Source: http://eulawanalysis.blogspot.co.uk/2014/09/is-new-council-of-europe-treaty-on.html
Timestamp: 2018-04-20 10:20:57
Document Index: 567137051

Matched Legal Cases: ['CJEU ', 'Art 165', 'CJEU ', 'CJEU ', 'Art 18', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ']

EU Law Analysis: Is the new Council of Europe treaty on match-fixing compatible with EU internal market law?
Is the new Council of Europe treaty on match-fixing compatible with EU internal market law?
Tom Serby, Senior Lecturer in Law, Anglia Law School, Anglia Ruskin University
There is a growing epidemic of betting related match fixing in sport. To address it, the Council of Europe recently opened for signature a Convention on the Manipulation of Sports Competitions. However, Malta has asked the CJEU to rule on whether this treaty offends against the rules of the internal market, specifically freedom to provide services. This legal challenge highlights the difficulty in obtaining international agreement on how best to fight the match fixing.
The first 15 countries, including Russia and Germany, as well as six other EU Member States (Bulgaria, Denmark, Finland, Greece, Lithuania and Netherlands) signed up to the Convention as soon as it was open for signature, on September 18th 2014; Malta’s is a lone voice in opposition. UEFA and the IOC (the Olympic movement) back the Convention but the associations of regulated European bookmakers are more guarded, sharing some of Malta’s concerns.
Match fixing, which the Convention addresses, has moved up the agenda for sports governing bodies, national governments and the the European Commission (which has funded various studies into it), in the wake of the scandals over the last decade which have affected in particular, but not only, the sports of football and cricket.
The growth in betting related match fixing, (or “spot fixing” where an event within a match is fixed rather than the overall result), is well known to anyone with only a passing interest in sport. The rise in this corrupt “manipulation” of sport, where athletes take bribes to underperform in order to facilitate winning on betting, has been fuelled by the huge rise in both licensed and unlicensed online gambling. INTERPOL investigations have proved that much of the fixing is at the behest of international (particularly from Asia where betting is often illegal) criminal gangs and is used for Money laundering purposes. The infamous Calcioscommesse football scandal for instance, was financed out of Singapore, the corruptors acted in Italy, bets were placed all over Asia, and money proceeds were laundered through Panama.
Manipulation or fixing is very difficult to detect, and thus to prevent, as it crosses jurisdictions and is largely the result of online activity. Sports governing bodies have acknowledged that, while they have a role to play by tightening up their Codes of Ethics and Disciplinary procedures and introducing Integrity Units to investigate any suspected malpractice by athletes, they cannot on their own eradicate the problem without governmental support.
Under the Lisbon Treaty and TFEU Art 165 the EU has a role in promoting sport which specifically falls short of law harmonization. Under what has become known as the doctrine of the “specificity” of sport the CJEU will only interfere in the internal rules and regulations laid down by sporting federations in so much as they have an economic impact. So famously, in the Bosman ruling, the Court ruled as unlawful (under the internal market freedom of movement provisions) UEFA’s then transfer rules which restricted, on the basis of a player’s nationality, football clubs signing players from other EU Member States.
Malta’s complaint in regard of the Convention is brought under Article 218 TFEU, which is a special jurisdiction allowing the CJEU to rule if an envisaged treaty (ie not in force for the EU yet) is compatible with EU law or not. The object of the Convention is to establish international cooperation in terms of defining unlawful manipulation of sports competitions (ie corrupt betting related fixing) and in the investigation and prevention of fixing.
A key provision of the Convention is at Article 3 (5)(a) which defines "illegal sports betting" as "all sports betting activity whose type or operator is not allowed under the applicable law of the jurisdiction where the consumer is located". The Convention prescribes at Article 11 website blocking and a ban on advertising to enforce the restriction on illegal betting. In other words, a betting operator licensed in say Malta, could be prohibited from going about its business in another EU state, say Poland, if Polish law proscribes some of the betting methods which in Malta are perfectly legal; thereby constituting a classic impediment to an internal market.
In Poland gambling is legal, and indeed is a source of important public revenue being relatively highly taxed; however, unusually for the EU, online gambling is illegal. In practice blocking of foreign websites is not enforced and many Poles therefore work round this restriction on online gambling.
In Malta, on the other hand, betting operators are highly prized as economic entities and both regulation and tax are very light on betting companies in order to stimulate an important part of the economy for this, the smallest EU member state. Not unreasonably the Maltese argue that the Convention exceeds the ambit of EU competence by introducing regulations on gambling which is not a settled matter in the EU. Moreover, Malta will argue that any unduly restrictive provisions which drive gamblers into the unregulated market are counter-productive, since it is widely acknowledged that it is the unregulated betting market that is the source of much of the match fixing problem.
Malta’s case is that the definition of “illegal betting” is discriminatory under TFEU Art 18, and unlawful under articles 49 (freedom of establishment) and article 56 (freedom to provide services); and it is expected that Malta will argue before the Court that while they accept that the regulation on illegal gambling is in pursuit of a justifiable public policy aim (the eradication of match fixing), attacking gambling which is licensed in one EU State but not another, is not a proportionate means of achieving the aim given the evidence that unlicensed as opposed to licensed gambling is primarily the source of match fixing.
The complex and voluminous case law on the Court of Justice on this issue (most recently reiterated in Pfleger) makes clear that Member States have a great deal of discretion to regulate gambling. However, that discretion is not unlimited, and there are circumstances in which gambling regulation can constitute a disproportionate restriction of internal market rights.
There are two possible outcomes of this litigation. First of all, if the CJEU rules that the relevant rules in the Convention are incompatible with EU internal market law, neither the EU nor the Member States will be able to ratify it. Secondly, if the Court rules that there is no breach of internal market law, it will probably indicate in detail how to interpret the relevant provisions of the Convention in order to ensure compatibility with EU law. In that case, the opinion of the CJEU will of course inform the manner in which the Convention is implemented in Member States.
As the Convention is the first multinational treaty aimed at harmonizing different states’ fight against betting related sports corruption, the Court’s ruling is eagerly anticipated. Watch this space……
Barnard & Peers: chapter 14, chapter 16, chapter 24
Labels: betting, Council of Europe, free movement of services, gambling, internal market, Malta, match-fixing
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