Zeturf Ltd v Premier ministre.
Date: 2011-06-30
37. It should be borne in mind at the outset that a restriction on the freedom to provide services, such as that found by the referring court, 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 (Case C-42/07 Liga Portuguesa de Futebol Profissional and Bwin International  [2009] ECR I‑7633, paragraph 55).
38. With regard, more specifically, to the justifications which are capable of being accepted, the Court has observed that the objectives pursued by national legislation adopted in the area of betting and gaming, considered as a whole, usually concern the protection of the recipients of the services in question and of consumers more generally, and the protection of society. It has also held that such objectives are amongst the overriding reasons in the public interest capable of justifying obstacles to the freedom to provide services (Joined Cases C‑316/07, C‑358/07 to C‑360/07, C‑409/07 and C‑410/07 Stoß and Others [2010] ECR I‑0000, paragraph 74 and case-law cited).
39. The Court has, moreover, often stated that 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, in accordance with their own scale of values, what is required in order to ensure consumer protection and the protection of society ( Stoß and Others , paragraph 76 and case-law cited).
40. Consequently, the Member States are, in principle, free to set the objectives of their policy on betting and gaming and, where appropriate, to define in detail the level of protection sought (see, to that effect, Liga Portuguesa de Futebol Profissional and Bwin International , paragraph 59).
41. A Member State that is seeking to ensure a particularly high level of protection may, consequently, as the Court has acknowledged in its decisions, be entitled to take the view that it is only by granting exclusive rights to a single body which is subject to strict control by the public authorities that it can tackle the risks connected with the gambling sector and pursue the objective of preventing incitement to squander money on gambling and combating addiction to gambling with sufficient effectiveness (see, to that effect, Stoß and Others , paragraphs 81 and 83).
42. The national public authorities may indeed legitimately consider that the fact that, in their capacity as overseer of the body holding the monopoly, they will have additional means of influencing the latter’s conduct outside the statutory regulating and monitoring mechanisms is likely to secure for them a better command over the supply of games of chance and better guarantees that implementation of their policy will be effective than in the case where those activities are carried on by private operators in a situation of competition, even if the latter are subject to a system of authorisation and a regime of supervision and penalties ( Stoß and Others , paragraph 82).
43. The fact remains, however, that the restrictions imposed must satisfy the conditions laid down in the case-law of the Court as regards their proportionality, a matter which it is for the national courts to determine (Liga Portuguesa de Futebol Profissional and Bwin International , paragraphs 59 and 60, as well as Stoß and Others , paragraphs 77 and 78).
45. It is apparent from the documents provided by the referring court to the Court, and from the observations of the French government before the Court, that the national legislation pursues three objectives, the main two being, first, to combat fraud and money laundering in the horse-race betting sector and, second, to protect society, having regard to the effects of gambling on individuals and on society. The third objective, cited only as a subsidiary matter by the PMU and the French government, is that of contributing to rural development by financing horse breeding.
46. The first two of those objectives are, as noted in paragraph 38 of the present judgment, among those that have been acknowledged as being capable of justifying restrictions on the freedom to provide gambling services. However, as it was recalled in paragraph 41 of this judgment, the establishment of a measure as restrictive as a monopoly can be justified only in order to ensure a particularly high level of protection with regard to those objectives.
47. Therefore, it is for the referring court to determine whether the national authorities genuinely sought, at the material time, to ensure a particularly high level of protection and whether, having regard to the level of protection sought, the establishment of a monopoly could actually be considered necessary.
48. It should be recalled, in that context, that the mere fact that the authorisation and control of a certain number of private operators may prove more burdensome for the national authorities than supervision of a single operator is irrelevant. Indeed, it is apparent from the case-law of the Court that administrative inconvenience does not constitute a ground that can justify a restriction on a fundamental freedom guaranteed by European Union law (see, to that effect, Case C-386/04 Centro di Musicologia Walter Stauffer [2006] ECR I‑8203, paragraph 48, and Case C-318/07 Persche [2009] ECR I‑359, paragraph 55).
52. In that regard, the Court has stated on several occasions that, although it is not irrelevant that a levy on the proceeds of authorised gambling may contribute significantly to the financing of such activities, such a ground could constitute only an ancillary beneficial consequence and not the substantive justification for the restrictive policy established (see, to that effect, Schindler , paragraph 60, and Case C-67/98 Zenatti  [1999] ECR I‑7289, paragraph 36). Indeed, it is settled case‑law that economic grounds are not included in the grounds listed in Articles 45 EC and 46 EC and do not constitute an overriding reason in the public interest capable of justifying a restriction on the freedom of establishment or the freedom to provide services (see, to that effect, Case C-243/01 Gambelli and Others  [2003] ECR I‑13031, paragraph 61 and case-law cited, and Case C-153/08 Commission v Spain [2009] ECR I‑9735, paragraph 43).
57. It should nevertheless be recalled in that context that national legislation is appropriate for ensuring attainment of the objective pursued only if it genuinely reflects a concern to attain it in a consistent and systematic manner (Case C‑169/07 Hartlauer [2009] ECR I‑1721, paragraph 55).
58. The Court has already held in that regard that the establishment of a measure as restrictive as a monopoly must be accompanied by a legislative framework suitable for ensuring that the holder of the said monopoly will in fact be able to pursue, in a consistent and systematic manner, the objective thus determined by means of a supply that is quantitatively measured and qualitatively designed by reference to the said objective and subject to strict control by the public authorities ( Stoß and Others , paragraph 83).
62. It is consequently for the national court to determine, in the light of, inter alia, the development of the market for games of chance in France, whether the State controls to which the activities of the PMU are, in principle, subject are actually implemented in the consistent and systematic pursuit of the objectives sought by the establishment of the system whereby exclusive rights are conferred on the PMU (see, to that effect, Case C-258/08 Ladbrokes Betting & Gaming and Ladbrokes International  [2010] ECR I-0000, paragraph 37).
66. It must be recalled at the outset in that context that, in so far as the authorities of a Member State incite and encourage consumers to participate in games of chance to the financial benefit of the public purse, the authorities of that State cannot invoke public and social policy concerns relating to the need to reduce opportunities for gambling in order to justify restrictions on the freedom to provide services ( Gambelli and Others , paragraph 69)
67. The Court has nevertheless held that a policy of controlled expansion of gambling activities may be consistent with the objective of channelling them into controlled circuits by drawing bettors away from clandestine, prohibited betting and gaming to activities which are authorised and regulated. Such a policy may indeed be consistent both with the objective of preventing the use of gambling activities for criminal or fraudulent purposes and that of preventing incitement to squander money on gambling and of combating addiction to the latter, by directing consumers towards the offer emanating from the holder of the public monopoly, that offer being deemed to be protected from criminal elements and also designed to safeguard consumers more effectively against squandering of money and addiction to gambling ( Stoß and Others , paragraphs 101 and 102).
68. In order to achieve that objective of channelling into controlled activities, it is common ground that authorised operators must represent a reliable, but at the same time attractive, alternative to non-regulated activities, which may as such necessitate the offer of an extensive range of games, advertising on a certain scale and the use of new distribution techniques (Joined Cases C‑338/04, C‑359/04 and C‑360/04 Placanica and Others [2007] ECR I‑1891, paragraph 55, and Stoß and Others , paragraph 101).
69. It is specifically for the national court to determine, in the light of the facts of the dispute before it, whether the commercial policy of the PMU may be regarded, both with regard to the scale of advertising undertaken and with regard to its creation of new games, as forming part of a policy of controlled expansion in the betting and gaming sector, aiming, in fact, to channel the propensity to gamble into controlled activities ( Ladbrokes Betting & Gaming and Ladbrokes International , paragraph 37).
70. In the context of that assessment, it is for the national court to determine, in particular, whether, first, criminal and fraudulent activities linked to gambling and, second, gambling addiction might have been a problem in France at the material time and whether the expansion of authorised and regulated activities would have been capable of solving such a problem ( Ladbrokes Betting & Gaming and Ladbrokes International , paragraph 29). In particular, the Court has stated that if a Member State wishes to rely on an objective capable of justifying an obstacle to the freedom to provide services arising from a national restrictive measure, it is under a duty to supply the court called upon to rule on that question with all the evidence of such a kind as to enable the latter to be satisfied that the said measure does indeed fulfil the requirements arising from the principle of proportionality ( Stoß and Others , paragraph 71). In that regard the Commission argues that the national authorities have not, in contrast to the situation in Placanica and Others  and Liga Portuguesa de Futebol Profissional and Bwin International , demonstrated the reality of a black market for betting on horseracing.
71. In any event, any advertising issued by the holder of a public monopoly must remain measured and strictly limited to what is necessary in order thus to channel consumers towards controlled gaming networks. Such advertising cannot, on the other hand, specifically aim to encourage consumers’ natural propensity to gamble by stimulating their active participation in it, such as by trivialising gambling or giving it a positive image owing to the fact that revenues derived from it are used for activities in the public interest, or by increasing the attractiveness of gambling by means of enticing advertising messages holding out the prospect of major winnings ( Stoß and Others , paragraph 103).
74. It must be stated at the outset that any restriction concerning the supply of games of chance over the internet is more of an obstacle to operators established outside the Member State concerned, in which the recipients benefit from the services; those operators, as compared with operators established in that Member State, would thus be denied a means of marketing that is particularly effective for directly accessing that market (see, to that effect, Case C‑322/01 Deutscher Apothekerverband  [2003] ECR I‑14887, paragraph 74, and Case C‑108/09 Ker‑Optika  [2010] ECR I‑0000, paragraph 54).
75. It is apparent from the case-law of the Court, moreover, that the internet constitutes a simple channel through which games of chance may be offered (Case C-46/08 Carmen Media Group  [2010] ECR I-0000, paragraph 101).
78. Nevertheless, the Court has already had occasion to draw attention to certain particularities relating to the offering of games of chance on the internet (see Liga Portuguesa de Futebol Profissional and Bwin International , paragraph 72, and Carmen Media Group , paragraph 101).
79. It has thus observed in particular that, 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, and Carmen Media Group , paragraph 102).
80. Furthermore, the Court has noted that, in the same way, the characteristics specific to the offer of games of chance by the internet may prove to be a source of risks of a different kind and a greater order in the area of consumer protection, particularly in relation to young persons and those with a propensity for gambling or likely to develop such a propensity, in comparison with traditional markets for such games. Apart from the lack of direct contact between the consumer and the operator, previously referred to, the particular ease and the permanence of access to games offered over the internet and the potentially high volume and frequency of such an international offer, in an environment which is moreover characterised by isolation of the player, anonymity and an absence of social control, constitute so many factors likely to foster the development of gambling addiction and the related squandering of money, and thus likely to increase the negative social and moral consequences attaching thereto, as has been underlined by settled case-law ( Carmen Media Group , paragraph 103).