since, as the Court has already had occasion to specify in
Läärä,
" it is true that such machines are intended to be made available to the public for use in return for payment" .
" However ... the fact that an imported item is intended for the supply of a service does not in itself mean that it falls outside the rules regarding freedom of movement"
of goods. (27)
48. It follows that the second and third questions must be answered generally to the effect that national measures which may influence intra-Community trade in gaming machines must in principle be assessed in light of Article 28 EC.
49. However, the real issue raised, albeit not expressly, by the questions referred ─ and yet to be resolved in this case ─ is whether the national legislation at issue is compatible with Article 28 EC.
50. In that connection, I must stress that in this case the order for reference provides no information to help clarify the legal arrangements to which the importation and marketing of gaming machines are subject under Portuguese law. The only piece of legal data proffered is the requirement that anyone wishing to market gaming machines must obtain authorisation from the Inspectorate-General for Gaming and Betting. But there is no mention of the conditions to which that authorisation is subject or the nature of the powers of the Inspectorate-General and, in particular, there is no indication of whether or not the latter enjoys a power of assessment.
51. In those circumstances, it does not appear to me that the Court has enough information to ascertain the extent to which intra-Community trade in goods may be impeded by the Portuguese rules ─ far less to analyse the need for and proportionality of those rules. In the light of the above elements, I do not therefore believe that the proper procedural conditions have been met, having regard to the purpose of the proceedings and the conditions expressly laid down by Article 20 of the Protocol on the Statute of the Court of Justice.
52. It must be recalled that the Court has on several occasions held that:
" in order to reach an interpretation of Community law which will be of use to the national court, it is essential that the national court define the factual and legislative context of the questions it is asking or, at the very least, explain the factual circumstances on which the questions are based ...
The information provided ... in orders for reference must not only be such as to enable the Court usefully to reply but must also make it possible for the governments of the Member States and other interested parties to submit observations pursuant to Article 20 of the EC Statute of the Court of Justice.
" (28)
53. In this case therefore, in the absence of adequate information on the conditions to which the marketing and importation of gaming machines are subject under Portuguese law, the Court is not able to give a ruling on whether Article 28 EC is a bar to the application of the national legislation at issue.
The fourth question
54. By its fourth question the national court is seeking to establish whether or not, by creating special and exclusive rights, legislation like the Portuguese legislation regulating the activity of commercially operating and engaging in games of chance falls within the scope of Article 31 EC on commercial monopolies.
55. According to the claimants in the main action, the aim of Article 31 EC is to secure full implementation of the free movement of goods. However, since, in their view, the Portuguese rules on games of chance actually constitute an obstacle to that freedom, they conclude that the effectiveness of Article 31 EC can be ensured only if the concept of
" body
through which a Member State ... supervises, determines or ... influences imports or exports between Member States"
is given a wide interpretation, encompassing all public services and commercial activities, whether in the public or the private sector.
56. The governments which have intervened point out that Article 31 EC applies exclusively to commercial monopolies and not monopolies which relate to the activity of providing services. They essentially claim that, by providing for special and exclusive rights to exploit games of chance, the Portuguese legislation does not create a commercial monopoly but merely regulates an activity involving the provision of services within the meaning of Article 49 et seq. EC. In the view of those governments, the conclusion must therefore be that Article 31 EC does not apply in the present case.
57. Although in principle sharing that view, the Commission further contends that a State monopoly relating to the provision of services could have an indirect influence on the trade in goods between the Member States, as the Court pointed out in its judgment in
Gervais .
(29) Moreover, the Commission goes on to state that it is for the national court to assess whether the operation of the monopoly relating to services at issue in practice has the effect of creating a discriminatory commercial monopoly contrary to Article 31 EC.
58. I must endorse the Commission ' s observations on this.
59. Indeed, the Court has previously held that a monopoly relating to services is in principle excluded from the scope of Article 31 EC, (30) even though it then acknowledged that a monopoly of that nature can at any rate have an indirect influence on the trade in goods between the Member States and thus become a commercial monopoly within the meaning of Article 31. (31)
60. I must, however, point out that, as I have already stated in relation to the second and third questions (point 49 et seq. above), the national court has not furnished the Court of Justice with the information it needs to assess the impact the Portuguese rules on games of chance may have on the movement of goods. Consequently, the Court has not been put in a position properly to resolve the issue raised in the fourth question.
61. I therefore conclude that, in the absence of adequate information on the conditions to which Portuguese law subjects the marketing and importation of gaming machines, the Court is unable to answer the question whether Article 31 EC is a bar to the application of the national legislation at issue.
The 5th, 6th, 7th, 9th and 10th questions
62. By its 5th, 6th, 7th, 9th and 10th questions, the national court is essentially asking whether national rules like the Portuguese rules which limit the commercial operation of games of chance, including gaming machines, to casinos situated in certain areas stipulated by law, constitute an obstacle to the freedom to provide services and whether, if the answer is in the affirmative, that restriction may, none the less, be considered to be legitimate on the grounds that it is justified for reasons of public interest, applies without discrimination and is proportionate.
63. All the interveners agree that the commercial operation of gaming machines may constitute an activity relating to the provision of services within the meaning of the Treaty. By the same token, none of the interveners questions the fact that, although it applies without discrimination, legislation like that at issue may constitute a restriction to the freedom to provide services. However, views differ when it comes to establishing whether or not that restriction is justified.
64. On the one hand, the claimants in the main action point out that the exemptions to the freedom to provide services laid down under Article 49 EC must be interpreted strictly. Moreover, if the exemptions are applied, the Member State concerned has to prove that they are necessary and proportionate, but Portugal has not furnished that proof. Indeed, given the radical nature of the prohibition laid down by the national legislation in question, the Portuguese State has failed to provide any convincing argument regarding the proportionality of the measure. The fact that games of chance are permitted inside casinos, where the stakes are known to be high, whereas the commercial operation of such machines by private individuals is not permitted, even though the machines take smaller bets, demonstrates that, even assuming that it may be justified for reasons of public interest, the Portuguese legislation fails to observe the principle of proportionality.
65. The intervening governments and the Commission contend, on the other hand, that legislation like the Portuguese legislation is justified for reasons of public interest such as the protection of consumers and public morality, the prevention of crime and fraud and the financing of activities in the public interest. Moreover, given that the Portuguese legislation is largely identical to that of Finland and that the Court has already had occasion to rule on the Finnish legislation in
Läärä, it is also clear that the Portuguese legislation, like the Finnish legislation analysed in
Läärä, observes the principle of proportionality.
66. For my part I would first point out that, as the Court has previously explained,
" the provisions of the Treaty relating to freedom to provide services apply to activities which enable users, in return for payment, to participate in gaming." (32)
67. However, like all the interveners, I recognise that, by restricting the opportunities for operators from other Member States to operate games of chance in Portuguese territory, the legislation in question may constitute an obstacle to the freedom to provide services. But I also believe, as the intervening governments and the Commission have pointed out, that such rules may be justified for reasons of public interest, such as the protection of consumers and public morality, the prevention of crime and fraud and the financing of activities in the public interest.
68. In point of fact, as the Portuguese Government noted in its observations, the legislation in question reflects in particular the aim of limiting exploitation of the passion for gaming and averting the risks of crime and fraud that result from such activities.
69. As the Court recognised in paragraph 58 of
Schindler
and paragraph 33 of
Läärä, those reasons, which must be taken together,
" concern the protection of the recipients of the service and, more generally, of consumers, as well as the maintenance of order in society."
Consequently, measures which, although constituting an obstacle to the freedom to provide services, are
" based on such grounds [as to] guarantee the achievement of the intended aims and do not go beyond that which is necessary in order to achieve them"
must invariably be deemed compatible with the Treaty.
70. The judgment in
Läärä
therefore provides arguments that support a positive assessment of whether the Portuguese legislation meets the conditions of necessity and proportionality, since, for the purposes of this case, the Finnish legislation at issue in
Läärä
and the Portuguese legislation at issue here are largely identical.
71.
In Läärä, the Court followed the approach already apparent from the judgment in
Schindler
and substantially relaxed the principle of proportionality which normally applies to implementation of the provisions of the freedom to provide services, ruling that the power to determine the extent of the protection to be afforded by a Member State on its national territory with regard to lotteries and other forms of gambling
" forms part of the national authorities ' power of assessment, recognised by the Court ... . It is for those authorities to assess whether it is necessary, in the context of the aim pursued, totally or partially to prohibit activities of that kind or merely to restrict them and, to that end, to establish control mechanisms, which may be more or less strict." (33) However, the Court adds:
" limited authorisation of such games on an exclusive basis, which has the advantage of confining the desire to gamble and the exploitation of gambling within controlled channels, of preventing the risk of fraud or crime in the context of such exploitation, and of using the resulting profits for public interest purposes, likewise falls within the ambit of those objectives." (34)
72. I therefore propose answering the fifth, sixth, seventh, ninth and tenth questions to the effect that legislation, like the Portuguese legislation, which restricts the commercial operation of games of chance, including gaming machines, to casinos situated in certain areas stipulated by law, although constituting an obstacle to the freedom to provide services, is justified by public interest requirements and is not disproportionate in relation to those requirements.
The eighth question
73. By its eighth question, the national court is essentially asking whether the Member States are free to regulate the operation of games of chance, including by placing restrictions on such activities, or whether a regulatory measure by a Member State must be excluded as being contrary to a so-called principle of economic freedom, particularly if other Member States have laid down less restrictive rules.
74. The claimants in the main action point out that the rules that apply in other Member States, such as Spain, the United Kingdom, Germany and Ireland, are more liberal than the Portuguese rules. They further contend that the more restrictive character of the Portuguese rules, as compared with those of the abovementioned Member States, and the lack of valid justification for a stricter approach, mean that the rules at issue are
" invalid"
or
" inappropriate" .
75. Portugal, for its part, objects, first, that the question is inadmissible, since it is imprecise, general and merely hypothetical. On the substance, it goes on to say, supported by the Commission and the intervening Member States, that every Member State has the power to determine the level of protection for society against dangers linked to games of chance, at least in the absence of harmonised Community rules.
76. I would point out that, even setting aside the objection of inadmissibility raised by the Portuguese Government, the answer to the question clearly flows from the Court ' s case-law on this matter.
77.
In Läärä, the Court, as well as recognising, as I have already pointed out, that the Member States enjoy a large power of assessment in regulating games of chance, ruled that
" the mere fact that a Member State has opted for a system of protection which differs from that adopted by another Member State cannot affect the assessment"
of the compatibility of such measures with the Treaty. (35)
78. It therefore seems clear to me that, far from resulting in the
" invalidity"
of national legislation which places stricter limits on the operation of gaming, the differences which exist between the national legislations derive from the power of assessment which the Court itself has accorded the Member States in this area.
79. I therefore suggest that the eighth question be answered to the effect that the power of assessment a Member State enjoys in regulating games of chance is not circumscribed by the fact that other Member States may have regulated this field differently.
The 11th, 12th and 13th questions
80. By its 11th, 12th and 13th questions, the national court is essentially asking whether the fact that the Portuguese legislation uses rather general terms to define its scope means that the administrative authorities responsible for ensuring compliance with that legislation enjoy a margin of assessment (12th question), infringe
" the usual legal interpretation"
(11th question) or infringe
" any principle or rule of Community law"
(13th question).
81. After citing a range of examples designed to illustrate the imprecise nature of the terms the Portuguese legislation uses, the claimants in the main action claim that the competent administrative authorities enjoy a very broad, not to say arbitrary, margin of assessment, and submit that conferring such power on those authorities is contrary to Community law and, in particular, the free movement of goods, the freedom of establishment and consumer protection.
82. The Commission and the Portuguese Government consider the abovementioned questions to be plainly inadmissible, in so far as they relate exclusively to the interpretation of concepts of Portuguese law. They are also inadmissible because they are entirely imprecise, and there is absolutely no indication of which rules of Community law the Court is to interpret.
83. As regards substance, the Portuguese Government points out that the Court has already ruled, albeit indirectly, on this issue, when, in its judgment in
Zenatti, it explained that
" determination of the scope of the protection which a Member State intends providing in its territory in relation to lotteries and other forms of gaming falls within the margin of appreciation which the Court ... recognised as being enjoyed by the national authorities" . (36) In the view of the Portuguese Government (with which the Spanish, Belgian and Finnish Governments largely concur) the margin of appreciation recognised by the Court on that occasion is not confined to selecting the regulatory measures; it also includes determining the activities embraced by the concept of games of chance.
84. I must begin by endorsing the objections raised in relation to the admissibility of the questions at issue on the ground that they are obscure and imprecise.
However, I also agree with those objections in so far as the questions concern the interpretation of concepts of national law. It is settled case-law that
" under the system of judicial cooperation established by Article 177 of the Treaty, the interpretation of national rules is a matter for the national courts and not for the Court of Justice" . (37)
85. I therefore suggest declaring the 11th, 12th and 13th questions inadmissible, both because they are merely intended to obtain from the Court an interpretation of Portuguese law (11th and 12th questions) and because the reference to
" any principle or rule of Community law"
(13th question) is altogether unclear.
V ─ Conclusion
86. On the basis of all the foregoing, I propose that the Court give the following answers to the questions referred by the Vara Cível by order of 18 December 2000:
(1) The operation of games of chance constitutes an economic activity within the meaning of Article 2 EC.
(2) National measures which may influence intra-Community trade in gaming machines must, in principle, be assessed in the light of Article 28 EC.
(3) In the absence of adequate information on the conditions to which the marketing and importation of gaming machines are subject under Portuguese law, the Court is not able to give a ruling on whether Article 28 EC is a bar to the application of the national legislation at issue.
(4) In the absence of adequate information on the conditions to which the marketing and importation of gaming machines are subject under Portuguese law, the Court is not able to give a ruling on whether Article 31 EC is a bar to the application of the national legislation at issue.
(5) Legislation, like the Portuguese legislation, which restricts the commercial operation of games of chance, including gaming machines, to casinos situated in certain areas stipulated by law, although constituting an obstacle to the freedom to provide services, is justified by public-interest requirements and is not disproportionate to those requirements.
(6) The power of assessment a Member State enjoys in regulating games of chance is not circumscribed by the fact that other Member States may have regulated this field differently.
(7) Both because they are intended to obtain an interpretation of national rules and because of their imprecise nature, the 11th, 12th and 13th questions are inadmissible.
(1) .
(2) As amended by Decree-Law No 10/95 of 19 January 1995, in
Diário da República
I series A, No 16 of 19 January 1995, p. 284.
(3) Sic.
I should, however, point out that the Decree in question contains only 167 articles, and that it is not possible to identify the provision which the national court wishes to cite from either the order for reference or elsewhere in the file.
(4) Sic.
I must, however, point out that Article 162, which is not mentioned elsewhere in the order for reference, refers neither to games of chance nor to amusement machines, but to a different category of games, games of skill, which are not relevant to these proceedings.
(5) Case 76/81
Transporoute
[1982] ECR 417.
(6) Case 20/87
Gauchard
[1987] ECR 4879.
(7) Case C-41/90
Höfner and Elser
[1991] ECR I-1979, paragraph 39, and Case C-70/95
Sodemare
[1997] ECR I-3395, paragraph 39.
(8) Case C-275/92
Schindler
[1994] ECR I-1039, paragraph 29.
(9) Case C-67/98
Zenatti
[1999] ECR I-7289.
(10) Case C-124/97
Läärä
[1999] ECR I-6067.
(11) Case C-134/95
USSL No 47 di Biella
[1997] ECR I-195, paragraph 19. To the same effect, see, among many, Case 286/81
Oosthoek ' s Uitgeversmaatschappij
[1982] ECR 4575, paragraph 9, Case 20/87
Gauchard, cited above, paragraph 12, Case C-41/90
Höfner and Elser, cited above, paragraph 37, Case C-332/90
Steen
[1992] ECR I-341, paragraph 9, Joined Cases C-29/94 to C-35/94
Aubertin and Others
[1995] ECR I-301, paragraph 9, Case C-108/98
RI.SAN.
[1999] ECR I-5219, paragraph 23, and Case C-97/98
Jägerskiöld
[1999] ECR I-7319, paragraph 42.
(12) See, in particular, Case C-67/98 (cited in footnote 9 above), paragraph 24, and
Läärä
(cited in footnote 10 above), paragraph 27, in which the Court held that
" such activities fall within the scope of Article 59 of the [EC] Treaty (now, after amendment, Article 49 EC),
since at least one of the service providers is established in a Member State other than that in which the service is offered ."
(My emphasis).
(13) Case C-60/00
Carpenter
[2002] ECR I-6279, paragraph 30.
(14) See, in particular, Case 20/87 (cited in footnote 6 above), Case C-41/90 (cited in footnote 7 above), Case C-332/90, Joined Cases C-29/94 to C-35/94, Case C-134/95, Case C-108/98 and Case C-97/98 (all cited in footnote 11 above).
(15) See, in particular, Case 298/87
Smanor
[1988] ECR 4489 and Joined Cases C-321/94 to C-324/94
Pistre
[1997] ECR I-2343.
(16) See Case C-448/98
Guimont
[2000] ECR I- 10663. Subsequently, Case C-379/98
PreussenElektra
[2001] ECR I-2099, Joined Cases C-515/99, C-519/99 to C-524/99 and C-526/99 to C-540/99
Reisch
[2002] ECR I-2157. On a conceptually related matter, see most recently, Case C-306/99
BIAO
[2003] ECR I-1, paragraphs 88 et seq.
(17) Guimont, op. cit., paragraph 22.
(18) Guimont, op. cit., paragraph 23.
(19) Reisch, paragraphs 24 to 26.
(20) See, in particular, the Opinion of Advocate General Saggio in
Guimont, point 7; previously, see the criticism of that approach in the Opinion of Advocate General Jacobs in Cases C-28/95 and C-130/95
Leur-Bloem
and
Giloy
[1997] ECR I-4161, paragraphs 73 and 75.
(21) See, among many, Case 172/82
Inter-Huiles
[1983] ECR 555, paragraph 8; Case 188/86
Lefèvre
[1987] ECR 2963, paragraph 6; Case 204/87
Bekaert
[1988] ECR 2029, paragraph 5.
(22) Case C-124/97 (cited in footnote 10 above), paragraph 17 et seq.; see also paragraph 8 et seq. of the Opinion of Advocate General La Pergola.
(23) Case C-275/92 (cited in footnote 8 above), paragraphs 19 to 37.
(24) Schindler, paragraphs 34 and 35.
(25) Case 8/74
Dassonville
[1974] ECR 837, paragraph 5 in particular.
(26) Case 7/68
Commission
v
Italy
[1968] ECR 423, paragraph 1.
(27) Case C-124/97 (cited in footnote 10 above), paragraph 24.
(28) See, most recently, the order of the Court of Justice of 2 March 1999 in Case C-422/98
Colonia Versicherung
[1999] ECR I-1279, paragraphs 4 and 5. Previously, see Joined Cases C-320/90 to C-322/90
Telemarsicabruzzo and Others
[1993] ECR I-393, paragraph 6.
(29) Case C-17/94 [1995] ECR I-4353, paragraph 36.
(30) Case 155/73
Sacchi
[1974] ECR 409, paragraph 10.
(31) Case C-17/94 (cited in footnote 29 above), paragraphs 36 and 37.
(32) Case C-67/98 (cited in footnote 9 above), paragraph 24 and Case C-124/97 (cited in footnote 10 above), paragraph 27.
(33) Case C-124/97 (cited in footnote 10 above), paragraph 35.
(34) Op. cit., paragraph 37.
(35) Op. cit., paragraph 36.
(36) Case C-67/98 (cited in footnote 9 above), paragraph 33.
(37) See by way of illustration of all the case-law, Case C-37/92
Vanacker and Lesage
[1993] ECR I-4947, paragraph 7.