Questore di Verona v Diego Zenatti.
Date: 1999-10-21
14 It must be borne in mind that, in paragraph 60 of Schindler, the Court laid emphasis on the moral, religious and cultural aspects of lotteries and other types of gambling in all the Member States.  The general tendency of national legislation is to restrict, or even prohibit, the practice of gambling and to prevent it from being a source of private profit.  The Court also observed that lotteries involve a high risk of crime and fraud, given the size of the amounts which can be staked and of the winnings which they can hold out to players, particularly when they are operated on a large scale.  They also constitute an incitement to spend which may have damaging individual and social consequences.  A final consideration which, although it cannot in itself be regarded as an objective justification, the Court held to be relevant 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.
15 In paragraph 61 of the judgment in Schindler the Court held that the special features of lotteries justify allowing national authorities a sufficient margin of appreciation to determine what is required to protect participants and, more generally, in the light of the specific social and cultural features of each Member State, to maintain order in society, taking into account the manner in which lotteries are operated, the size of the stakes and the allocation of the profits they yield.  In such circumstances, it is for the national authorities 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.
16 Even though the Schindler judgment concerns the organisation of lotteries, those considerations also apply, as is clear also from the very terms of paragraph 60 of that judgment, to other comparable forms of gambling.
17 It is true that in its judgment in Case C-368/95 Familiapress v Bauer Verlag  [1997] ECR I-3689, the Court declined to treat certain games in the same way as the lotteries considered in Schindler.  However, that case was concerned with magazine competitions involving crosswords or other puzzles in which a number of readers who had given correct answers received a prize following a draw.  As the Court held in particular, in paragraph 23 of that judgment, such draws, which are organised on a small scale and in which the stakes are small, do not constitute an economic activity in their own right but are merely one aspect of the editorial content of a magazine.
24 As the Court held in Schindler, the Treaty provisions on the freedom to provide services apply, in the context of running lotteries, to an activity which enables people to participate in gambling in return for remuneration.  Such an activity therefore falls within the scope of Article 59 of the EC Treaty (now, after amendment, Article 49 EC) if at least one of the providers is established in a Member State other than that in which the service is offered.
25 In this case, the services at issue are provided by the organiser of the betting and his agents by enabling those placing bets to participate in a game of chance which holds out prospects of winnings.  Those services are normally provided for remuneration consisting in payment of the stake and they are cross-frontier in character.
26 It is not disputed by the parties to the main proceedings, the various Governments which have submitted observations or the Commission that the Italian legislation, inasmuch as it prohibits the taking of bets by any person or body other than those which may be licensed to do so, applies without distinction to all operators who might be interested in such an activity, whether established in Italy or in another Member State.
27 However, such legislation, preventing as it does operators in other Member States from taking bets, directly or indirectly, in Italian territory, constitutes an obstacle to the freedom to provide services.
29 Articles 55 of the EC Treaty (now Article 45 EC) and 56 of the EC Treaty (now, after amendment, Article 46 EC), which are applicable in this area by virtue of Article 66 of the EC Treaty (now Article 55 EC), allow restrictions justified by a connection, even if occasional, with the exercise of official authority or for reasons of public policy, public security or public health.  Moreover, according to the case-law of the Court (see, to that effect, Case C-288/89 Collectieve Antennevoorziening Gouda and Others [1991] ECR I-4007, paragraphs 13 to 15), restrictions on the freedom to provide services deriving from national measures which apply without distinction are acceptable only if those measures are justified by overriding reasons relating to the public interest, are suitable for securing the attainment of the objective which they pursue and do not go beyond what is necessary in order to attain it.
30 According to the information given in the order for reference and the observations of the Italian Government, the legislation at issue in the main proceedings pursues objectives similar to those pursued by the United Kingdom legislation on lotteries, as identified by the Court in Schindler.  The Italian legislation seeks to prevent such gaming from being a source of private profit, to avoid risks of crime and fraud and the damaging individual and social consequences of the incitement to spend which it represents and to allow it only to the extent to which it may be socially useful as being conducive to the proper conduct of competitive sports.
31 As the Court acknowledged in paragraph 58 of Schindler, those objectives must be considered together.  They concern the protection of the recipients of the service and, more generally, 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 (see Joined Cases 110/78 and 111/78 Ministère Public v Van Wesemael [1979] ECR 35, paragraph 28, Case 220/83 Commission v France [1986] ECR 3663, paragraph 20, and Case 15/78 Société Générale Alsacienne de Banque v Koestler [1978] ECR 1971, paragraph 5).  Moreover, as held in paragraph 29 of this judgment, measures based on such reasons must be suitable for securing attainment of the objectives pursued and not go beyond what is necessary to attain them.
33 However, determination of the scope of the protection which a Member State intends providing in its territory in relation to lotteries and other forms of gambling falls within the margin of appreciation which the Court, in paragraph 61 of Schindler, recognised as being enjoyed by the national authorities.  It is for those 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.
34 In those circumstances, 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.  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.
35 As the Court pointed out in paragraph 37 of its judgment of 21 September 1999 in Case C-124/97 Läärä and Others [1999] ECR I-0000 in relation to slot machines, the fact that the games in issue 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, which must be considered as a whole. 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.
36 However, as the Advocate General observes in paragraph 32 of his Opinion, such a limitation is acceptable only if, from the outset, 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.  As the Court observed in paragraph 60 of Schindler, even if it is not irrelevant that lotteries and other types of gambling may contribute significantly to the financing of benevolent or public-interest activities, that motive cannot in itself be regarded as an objective justification for restrictions on the freedom to provide services.
37 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.