Her Majesty's Customs and Excise v Gerhart Schindler and Jörg Schindler.
Date: 1994-03-24
19 Since some governments argue that lotteries are not "economic activities" within the meaning of the Treaty, it must be made clear that the importation of goods or the provision of services for remuneration (see on the latter point the judgments in Case 13/76 Donà v Mantero [1976] ECR 1333, at paragraph 12, and Case 196/87 Steymann v Staatssecretaris van Justitie [1988] ECR 6159, at paragraph 10) are to be regarded as "economic activities" within the meaning of the Treaty.
22 The activity pursued by the defendants in the main proceedings appears, admittedly, to be limited to sending advertisements and application forms, and possibly tickets, on behalf of a lottery operator, SKL. However, those activities are only specific steps in the organization or operation of a lottery and cannot, under the Treaty, be considered independently of the lottery to which they relate. The importation and distribution of objects are not ends in themselves. Their sole purpose is to enable residents of the Member States where those objects are imported and distributed to participate in the lottery.
23 The point relied on by Gerhart and Joerg Schindler, that on the facts of the main proceedings agents of the SKL send material objects into Great Britain in order to advertise the lottery and sell tickets therein, and that material objects which have been manufactured are goods within the meaning of the Court' s case-law, is not sufficient to reduce their activity to one of exportation or importation.
24 Lottery activities are thus not activities relating to "goods", falling, as such, under Article 30 of the Treaty.
25 They are however to be regarded as "services" within the meaning of the Treaty.
32 In these circumstances, lotteries cannot be regarded as activities whose harmful nature causes them to be prohibited in all the Member States and whose position under Community law may be likened to that of activities involving illegal products (see, in relation to drugs, the judgment in Case 294/82 Einberger v Hauptzollamt Freiburg [1984] ECR 1177) even though, as the Belgian and Luxembourg Governments point out, the law of certain Member States treats gaming contracts as void. Even if the morality of lotteries is at least questionable, it is not for the Court to substitute its assessment for that of the legislatures of the Member States where that activity is practised legally (see the judgment in Case C-159/90 Society for the Protection of Unborn Children Ireland [1991] ECR I-4685, at paragraph 20).
35 Although in many Member States the law provides that the profits made by a lottery may be used only for certain purposes, in particular in the public interest, or may even be required to be paid into the State budget, the rules on the allocation of profits do not alter the nature of the activity in question or deprive it of its economic character.
37 Consequently, the reply to be given to the first and fourth questions should be that 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 Article 60 of the Treaty and accordingly falls within the scope of Article 59 of the Treaty.
The second and third questions
43 According to the case-law of the Court (see the judgment in Case C-76/90 Saeger v Dennemeyer [1991] ECR I-4221, at paragraph 12) national legislation may fall within the ambit of Article 59 of the Treaty, even if it is applicable without distinction, 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 similar services.
50 It is true that the prohibition in question in the main proceedings does not apply to all types of lottery, small-scale lotteries not conducted for private gain being permitted in the national territory and the prohibition being set in the more general context of the national legislation on gambling which permits certain forms of gambling similar to lotteries, such as football pools or "bingo".
51 However, even though the amounts at stake in the games so permitted in the United Kingdom may be comparable to those in large-scale lotteries and even though those games involve a significant element of chance they differ in their object, rules and methods of organization from those large-scale lotteries which were established in Member States other than the United Kingdom before the enactment of the National Lottery etc. Act 1993. They are therefore not in a comparable situation to the lotteries prohibited by the United Kingdom legislation and, contrary to the arguments of the Commission and the defendants in the main proceedings, cannot be assimilated to them.
52 In those circumstances legislation such as the United Kingdom legislation cannot be considered to be discriminatory.
57 According to the information provided by the referring court, the United Kingdom legislation, before its amendment by the 1993 Act establishing the national lottery, pursued the following objectives: to prevent crime and to ensure that gamblers would be treated honestly; to avoid stimulating demand in the gambling sector which has damaging social consequences when taken to excess; and to ensure that lotteries could not be operated for personal and commercial profit but solely for charitable, sporting or cultural purposes.
58 Those considerations, 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. The Court has already held that those objectives figure among those which can justify restrictions on freedom to provide services (see the judgments in Joined Cases 110 and 111/78 Ministère Public v Van Wesemael [1979] ECR 35, at paragraph 28; Case 220/83 Commission v France [1986] ECR 3663, at paragraph 20; Case 15/78 Société Générale Alsacienne de Banque v Koestler [1978] ECR 1971, at paragraph 5).
59 Given the peculiar nature of lotteries, which has been stressed by many Member States, those considerations are such as to justify restrictions, as regards Article 59 of the Treaty, which may go so far as to prohibit lotteries in a Member State.
60 First of all, it is not possible to disregard the moral, religious or cultural aspects of lotteries, like other types of gambling, in all the Member States. The general tendency of the Member States is to restrict, or even prohibit, the practice of gambling and to prevent it from being a source of private profit. Secondly, lotteries involve a high risk of crime or fraud, given the size of the amounts which can be staked and of the winnings which they can hold out to the players, particularly when they are operated on a large scale. Thirdly, they are an incitement to spend which may have damaging individual and social consequences. A final ground which is not without relevance, although it cannot in itself be regarded as an objective justification, is that lotteries may make a significant contribution to the financing of benevolent or public interest activities such as social works, charitable works, sport or culture.
61 Those particular factors justify national authorities having a sufficient degree of latitude to determine what is required to protect the players and, more generally, in the light of the specific social and cultural features of each Member State, to maintain order in society, as regards the manner in which lotteries are operated, the size of the stakes, and the allocation of the profits they yield. In those circumstances, it is for them to assess not only whether it is necessary to restrict the activities of lotteries but also whether they should be prohibited, provided that those restrictions are not discriminatory.