Source: https://www.setthings.com/en/relevant-case-law-for-gambling-in-eu/
Timestamp: 2019-11-19 21:12:34
Document Index: 116972070

Matched Legal Cases: ['Art. 50', 'Art. 49', 'Art. 46', 'Art. 49', 'Art. 49', 'Art. 28', 'art. 43']

Relevant Case Law for Gambling in EU - SetThings
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In the context of gambling activities, the criteria both of justification and proportionality have been fixed more precisely in a number of ECJ judgements concerning national statutory restrictions on gambling.
This subchapter briefly illustrates in which context the categories of grounds for justification and the criteria for the proportionality analysis, enumerated and resumed below under C and basic elements of the entire study, have been laid down by the ECJ.
1. ECJ Schindler, C- 275/92, 24.3.1994
Problem and Restrictions
The case concerned the importation of lottery advertisements/ tickets into the UK with a view to the participation of its residents in a German lottery. The UK gaming provisions wholly precluded operators from other Member States from promoting their lotteries and selling tickets in the market of the United Kingdom.
Key conclusions of the ECJ
1. The importation of lottery advertisements and tickets into a Member State with a view to the participation by residents of that State in a lottery operated in another Member State, relates to a “service” within the meaning of Art. 50 EC Treaty (ex-Article 6018) and accordingly falls within the scope of Article 49 EC Treaty (ex-Article 59).
2. National legislation which, like the United Kingdom’s legislation on lotteries, prohibits, subject to specified exceptions, the holding of lotteries in a Member State, is an obstacle to the freedom to provide services;
3. The EC Treaty provisions relating to freedom to provide services do not preclude legislation such as that of the United Kingdom on lotteries, in view of the concerns of social policy and of the prevention of fraud which justify the legislation.
Justifications19
National legislation, even if non-discriminatory, i.e. applicable irrespective of the nationality of the operator or agent falls within the ambit of Art. 49 EC Treaty (ex-Article 59) when it is liable to prohibit or otherwise impede the activities of a provider of services established in another Member State where he lawfully provides his services. Those obstacles set up by national measures can be justified by overriding public interest considerations if the measures are proportionate to the objectives pursued thereby.
National authorities enjoy a margin of latitude in determining the requirements for permission to offer (here) lottery services, taking into account the social and cultural features of individual Member States and the desire to maintain their social order. Interdictions would thus be justified for the following reasons:
– Protection of moral, religious and cultural standards20
– Prevention of private profit from the provision of gambling services21
– Social Policy / Prevention of fraud and other criminal activities, given the size of the amounts that can be staked and the possible winnings22
– Prevention of encouragement to spend excessive sums on gambling services, given the possible resulting problems for individuals and the social damages23
The court considered the national restriction in question to be a necessary part of the protection the Member State seeks to secure in its territory and thus as not disproportionate.
2. ECJ Läära, C 124-97, 21.9.1999
In this case, an unlicensed operator of gaming machines was accused of illegal gaming.
According to the Finnish legal provisions, the games of chance in question may be organised, with the authorisation of the administrative authorities, only for the purpose of collecting funds for charity or for another non-profit-making purpose provided for by law. Only one licence, valid for a specified period, may be issued to cover those activities. A person organising games of chance without the required license is subject to the imposition of a fine or a term of up to six months’ imprisonment.
The EC Treaty provisions relating to freedom to provide services do not preclude national legislation such as the Finnish legislation which grants exclusive rights to operate slot machines to a single public body, in view of the public interest objectives which justify it.
The court considers the following grounds as being a valid justification for national restrictions:
– Public policy, security and health (Art. 46, 55 EC Treaty)24
– Limiting the exploitation of the human passion for gambling, protection of the recipients of the services and more generally, of consumers 25
– Avoiding the risk of crime and fraud and authorisation of those activities only with a view to the collection of funds for charity or for other benevolent purposes, maintenance of order in society 26
Even if measures are based on acknowledged justification grounds they must guarantee the achievement of the intended aims and must not go beyond that which is necessary in order to achieve them.27 The ECJ made the following considerations:
– It is for the Member States to assess the level of protection which they intend to provide on their territories 28and can decide, in the context of the aim pursued, to totally or partially prohibit activities of that kind or to restrict them and to establish control mechanisms, which may be more or less strict. 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 need for, and proportionality of, provisions enacted to that end.29
– The court underlines that the fact that games are not totally prohibited does not in itself show that the national legislation is not intended to achieve the public interest objectives at which it is purportedly aimed, which must be considered as a whole. Limited authorisation on an exclusive basis, which has the advantages of confining the desire to gamble and the exploitation of gambling to 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, falls within the ambit of those objectives.30
– However, according to the court, the choice of the national measure must not be disproportionate to the aim pursued.31 Conferring exclusive rights on a single public body / public law association, the activities of which are carried on under the control of the State) instead of adopting regulations imposing the necessary code of conduct on private sector operators does not appear to be disproportionate.32 It is true that sums received by the State for public interest purposes from the sole licensee could equally be obtained by other means, such as taxation of the activities of various operators authorised to pursue them within the framework of rules of a non-exclusive nature; on the other hand, the obligation to pay out all the proceeds which is imposed on the licensed public body, constitutes a measure which, given the risk of crime and fraud, is certainly more effective in ensuring that strict limits are set to the lucrative nature of such activities. 33
3. ECJ Zenatti, C 67/ 98, 21.10.1999
The case concerned a prohibition imposed on an operator from acting as an intermediary in Italy for a company established in the United Kingdom specialising in the taking of bets on sporting events. The legislation at issue in this case does not totally prohibit the taking of bets but reserves to certain bodies the right to organise betting in certain circumstances.
The EC Treaty provisions on the freedom to provide services do not preclude national legislation, such as the Italian legislation, which reserves to certain bodies the right to take bets on sporting events if that legislation is in fact justified by social-policy objectives intended to limit the harmful effects of such activities and if the restrictions which it imposes are not disproportionate in relation to those objectives.
The objectives at issue concern the protection of consumers as well as the maintenance of order in society and have already been held to rank among those objectives which may be regarded as constituting overriding reasons relating to the public interest 34 . These objectives are the following35:
– Prevention of gaming from being a source of private profit
– Avoidance of risks of crime and fraud
– Prevention of the damaging individual and social consequences of the incitement to spend and to allow betting only to the extent to which it may be socially useful as being conducive to the proper conduct of competitive sports.
Measures based on above mentioned reasons must be suitable for securing attainment of the objectives pursued and not go beyond what is necessary to attain them. The ECJ expressly stated:
– The scope of the protection which a Member State intends providing (total or partial prohibition, restriction, controlling procedures) falls within the margin of appreciation of the authorities in the context of the aim pursued.36
– The mere fact that a Member State has chosen a system of protection different from that adopted by another Member State cannot affect the appraisal as to the need for and proportionality of the provisions adopted.37
– The fact that games are not totally prohibited is not enough to show that the national legislation is not in reality intended to achieve the public-interest objectives at which it is purportedly aimed,38 which must be considered as a whole.39
– Limited authorisation of gambling on the basis of special or exclusive rights granted or assigned to certain bodies, 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.40
– However such a limitation is acceptable only if it reflects a concern to bring about a genuine diminution in gambling opportunities and if the financing of social activities through a levy on the proceeds of authorised games constitutes only an incidental beneficial consequence and not the real justification for the restrictive policy adopted.41
– Even if the fact that lotteries and other games of chance may represent a means of financing charity or other general-interest activities cannot be neglected, such a fact cannot be considered per se as an objective justification for restrictions to freedom to provide services.42
– It is for the national court to verify whether, having regard to the specific rules governing its application, the national legislation is genuinely directed to realising the objectives which are capable of justifying it and whether the restrictions which it imposes do not appear disproportionate in the light of those objectives.43
4. ECJ Anomar, C-6/01, 11.9.2003
Under the controversial national provisions, the operation and playing of games of chance or combinations of games of chance and other forms of gaming outside duly authorised areas is deemed to be an offence punishable by a period of imprisonment.
The general principle underpinning the statutory scheme provides that `[t]he right to operate games of chance or gambling is reserved to the State’.
As the national court states in its order for reference, the Portuguese legislation does not discriminate between the nationals of various Member States. That legislation must therefore be regarded as applying without distinction. It is appropriate to inquire whether Art. 49 EC Treaty precludes legislation such as that in issue in the main proceedings which, although it does not discriminate on grounds of nationality, restricts the freedom to provide services.
1. Games of chance and gambling constitute economic activities within the meaning of Article 2 EC Treaty.
2. The activity of operating gaming machines must, irrespective of whether or not it is separable from activities relating to the manufacture, importation and distribution of such machines, be considered a service within the meaning of the EC Treaty and, accordingly, it cannot come within the scope of Articles 28 and 29 EC Treaty relating to the free movement of goods.
3. A monopoly in the operation of games of chance or gambling does not fall within the scope of Article 31 EC Treaty.
4. National legislation such as the Portuguese legislation which authorises the operation and playing of games of chance or gambling solely in casinos in permanent or temporary gaming areas created by decree-law and which is applicable without distinction to its own nationals and nationals of other Member States constitutes a barrier to the freedom to provide services. However, Articles 49 EC Treaty et seq. do not preclude such national legislation, in view of the concerns of social policy and the prevention of fraud which justify it.
5. The fact that there might exist, in other Member States, legislation laying down conditions for the operation and playing of games of chance or gambling which are less restrictive than those provided for by the Portuguese legislation, has no bearing on the compatibility of the latter with Community law.
6. In the context of legislation which is compatible with the EC Treaty, the choice of methods for organising and controlling the operation and playing of games of chance or gambling, such as the conclusion with the State of an administrative licensing contract or the restriction of the operation and playing of certain games to places duly licensed for that purpose, falls within the margin of discretion which the national authorities enjoy.
The Court refers to the following:
– Concerns of social policy and the prevention of fraud44
– Protection of consumers45, who are the recipients of the service, and the maintenance of order in society 46
– It is common ground that it is for national authorities to consider whether, in the context of the aim pursued, it is necessary to prohibit activities of that kind, totally or partially, or only to restrict them and to lay down more or less rigorous procedures for controlling them.47
– The mere fact that the operation and playing of games of chance or gambling are subject, in other Member States, to legislation which is less restrictive, cannot affect the appraisal as to the need for and proportionality of the provisions adopted.
They must be assessed solely in the light of the objectives pursued by the national authorities of the Member State concerned and of the level of protection which they seek to ensure.48
– The choice of methods for organising and controlling the operation and playing of games of chance or gambling, such as the conclusion with the State of an administrative licensing contract or the restriction of the operation and playing of certain games to places duly licensed for that purpose, falls within the margin of discretion which the national authorities enjoy.49 They define the objectives which they intend to protect, determine the means which they consider most suited to achieve them and establish rules for the operation and playing of games, which may be more or less strict and which have been deemed compatible with the EC Treaty.50
5. ECJ Gambelli, C-243/01, 6.11.2003
An organisation of Italian agencies was accused of having illegally collaborated with a foreign bookmaker in the activity of collecting bets which was normally reserved by law to the State and thus considered incompatible with the national monopoly on sporting bets.
National legislation which prohibits, on pain of criminal penalties, the pursuit of the activities of collecting, taking, booking and forwarding offers of bets, in particular bets on sporting events, without a licence or authorisation from the Member State concerned, constitutes a restriction on the freedom of establishment and on the freedom to provide services provided for in Articles 43 and 49 EC Treaty respectively.
The Court points out that the national measure has to be non-discriminatory. It further points out that it is for the national court to consider whether the manner in which the conditions for submitting invitations to tender for licenses to organise bets on sporting events are laid down enables them in practice to be met more easily by Italian operators than by foreign operators. It makes clear that it this is so, those conditions do not satisfy the requirement of non-discrimination.51
Non-discriminatory restrictions must be either acceptable as exceptional measures expressly provided for in Articles 45 and 46 EC or justified for reasons of overriding general interest.
– A diminution or reduction of tax revenue does not constitute a matter of overriding general interest which may be relied on to justify a restriction.52
– The financing of social activities through a levy on the proceeds of authorised games must be nothing more than a mere incidental beneficial consequence and not the real justification.53
– Moral, religious and cultural factors, and the morally and financially harmful consequences for the individual and society which are associated with gaming and betting, could serve to justify the existence on the part of the national authorities of a margin of appreciation sufficient to enable them to determine what consumer protection and the preservation of public order require.54
– Restrictions on gaming activities may be justified by imperative requirements in the general interest, such as consumer protection and the prevention of both fraud and incitement to squander on gaming. However, restrictions based on such grounds and on the need to preserve public order must also be suitable for achieving those objectives, inasmuch as they must serve to limit betting activities in a consistent and systematic manner.55
– The restrictions must reflect a concern to bring about a genuine diminution of gambling opportunities. In so far as the authorities of a Member State incite and encourage consumers to participate in lotteries, games of chance and betting to the financial benefit of the public purse, the authorities of that State cannot invoke public order concerns relating to the need to reduce opportunities for betting.56
The restrictions imposed must not go beyond what is necessary to achieve the goals envisaged. In particular:
– Proportionality must be particularly assessed where involvement in betting is encouraged in the context of games organised by licensed national bodies.57
– It has to be determined whether the imposition of restrictions, accompanied by criminal penalties, goes beyond what is necessary to combat fraud, especially where the supplier of the service is subject in his Member State of establishment to a regulation entailing controls and penalties, where the intermediaries are lawfully constituted, and where those intermediaries considered that they were permitted to transmit bets on foreign sporting events.58
– It has further to be determined whether the national legislation, taking account of the detailed rules for its application, actually serves the aims which might justify it.59
– With respect to freedom of establishment, to prevent capital companies quoted on regulated markets of other Member States from obtaining licences to organise sporting bets, especially where there are other means of checking the accounts and
6. ECJ Omega / Laserdome C-36/02, 14.10.2004
German authorities issued a prohibition order with respect to a German company (“Omega”) on the grounds that the games which took place in Omega establishment (which involved simulated killing actions) constituted a danger to public order, since the acts of simulated homicide and the trivialisation of violence thereby engendered were held to be contrary to fundamental values, notably human dignity, protected by German Constitution. The order was issued on the basis of a regional law stating that “the police authorities may take measures necessary to avert a risk to public order or safety in an individual case”. The question was then raised as to whether the order is compatible with the EC Treaty provisions on freedom to provide services and free movement of goods.
Definition of “public order” as a justification
– The concept of ‘public policy’ in the Community context, particularly as a justification of a derogation from the fundamental principle of the freedom to provide services, must be interpreted strictly, so that its scope cannot be determined unilaterally by each Member State without any control by the Community institutions.61
– Public policy may be relied on only if there is a genuine and sufficiently serious threat to a fundamental interest of society.62
– The specific circumstances which may justify recourse to the concept of public policy may however, vary from one country to another and from one era to another. The competent national authorities must therefore be allowed a margin of discretion, within the limits imposed by the Treaty.63
Barriers to the freedom to provide services may be justified on public policy grounds only if they are necessary for the protection of the interests which they are intended to guarantee and only in so far as those objectives cannot be attained by less restrictive measures.
– It is not indispensable in that respect for the national restrictive measure to correspond to a conception shared by all Member States as regards the precise way in which the fundamental right or legitimate interest in question is to be protected.64
– Measures which restrict freedom to provide services may be justified on public policy ground only if they are necessary for the protection of the interests which they are intended to guarantee and only in so far as those objectives cannot be attained by less restrictive measures.65
– Although in Schindler reference was made to moral, religious or cultural considerations which lead all Member States to subject the organisation of lotteries and other money games to restrictions, it was not its intention, by mentioning that common conception, to formulate a general criterion for assessing the proportionality of any national measure which restricts the exercise of an economic activity.66
– On the contrary according to case-law subsequent to Schindler, the need for, and proportionality of, the provisions adopted are not excluded merely because one Member State has chosen a system of protection different from that adopted by another State.67
7. ECJ Lindman C-42/02, 13.11.2003
According to Finnish tax law, winnings from games of chance are exempt from income tax. The winnings of a Finnish national and resident, originating from a Swedish lottery draw, were however considered to be earned income subject to Finnish income tax, based on the argument that otherwise the Swedish operator and the Finnish national would both not be taxed in Finland. The case raised not only the question of a justification of barriers to arts. 49 and 50 EC Treaty; it concerned a manifest discrimination.
Article 49 EC Treaty prohibits a Member State’s legislation under which winnings from games of chance organised in other Member States are treated as income of the winner subject to income tax, whereas winnings from games of chance conducted in the Member State in question are not taxable.
The court pointed out that it is not sufficient if a Member State invokes a public interest objective to justify its national restrictive measures, but that Member States have to prove by the means of a concrete analysis, that the allegation of the objective is well founded.68
The analysis of the appropriateness and proportionality of a restrictive measure adopted by a Member State requires that the reasoning of the provisions in question disclose statistical or other evidence allowing a conclusion to be drawn as to the gravity of the risks connected to playing games of chance or the existence of a particular causal relationship between such risks and the participation by nationals of the Member State concerned in games organised in other Member States.69
8. ECJ Familiapress C-368/95, 26.7.1997
Remark: The case C -368/95 Familiapress invoked the justification of “media pluralism”. This case is not examined within this chapter because it concerned neither a case of a “game of chance” as defined in this study nor the compatibility with Art. 49 or 43 EC Treaty. It relates to the modalities of the sale of a newspaper containing prize games in another Member State and the question whether a national prohibition of the distribution of the newspaper in question on competition grounds would violate Art. 28 et seq EC Treaty.
9. Opinion Placanica and others, C-338/04, C-359/04 und C-360/04, 16.5.2006
As a most recent development on the EC level (May 2006) shall be cited the conclusion of Advocate General Colomer in the Placanica case, who interprets the art. 43 and 49 EC Treaty as follows: They preclude national legislation, which prohibits the pursuit of the activities of collecting, taking, booking and forwarding offers of bets for an enterprise not holding an authorisation or license issued by the Member State in question, by subjecting such activities to criminal penalties (up to 3 years imprisonment), if the enterprise cannot obtain such internal authorisation for its activity, but disposes of a valid license issued by its Member State of establishment.70
18 A new Treaty numbering has been introduced since the ratification of the Amsterdam Treaty.
19 See also C-110 and 111/78, Ministère Public v Van Wesemael, ECR 1979, 35, para. 28; C-220/83, Commission v France, ECR 1986, 3663, para. 20; C-15/78, Société Générale Alsacienne, ECR 1978, 1971 para. 5.
20 See Schindler, para. 60.
21 See Schindler, para. 57.
22 See Schindler, para. 58.
23 See Schindler, para. 60.
24 Läära, para. 31.
25 Läära, para. 32.
26 Läära, para. 32.
27 Para. 31 of Läära .
28 Schindler, para. 61; Läära para. 35.
29 Läära, para. 36.
30 Läära, para. 37.
31 Läära, para. 39.
32 Läära, para. 41.
33 Läära, para. 41.
34 The Court refers here (para. 31) to the following cases: joined Cases 110/78 and 111/78 Ministère Public v Van Wesemael, ECR 1979, para. 28, Case 220/83 Commission v France ECR 1986, 3663, para. 20, and Case 15/78, Société Générale Alsacienne, ECR 1978, 1971, para. 5.
35 See para. 30 of the decision.
36 See Zenatti, para. 33.
37 See Zenatti, para. 34.
38 See Zenatti, para. 35.
39 See Zenatti, para. 31 and 35.
40 See Zenatti, para. 35.
41 See Zenatti, para. 36.
42 See Zenatti, para. 36.
43 See Zenatti, para. 37.
44 See Anomar, para. 62 and 73.
45 See Anomar, para. 73.
46 See Anomar, para. 62 and 73.
47 See Anomar, para. 79. The Court refers here to Läära, para. 35, and Zenatti, para. 33.
48 See Anomar, para. 80. The Court refers here to Läära, para. 36, and Zenatti, para. 34.
49 See Anomar, para. 88.
50 See Anomar, para. 87. The Court refers here to Schindler, para. 61, Läärä, para. 35, and Zenatti, para. 33.
51 See Gambelli, para. 71.
52 See Gambelli, para. 61.
53 See Gambelli, para. 62.
54 See Gambelli, para. 63.
55 See Gambelli, para. 67.
56 See Gambelli, para. 69.
57 See Gambelli, para. 72.
58 See Gambelli, para. 73.
59 See Gambelli, para. 75.
60 See Gambelli, para. 74.
61 See Omega, para. 30. The Court refers here to Van Duyn, para. 18; C-30/77 Bouchereau [1977] ECR 1999, para. 33.
62 See Omega, para. 30. The Court refers here to Église de Scientologie C-54/99 [2000] ECR I-1335, para. 17.
63 See Omega, para. 31. The Court refers here to Van Duyn, para. 18, and Bouchereau, para. 34.
64 See Omega, para. 37.
65 See Omega, para. 36.
66 See Omega, para. 37.
67 See Omega, para. 38. The Court refers here to Läärä, para. 36; Zenatti, para. 34; Case C-6/01 Anomar and Others, ECR 2003, I-0000, para. 80.
68 See, C-55/94 Gebhard, ECR 1995, ECR I-4165 and C-100/01; Oteiza Olazabal, ECR 2002, I-10981, C- 42/04, Lindman, para. 25.
69 See C- 42/04, Lindman, para. 25, 26.
70 See Placanica, Opinion, para. 150.