Sporting Exchange Ltd v Minister van Justitie.
Date: 2010-06-03
22. By its first question, the national court asks, in essence, whether Article 49 EC must be interpreted as precluding legislation of a Member State, such as the legislation at issue in the main pr oceedings, under which exclusive rights to organise and promote games of chance are conferred on a single operator, and which prohibits any other operator, including an operator established in another Member State, from offering via the internet services within the scope of that regime in the territory of the first Member State.
23. Article 49 EC requires the abolition of all restrictions on the freedom to provide services, even if those restrictions apply without distinction to national providers of services and to those from other Member States, when they are liable to prohibit, impede or render less advantageous the activities of a service provider established in another Member State where it lawfully provides similar services. The freedom to provide services is for the benefit of both providers and recipients of services (Case C‑42/07 Liga Portuguesa de Futebol Profissional and Bwin International [2009] ECR I‑0000, paragraph 51 and the case-law cited).
24. It is common ground that legislation of a Member State such as the legislation at issue in the main proceedings constitutes a restriction on the freedom to provide services enshrined in Article 49 EC (see, to that effect, Liga Portuguesa de Futebol Profissional and Bwin International , paragraph 52, and Case C‑258/08 Ladbrokes Betting & Gaming and Ladbrokes International  [2010] ECR I‑0000, paragraph 16).
25. However, it is necessary to assess whether such a restriction may be allowed as a derogation expressly provided for by Articles 45 EC and 46 EC, applicable in this area by virtue of Article 55 EC, or justified, in accordance with the case-law of the Court, by overriding reasons in the public interest (see, to that effect, Liga Portuguesa de Futebol Profissional and Bwin International , paragraph 55).
26. Article 46(1) EC allows restrictions justified on grounds of public policy, public security or public health. A certain number of overriding reasons in the public interest which may also justify such restrictions have been recognised by the case-law of the Court, including, in particular, the objectives of consumer protection and the prevention of both fraud and incitement to squander money on gambling, as well as the general need to preserve public order ( Liga Portuguesa de Futebol Profissional and Bwin International , paragraph 56).
27. In that context, moral, religious or cultural factors, as well as the morally and financially harmful consequences for the individual and for society associated with betting and gaming, may serve to justify a margin of discretion for the national authorities, sufficient to enable them to determine what is required in order to ensure consumer protection and the preservation of public order (Case C‑243/01 Gambelli and Others  [2003] ECR I‑13031, paragraph 63, and Joined Cases C‑338/04, C‑359/04 and C‑360/04 Placanica and Others  [2007] ECR I‑1891, paragraph 47).
28. The Member States are free to set the objectives of their policy on betting and gambling according to their own scale of values and, where appropriate, to define in detail the level of protection sought. The restrictive measures that they impose must, however, satisfy the conditions laid down in the case-law of the Court, in particular as regards their proportionality (see, to that effect, Placanica and Others , paragraph 48, and Liga Portuguesa de Futebol Profissional and Bwin International , paragraph 59).
29. According to the case-law of the Court, it is for the national courts to determine whether Member States’ legislation actually serves the objectives which might justify it and whether the restrictions it imposes do not appear disproportionate in the light of those objectives ( Gambelli and Others , paragraph 75, and Placanica and Others , paragraph 58).
33. It should be noted in that regard that the internet gaming industry has not been the subject of harmonisation within the European Union. A Member State is therefore entitled to take the view that the mere fact that an operator such as Betfair lawfully offers services in that sector via the internet in another Member State, in which it is established and where it is in principle already subject to statutory conditions and controls on the part of the competent authorities in that State, cannot be regarded as amounting to a sufficient assurance that national consumers will be protected against the risks of fraud and crime, in the light of the difficulties liable to be encountered in such a context by the authorities of the Member State of establishment in assessing the professional qualities and integrity of operators (see, to that effect, Liga Portuguesa de Futebol Profissional and Bwin International , paragraph 69).
34. In addition, because of the lack of direct contact between consumer and operator, games of chance accessible via the internet involve different and more substantial risks of fraud by operators against consumers compared with the traditional markets for such games ( Liga Portuguesa de Futebol Profissional and Bwin International , paragraph 70).
36. It follows that, in the light of the specific features associated with the provision of games of chance via the internet, the restriction at issue in the main proceedings may be regarded as justified by the objective of combating fraud and crime ( Liga Portuguesa de Futebol Profissional and Bwin International , paragraph 72).
39. As European Union law now stands, service concession contracts are not governed by any of the directives by which the Union legislature has regulated the field of public procurement. However, the public authorities concluding them are bound to comply with the fundamental rules of the EC Treaty in general, including Article 49 EC and, in particular, the principles of equal treatment and of non-discrimination on the ground of nationality and with the consequent obligation of transparency (see, to that effect, Case C‑324/98 Telaustria and Telefonadress  [2000] ECR I‑10745, paragraphs 60 to 62; Case C‑206/08 Eurawasser [2009] ECR I‑0000, paragraph 44; and Case C‑91/08 Wall  [2010] ECR I‑0000, paragraph 33).
40. That obligation of transparency applies where the service concession in question may be of interest to an undertaking located in a Member State other than that in which the concession is awarded (see, to that effect, Case C‑231/03 Coname  [2005] ECR I‑7287, paragraph 17, and Wall , paragraph 34).
41. Without necessarily implying an obligation to launch an invitation to tender, that obligation of transparency requires the concession-granting authority to ensure, for the benefit of any potential concessionaire, a degree of advertising sufficient to enable the service concession to be opened up to competition and the impartiality of the procurement procedures to be reviewed (see, to that effect, Case C‑324/07 Coditel Brabant [2008] ECR I‑8457, paragraph 25, and Wall , paragraph 36).
46. The fact that the issue of a single licence is not the same as a service concession contract does not, in itself, justify any failure to have regard to the requirements arising from Article 49 EC, in particular the principle of equal treatment and the obligation of transparency, when granting an administrative licence such as that at issue in the main proceedings.
47. As the Advocate General stated in points 154 and 155 of his Opinion, the obligation of transparency appears to be a mandatory prior condition of the right of a Member State to award to an operator the exclusive right to carry on an economic activity, irrespective of the method of selecting that operator. Such an obligation should apply in the context of a system whereby the authorities of a Member State, by virtue of their public order powers, grant a licence to a single operator, because the effects of such a licence on undertakings established in other Member States and potentially interested in that activity are the same as those of a service concession contract.
49. Nevertheless, such a system cannot render legitimate discretionary conduct on the part of the national authorities which is liable to negate the effectiveness of provisions of European Union law, in particular those relating to a fundamental freedom such as the freedom to provide services.
50. It has consistently been held that if a prior administrative authorisation scheme is to be justified, even though it derogates from a fundamental freedom, it must be based on objective, non-discriminatory criteria known in advance, in such a way as to circumscribe the exercise of the authorities’ discretion so that it is not used arbitrarily (Case C‑389/05 Commission  v France  [2008] ECR I‑5397, paragraph 94, and Case C‑169/07 Hartlauer  [2009] ECR I‑1721, paragraph 64). Furthermore, any person affected by a restrictive measure based on such a derogation must have a judicial remedy available to them (see, to that effect, Case C‑205/99 Analir and Others  [2001] ECR I‑1271, paragraph 38).
58. As the Advocate General observed in point 161 of his Opinion, it is important to distinguish the effects of competition in the market for games of chance, the detrimental nature of which may justify a restriction on the activity of economic operators, from the effects of a call for tenders for the award of the contract in question. The detrimental nature of competition in the market, that is to say, between several operators authorised to operate the same game of chance, arises from the fact that those operators would be led to compete with each other in inventiveness in making what they offer more attractive and, in that way, increasing consumers’ expenditure on gaming and the risks of their addiction. On the other hand, such consequences are not to be feared at the stage of issuing a licence.
59. In any event, the restrictions on the fundamental freedom enshrined in Article 49 EC which arise specifically from the procedures for the grant of a licence to a single operator or for the renewal thereof, such as those at issue in the main proceedings, may be regarded as being justified if the Member State concerned decides to grant a licence to, or renew the licence of, a public operator whose management is subject to direct State supervision or a private operator whose activities are subject to strict control by the public authorities (see, to that effect, Case C‑124/97 Läärä and Others  [1999] ECR I‑6067, paragraphs 40 and 42, and Liga Portuguesa de Futebol Profissional and Bwin International , paragraphs 66 and 67).