Carmen Media Group Ltd v Land Schleswig-Holstein and Innenminister des Landes Schleswig-Holstein.
Date: 2010-09-08
40. In that regard, it should be noted that activities which consist in allowing users to participate, for remuneration, in a game of chance constitute ‘services’ for the purposes of Article 49 EC (see, to that effect, Case C‑275/92 Schindler  [1994] ECR I‑1039, paragraph 25, and Case C‑67/98 Zenatti  [1999] ECR I‑7289, paragraph 24).
41. Therefore, as consistent case-law shows, such services fall within the scope of Article 49 EC where the provider is established in a Member State other than the one in which the service is offered (see, to that effect, Zenatti , paragraphs 24 and 25). That is particularly so in the case of services which the provider offers via the internet to potential recipients established in other Member States and which he provides without moving from the Member State in which he is established (see, to that effect, Gambelli and Others , paragraphs 53 and 54).
43. The right of an economic operator, established in a Member State, to provide services in another Member State, which that provision lays down, is not subject to the condition that the said operator also provides such services in the Member State in which he is established (see Case C‑56/96 VT4  [1997] ECR I‑3143, paragraph 22). In that regard, Article 49 EC requires only that the provider be established in a Member State other than that of the recipient.
44. Such a finding is, moreover, without prejudice to the ability of any Member State whose territory is covered by an offer of bets emanating, via the internet, from such an operator, to require the latter to comply with restrictions laid down by its legislation in that area, provided those restrictions comply with the requirements of European Union law (‘EU law’), particularly that they be non-discriminatory and proportionate (Joined Cases C-338/04, C-359/04 and C-360/04 Placanica and Others  [2007] ECR I‑1891, paragraphs 48 and 49).
45. In that regard, it should be noted that, with regard to the justifications which may be accepted where internal measures restrict the freedom to provide services, the Court has held several times that the objectives pursued by national legislation in the area of gambling and bets, 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 public order. 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 (see to that effect, in particular, Schindler , paragraph 58; Läärä and Others , paragraph 33; Zenatti , paragraph 31; Case C-6/01 Anomar and Others  [2003] ECR I‑8621, paragraph 73; and Placanica and Others , paragraph 46).
46. The case-law of the Court of Justice thus shows that it is for each Member State to assess whether, in the context of the legitimate aims which it pursues, it is necessary wholly or partially to prohibit activities of that nature, or only to restrict them and to lay down more or less strict supervisory rules for that purpose, the necessity and the proportionality of the measures thus adopted having only to be assessed having regard to the objectives pursued and the level of protection sought to be ensured by the national authorities concerned (see to that effect, in particular, Läärä and Others , paragraphs 35 and 36; Zenatti , paragraphs 33 and 34; and Case C‑42/07 Liga Portuguesa de Futebol Profissional and Bwin International [2009] ECR I-7633, paragraph 58).
50. It should also be remembered that the Court of Justice has previously held that the question of the applicability of Article 49 EC is distinct from that of whether a Member State may take measures to prevent a provider of services established in another Member State from circumventing its internal legislation (see, to that effect, Case C-23/93 TV10  [1994] ECR I-4795, paragraph 15, and, by analogy, concerning the freedom of establishment, Case C-212/97 Centros  [1999] ECR I‑1459, paragraph 18).
55. As a preliminary observation, it should be noted that, in paragraph 67 of the judgment in Gambelli and Others , after stating that restrictions on gaming activities might be justified by imperative requirements in the public interest, such as consumer protection and the prevention of both fraud and incitement to squander money on gambling, the Court held that that applied only in so far as such restrictions, based on such grounds and on the need to preserve public order, were suitable for achieving those objectives, inasmuch as they must serve to limit betting activities in a consistent and systematic manner.
58. In that regard, as is apparent from the case-law referred to in paragraph 46 of this judgment, it is for each Member State to assess whether, in the context of the legitimate aims which it pursues, it is necessary wholly or partially to prohibit activities of that nature, or only to restrict them and to lay down more or less strict supervisory rules for that purpose, the need for and the proportionality of the measures thus adopted having to be assessed solely in relation to the objectives pursued and the level of protection which the national authorities concerned seek to ensure.
59. The Court has also held that, in the context of legislation which is compatible with the 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 ( Anomar and Others , paragraph 88).
60. The Court has also held that, in the matter of games of chance, it is in principle necessary to examine separately for each of the restrictions imposed by the national legislation whether, in particular, it is suitable for achieving the objective or objectives invoked by the Member State concerned and whether it does not go beyond what is necessary in order to achieve those objectives ( Placanica and Others , paragraph 49).
61. In paragraphs 50 to 52 of its judgment in Schindler , delivered in relation to legislation of a Member State prohibiting lotteries, the Court observed in particular that, whilst they might give rise to stakes comparable to those of lotteries and involve a significant element of chance, other games for money such as football pools or ‘bingo’, which remained authorised in that Member State, differed in their object, rules and methods of organisation from lotteries established in other Member States. They were therefore not in a comparable situation to that of lotteries prohibited by the legislation of that Member State and could not be assimilated to them.
63. In those circumstances, the fact that some types of games of chance are subject to a public monopoly whilst others are subject to a system of authorisations issued to private operators, cannot, in itself, render devoid of justification, having regard to the legitimate aims which they pursue, measures which, like the public monopoly, appear at first sight to be the most restrictive and the most effective. Such a divergence in legal regimes is not, in itself, capable of affecting the suitability of such a public monopoly for achieving the objective of preventing citizens from being incited to squander money on gambling and of combating addiction to the latter, for which it was established.
65. The Court has, similarly, held that it is for the national courts to ensure, having regard in particular to the actual rules for applying the restrictive legislation concerned, that the latter genuinely meets the concern to reduce opportunities for gambling and to limit activities in that area in a consistent and systematic manner (see to that effect, in particular, Zenatti , paragraphs 36 and 37, and Placanica and Others , paragraphs 52 and 53).
66. As the Court has already held in those various respects, in Gambelli and Others , paragraphs 7, 8 and 69, in so far as the authorities of a Member State incite and encourage consumers to participate in lotteries, games of chance or 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 gambling in order to justify restrictive measures, even if, as in that case, the latter relate exclusively to betting activities.
68. In that respect, on the basis of such findings, it must be acknowledged that the referring court may legitimately be led to consider that the fact that, in relation to games of chance other than those covered by the public monopoly at issue in the main proceedings, the competent authorities thus pursue policies seeking to encourage participation in those games rather than to reduce opportunities for gambling and to limit activities in that area in a consistent and systematic manner has the effect that the aim of preventing incitement to squander money on gambling and of combating addiction to the latter, which was at the root of the establishment of the said monopoly, can no longer be effectively pursued by means of the monopoly, with the result that the latter can no longer be justified having regard to Article 49 EC.
69. As for the fact that the various games of chance concerned are partially within the competence of the Länder  and partially within the competence of the federal State, it should be recalled that, according to consistent case-law, a Member State may not rely on provisions, practices or situations of its internal legal order in order to justify non‑compliance with its obligations under EU law. The internal allocation of competences within a Member State, such as between central, regional or local authorities, cannot, for example, release that Member State from its obligation to fulfil those obligations (see to that effect, in particular, Case C‑417/99 Commission  v Spain  [2001] ECR I-6015, paragraph 37).
70. It follows from the above that, whilst EU law does not preclude an internal allocation of competences whereby certain games of chance are a matter for the Länder  and others for the federal authority, the fact remains that, in such a case, the authorities of the Land  concerned and the federal authorities are jointly required to fulfil the obligation on the Federal Republic of Germany not to infringe Article 49 EC. It follows that, in the full measure to which compliance with that obligation requires it, those various authorities are bound, for that purpose, to coordinate the exercise of their respective competences.
75. In that regard, according to settled case-law, in proceedings under Article 267 TFEU, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is, in principle, bound to give a ruling (see, in particular, Case C‑379/98 PreussenElektra  [2001] ECR I-2099, paragraph 38, and Case C‑169/07 Hartlauer  [2009] ECR I‑1721, paragraph 24).
76. The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite clear that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it ( PreussenElektra , paragraph 39, and Hartlauer , paragraph 25).
84. The Court’s case-law shows that, if a Member State pursues an objective seeking to reduce gambling opportunities, it is entitled, in principle, to establish a system of authorisation and in that respect to lay down restrictions as to the number of operators authorised ( Placanica and Others , paragraph 53).
85. However, the margin of discretion which the Member States thus enjoy in restricting gambling does not exonerate them from ensuring that the measures they impose satisfy the conditions laid down in the case-law of the Court, particularly as regards their proportionality (see, in particular, Liga Portuguesa de Futebol Profissional and Bwin International , paragraph 59 and case-law cited).
86. According to consistent case-law, where a system of authorisation pursuing legitimate objectives recognised by the case-law is established in a Member State, 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 EU law, in particular those relating to a fundamental freedom such as that at issue in the main proceedings (see, in particular, Case C‑203/08 Sporting Exchange  [2010] ECR I-0000, paragraph 49).
87. Also, 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. Furthermore, any person affected by a restrictive measure based on such a derogation must have an effective judicial remedy available to them (see Sporting Exchange , paragraph 50 and case-law cited).
90. Having regard to the above, the answer to the third question is that, on a proper interpretation of Article 49 EC, where a system of prior administrative authorisation is established in a Member State as regards the supply of certain types of gambling, such a system, which derogates from the freedom to provide services guaranteed by Article 49 EC, is capable of satisfying the requirements of that latter provision only if it is based on criteria which are objective, non-discriminatory and known in advance, in such a way as to circumscribe the exercise of the national authorities’ discretion so that it is not used arbitrarily. Furthermore, any person affected by a restrictive measure based on such a derogation must have an effective judicial remedy available to them.
The fourth question
101. The Court has already had occasion to emphasise the particularities concerned with the offering of games of chance on the internet (see Liga Portuguesa de Futebol Profissional and Bwin International , paragraph 72).
102. 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).
103. It should be 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 underlined by consistent case-law.
104. Moreover, it should be noted that, having regard to the discretion which Member States enjoy in determining the level of protection of consumers and the social order in the gaming sector, it is not necessary, with regard to the criterion of proportionality, that a restrictive measure decreed by the authorities of one Member State should correspond to a view shared by all the Member States concerning the means of protecting the legitimate interest at issue (see, by analogy, Case C‑518/06 Commission  v Italy  [2009] ECR I‑3491, paragraphs 83 and 84).
106. Secondly, concerning the establishment of a transitional period such as that at issue in the main proceedings, it needs in particular to be verified whether the latter might not undermine the consistency of the legislation concerned by leading to a result contrary to the objective pursued.
110. It does not therefore appear that such a transitional period, in appearance justified by considerations of legal certainty (see, by analogy, Case C‑347/06 ASM Brescia  [2008] ECR I‑5641, paragraphs 68 to 71), is likely to affect the consistency of the measure prohibiting the offer of gambling on the internet and its suitability for achieving the objectives which it pursues (see, by analogy, in relation to a temporary exception from a prohibition on the operation of pharmacies by non‑pharmacists, Joined Cases C-171/07 and C-172/07 Apothekerkammer des Saarlandes and Others  [2009] ECR I-4171, paragraphs 45 to 50).