ORAL QUESTION for Question Time at the part-session in December 2008 pursuant to Rule 109 of the Rules of Procedure by Karin Riis-Jørgensen to the Commission
Subject: Liberalisation of the national gambling monopoly
Between 6 and 8 November 2008 in Greece (Athens and Thessaloniki), two intermediaries from a private sports betting operator licensed and regulated in the EU were arrested and detained by the Greek authorities along with three customers for violating the Greek sports betting monopoly legislation.
That legislation is already the subject of a Reasoned Opinion sent by the European Commission on 28 February 2008 in the wider context of infringement proceedings launched against 10 Member States over the last two and a half years.
Given Paragraph 73 §4(1) of the Placanica ruling by the ECJ (C-338/04) does the Commission find such arrests disproportionate?
Why is the Commission not proceeding more rigorously and referring to the ECJ countries at Reasoned Opinion level like Greece or Denmark, Sweden, Finland, and the Netherlands, which have clearly, through actions like the ones above in Greece, or through complete inaction, showed that they refuse to comply with the EU Treaty?
____________________
(1) Articles 43 EC and 49 EC must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which imposes a criminal penalty on persons such as the defendants in the main proceedings for pursuing the organised activity of collecting bets without a licence or a police authorisation as required under the national legislation, where those persons were unable to obtain licences or authorisations because that Member State, in breach of Community law, refused to grant licences or authorisations to such persons.
23 December 2008
18 December 2008
H2 Q3 eGambling Data Bulletin – Downturn to Strengthen eGaming's Hand
H2 have released their Q3 eGambling Data Bulletin based on all of the Q3 results and trading statements as well as our analysis of traffic and industry news flow until the end of November.
The covering paper concludes that:
- The eGambling Industry will be resilient but not immune to the global recession;
As some economies are in danger of collapsing during 2009 the fortunes of individual operators are difficult to call at this stage;
- eGambling is expected to strengthen its long term position as recession pushes more cash strapped governments to deregulate;
- For the first time H2 see more European Union Member States supporting eGambling rather than opposing it as debate moves to the level of taxation and establishment criteria;
- The US is now expected to move to legalise eGaming (excluding sportbetting) with federal legislation likely to permit states to opt in/out – However, legislation is not expected until the 112th Congress with no activity until 2013;
- In the meantime any effective implementation of UIGEA by December 2009 could impact the businesses of the operators that continue to accept US players.
See all of H2's 2009 forecasts on a market-by-market and product-by-product basis in the most detailed and authoritive assessment of the value and player volume of the interactive gambling industry. The summary industry dataset includes nearly 25,000 data points dating back to 1999 (with over 50 national by product splits from 2003) and forecasts out to 2012.
press release of H2
The covering paper concludes that:
- The eGambling Industry will be resilient but not immune to the global recession;
As some economies are in danger of collapsing during 2009 the fortunes of individual operators are difficult to call at this stage;
- eGambling is expected to strengthen its long term position as recession pushes more cash strapped governments to deregulate;
- For the first time H2 see more European Union Member States supporting eGambling rather than opposing it as debate moves to the level of taxation and establishment criteria;
- The US is now expected to move to legalise eGaming (excluding sportbetting) with federal legislation likely to permit states to opt in/out – However, legislation is not expected until the 112th Congress with no activity until 2013;
- In the meantime any effective implementation of UIGEA by December 2009 could impact the businesses of the operators that continue to accept US players.
See all of H2's 2009 forecasts on a market-by-market and product-by-product basis in the most detailed and authoritive assessment of the value and player volume of the interactive gambling industry. The summary industry dataset includes nearly 25,000 data points dating back to 1999 (with over 50 national by product splits from 2003) and forecasts out to 2012.
press release of H2
22 October 2008
Online betting and gaming: Opinion of the French Advocate General on the Portuguese gaming monopoly in the bwin Liga case
The European Gaming and Betting Association (EGBA) welcomes today’s opinion by the Advocate General in a betting case involving EGBA member bwin and Portuguese monopoly Santa Casa da Misericórdia (SCML) in the context of bwin’s sponsorship deal with the Portuguese professional football league.
Whereas the Gambelli and Placanica cases in 2003 and 2007 dealt with sports betting concessions in Italy, today’s conclusion by the Advocate General addresses the legitimacy of the Portuguese gambling monopoly. It is in line with the jurisprudence of Gambelli and Placanica and supports the arguments already put forward by bwin and EU licensed operators.
Answering a key question, the Advocate General stated that the extension of the monopoly to internet activities should have been notified to the European Commission and therefore will not be applicable against bwin and the Liga, and the national court must decline to apply it.
According to the French Advocate General Bot, the Portuguese monopoly on the internet may comply with Community law if certain conditions are met.
According to Sigrid Ligné, Secretary General of the EGBA: “Considering the facts in the present case, we strongly believe that those conditions are not met and that the Portuguese monopoly is not consistent with EU law”.
Former Advocate General Alber comments: “All conditions and controls can equally be fulfilled by EU licensed private operators”.
Indeed, a monopoly is not necessary to fight crime and to protect consumers as evidenced in multi-operator and regulated jurisdictions such as the United Kingdom, Malta or Austria.
Today’s opinion takes place in the context of an increasing number of requests for preliminary rulings (17 in total) to the ECJ by national courts and at a time when the Commission in parallel is to decide whether to refer a number of Member States to the ECJ over the compatibility of their gaming legislation with EC law.
This opinion is not binding on the ECJ and the EGBA expects the final ruling on the case in the beginning of 2009.
press release of EBGA, 14 October 2008
Whereas the Gambelli and Placanica cases in 2003 and 2007 dealt with sports betting concessions in Italy, today’s conclusion by the Advocate General addresses the legitimacy of the Portuguese gambling monopoly. It is in line with the jurisprudence of Gambelli and Placanica and supports the arguments already put forward by bwin and EU licensed operators.
Answering a key question, the Advocate General stated that the extension of the monopoly to internet activities should have been notified to the European Commission and therefore will not be applicable against bwin and the Liga, and the national court must decline to apply it.
According to the French Advocate General Bot, the Portuguese monopoly on the internet may comply with Community law if certain conditions are met.
According to Sigrid Ligné, Secretary General of the EGBA: “Considering the facts in the present case, we strongly believe that those conditions are not met and that the Portuguese monopoly is not consistent with EU law”.
Former Advocate General Alber comments: “All conditions and controls can equally be fulfilled by EU licensed private operators”.
Indeed, a monopoly is not necessary to fight crime and to protect consumers as evidenced in multi-operator and regulated jurisdictions such as the United Kingdom, Malta or Austria.
Today’s opinion takes place in the context of an increasing number of requests for preliminary rulings (17 in total) to the ECJ by national courts and at a time when the Commission in parallel is to decide whether to refer a number of Member States to the ECJ over the compatibility of their gaming legislation with EC law.
This opinion is not binding on the ECJ and the EGBA expects the final ruling on the case in the beginning of 2009.
press release of EBGA, 14 October 2008
23 September 2008
Portugal: Discriminatory taxation of gambling winnings?
European Commission Threatens to Refer Portugal to the ECJ
The European Commission has sent Portugal a formal request to amend its discriminatory rules that provide for the taxation of foreign lottery winnings, despite winnings from lotteries organised in Portugal being exempt from income tax.
According to the Portuguese rules, income earned in Portugal in the form of prizes or winnings from competitions, games or gambling is subject to taxation. However, an exemption applies to lottery winnings from Euromilhões e Liga dos Milhões, lotteries and games organised by the Portuguese monopoly Santa Casa da Misericórdia de Lisboa, which also carries out activities of social interest within the country.
The Commission considered that the exemption provided in the Portuguese legislation constituted a discrimination prohibited by the EC Treaty, as the favourable treatment is not open to other EU entities also carrying activities of social interest similar to Santa Casa da Misericórdia de Lisboa.
The Commission stated that taxing the winnings from foreign but not national lotteries cannot possibly be justified as a measure to avoid the damaging consequences of gambling.
The Commission therefore considers these rules to be contrary to the EC Treaty and the EEA Agreement, as they restrict the freedom to provide services. This request is in the form of a reasoned opinion, the second stage of the infringement procedure under Article 226 of the Treaty.
http://gamingintelligencegroup.com
The European Commission has sent Portugal a formal request to amend its discriminatory rules that provide for the taxation of foreign lottery winnings, despite winnings from lotteries organised in Portugal being exempt from income tax.
According to the Portuguese rules, income earned in Portugal in the form of prizes or winnings from competitions, games or gambling is subject to taxation. However, an exemption applies to lottery winnings from Euromilhões e Liga dos Milhões, lotteries and games organised by the Portuguese monopoly Santa Casa da Misericórdia de Lisboa, which also carries out activities of social interest within the country.
The Commission considered that the exemption provided in the Portuguese legislation constituted a discrimination prohibited by the EC Treaty, as the favourable treatment is not open to other EU entities also carrying activities of social interest similar to Santa Casa da Misericórdia de Lisboa.
The Commission stated that taxing the winnings from foreign but not national lotteries cannot possibly be justified as a measure to avoid the damaging consequences of gambling.
The Commission therefore considers these rules to be contrary to the EC Treaty and the EEA Agreement, as they restrict the freedom to provide services. This request is in the form of a reasoned opinion, the second stage of the infringement procedure under Article 226 of the Treaty.
http://gamingintelligencegroup.com
28 July 2008
French Council of State refers question of compatibility of a betting monopoly with Community law to the European Court of Justice
by attorney-at-law Martin Arendts, M.B.L.-HSG
In addition to the references of two Dutch supreme courts (cf. German Gaming Law updated, no. 106 and 107), the French Council of State (Conseil d’État), in its capacity as France’s supreme administrative court, has referred questions regarding the compatibility of a betting monopoly with Community law to the European Court of Justice (ECJ) for preliminary ruling (order of 9 May 2008, decision no. 287503).
The proceedings were initiated by the Malta based bookmaker ZETurf (Zeturf Limited), who sought revocation of a statutory instrument (decret no. 97-456 of 5 May 1997), which establishes a monopoly for the horse betting provider Pari Mutuel Urbain (PMU), founded in 1930, from the competent French Ministry of Agriculture. The bookmaker ZEturf, state licensed in Malta, an EU member state, argued that the betting monopoly was incompatible with Community law. As the Ministry of Agriculture showed no reaction, ZEturf filed action against this implicit refusal with the Conseil d’État on 25 November 2005.
ZEturf’s action has to be seen against the backdrop of the decision of the Tribunal de grande instance de Paris which, by decision of 8 July 2005, prohibited this bookmaker from accepting horse bets. This prohibition which was affirmed in the appeal, was repealed by a fundamental decision of the Court of Cassation (Cour de Cassation) of 10 July 2007, in particular reasoned on the basis of Community law.
The Council of State (Conseil d’État) has now decided to refer the question of compatibility of the French horse betting monopoly with Community law to the ECJ in accordance with Art. 234 EC Treaty. In this respect, the Conseil d’État asked the ECJ two questions. In essence, the Council of State inquires whether the freedom to provide services guaranteed in Art. 49 and 50 of the EC Treaty is to interpreted to the effect that it precludes a national legislation which establishes a monopoly regime in favour of a single provider, that is meant to combat crime and protect public order in a more efficient way than by less interfering action, if that regime is accompanied by a dynamic commercial policy on the part of the operator, so that a satisfactory reduction in gaming opportunities is not achieved. One aspect of this question is the necessity to be assessed as part of the proportionality test, that is the examination into alternatives to the monopoly legislation and the question as to less interfering action (considering the Rosengren decision, discussed at the oral hearing in the Case “Liga Portuguesa”- C-42/07). Another already critical point is the question whether a monopoly is legally tenable, where a monopoly undertaking, such as the economically very successfully acting operator PMU, does by no means limit gaming opportunities but seeks to increase its turnover instead. In addition to this, with his second question referred for preliminary ruling, the Conseil d’État asks whether, when assessing the justification of the impairment of the freedom to provide services, one had to take into consideration the online-offer alone or all forms of distribution.
In view of the now 16 pending proceedings for preliminary ruling relating to bets and games of chance (including three referred by national supreme courts) as well as numerous upcoming actions in infringement proceedings (after the first action against Spain for discriminatory taxation of winnings resulting from games of chance), one can now expect the ECJ to comprehensively clarify the legal questions raised.
* * *
Questions, referred to the ECJ by the Council of State:
1. Are Articles 49 and 50 of the Treaty establishing the European Community to be interpreted as precluding national legislation which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator where, although that system appears to fit the purpose of combating criminality and thus of protecting public order more effectively than would less restrictive measures, it is accompanied by a dynamic commercial policy on the part of the operator, in order to neutralise the risk of unauthorised gambling networks emerging and to channel bettors towards the lawful offer, that does not, in consequence, fully achieve the objective of reducing gambling opportunities?
2. Is it appropriate, in order to determine whether national legislation such as that in force in France, which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator, is contrary to Articles 49 and 50 of the Treaty establishing the European Community, to assess the impairment of freedom to provide services solely from the point of view of the restrictions placed on offering on-line horserace betting, or is it appropriate to take into consideration the entire horserace betting sector in whatever form it is offered and is accessible to bettors?
from: German Gaming Law updated No. 110
In addition to the references of two Dutch supreme courts (cf. German Gaming Law updated, no. 106 and 107), the French Council of State (Conseil d’État), in its capacity as France’s supreme administrative court, has referred questions regarding the compatibility of a betting monopoly with Community law to the European Court of Justice (ECJ) for preliminary ruling (order of 9 May 2008, decision no. 287503).
The proceedings were initiated by the Malta based bookmaker ZETurf (Zeturf Limited), who sought revocation of a statutory instrument (decret no. 97-456 of 5 May 1997), which establishes a monopoly for the horse betting provider Pari Mutuel Urbain (PMU), founded in 1930, from the competent French Ministry of Agriculture. The bookmaker ZEturf, state licensed in Malta, an EU member state, argued that the betting monopoly was incompatible with Community law. As the Ministry of Agriculture showed no reaction, ZEturf filed action against this implicit refusal with the Conseil d’État on 25 November 2005.
ZEturf’s action has to be seen against the backdrop of the decision of the Tribunal de grande instance de Paris which, by decision of 8 July 2005, prohibited this bookmaker from accepting horse bets. This prohibition which was affirmed in the appeal, was repealed by a fundamental decision of the Court of Cassation (Cour de Cassation) of 10 July 2007, in particular reasoned on the basis of Community law.
The Council of State (Conseil d’État) has now decided to refer the question of compatibility of the French horse betting monopoly with Community law to the ECJ in accordance with Art. 234 EC Treaty. In this respect, the Conseil d’État asked the ECJ two questions. In essence, the Council of State inquires whether the freedom to provide services guaranteed in Art. 49 and 50 of the EC Treaty is to interpreted to the effect that it precludes a national legislation which establishes a monopoly regime in favour of a single provider, that is meant to combat crime and protect public order in a more efficient way than by less interfering action, if that regime is accompanied by a dynamic commercial policy on the part of the operator, so that a satisfactory reduction in gaming opportunities is not achieved. One aspect of this question is the necessity to be assessed as part of the proportionality test, that is the examination into alternatives to the monopoly legislation and the question as to less interfering action (considering the Rosengren decision, discussed at the oral hearing in the Case “Liga Portuguesa”- C-42/07). Another already critical point is the question whether a monopoly is legally tenable, where a monopoly undertaking, such as the economically very successfully acting operator PMU, does by no means limit gaming opportunities but seeks to increase its turnover instead. In addition to this, with his second question referred for preliminary ruling, the Conseil d’État asks whether, when assessing the justification of the impairment of the freedom to provide services, one had to take into consideration the online-offer alone or all forms of distribution.
In view of the now 16 pending proceedings for preliminary ruling relating to bets and games of chance (including three referred by national supreme courts) as well as numerous upcoming actions in infringement proceedings (after the first action against Spain for discriminatory taxation of winnings resulting from games of chance), one can now expect the ECJ to comprehensively clarify the legal questions raised.
* * *
Questions, referred to the ECJ by the Council of State:
1. Are Articles 49 and 50 of the Treaty establishing the European Community to be interpreted as precluding national legislation which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator where, although that system appears to fit the purpose of combating criminality and thus of protecting public order more effectively than would less restrictive measures, it is accompanied by a dynamic commercial policy on the part of the operator, in order to neutralise the risk of unauthorised gambling networks emerging and to channel bettors towards the lawful offer, that does not, in consequence, fully achieve the objective of reducing gambling opportunities?
2. Is it appropriate, in order to determine whether national legislation such as that in force in France, which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator, is contrary to Articles 49 and 50 of the Treaty establishing the European Community, to assess the impairment of freedom to provide services solely from the point of view of the restrictions placed on offering on-line horserace betting, or is it appropriate to take into consideration the entire horserace betting sector in whatever form it is offered and is accessible to bettors?
from: German Gaming Law updated No. 110
Administrative Court of Berlin repeals prohibition order against a sports betting agent issued by the State of Berlin
Sports betting monopoly de facto terminated
by attorney-at-law Martin Arendts, M.B.L.-HSG
The Administrative Court of Berlin (Verwaltungsgericht Berlin) had already voiced fundamental doubts regarding the constitutionality of the Interstate Treaty on Gambling in several summary proceedings during the last months and has thus granted relief from judicial execution to the sports betting agents involved (cf. German Gaming Law updated No. 102). The Administrative Court of Berlin has now repealed a prohibition order issued by the State Office for Citizens’ and Police Affairs (Landesamt für Bürger- und Ordnungsangelegenheiten), holding it to be unlawful (decision of 7 July 2008, file no. VG 35 A 167.08). The claimant, represented by ARENDTS ANWÄLTE (www.gaminglaw.de), can thus continue to transfer sports bets to a bookmaker licensed in Malta, an EU member state.
This new decision involves a prohibition order of 6 March 2008 based on the Interstate Treaty on Gambling (Glücksspiel-Staatsvertrag) and the corresponding implementation act (Ausführungsgesetz zum Glücksspiel-Staatsvertrag - AG GlüStV). The detailed reasons are still due. However, as reported, the court had already voiced considerable doubts in the proceedings for relief from execution as to whether the new regulations could constitute a constitutional authority. The state sports betting monopoly, as a considerable interference with the private sports betting providers’ and agents’ right to choose their profession was not justifiable from a constitutional point of view.
The Administrative Court of Berlin explicitly allowed appeal against this decision which will have to be reviewed by the Administrative Court of Appeal of Berlin-Brandenburg (Oberverwaltungsgericht Berlin-Brandenburg). In view of the scope of the decision, which declares the Interstate Treaty on Gambling to be untenable and contrary to constitutional law, one has to assume that the State of Berlin will exhaust this legal remedy. For the time being, though, the state monopoly has de facto ended, since the market for sports betting in Berlin cannot be sealed off from bookmakers, licensed in other EU member states, anymore.
from: German Gaming Law updated No. 109
by attorney-at-law Martin Arendts, M.B.L.-HSG
The Administrative Court of Berlin (Verwaltungsgericht Berlin) had already voiced fundamental doubts regarding the constitutionality of the Interstate Treaty on Gambling in several summary proceedings during the last months and has thus granted relief from judicial execution to the sports betting agents involved (cf. German Gaming Law updated No. 102). The Administrative Court of Berlin has now repealed a prohibition order issued by the State Office for Citizens’ and Police Affairs (Landesamt für Bürger- und Ordnungsangelegenheiten), holding it to be unlawful (decision of 7 July 2008, file no. VG 35 A 167.08). The claimant, represented by ARENDTS ANWÄLTE (www.gaminglaw.de), can thus continue to transfer sports bets to a bookmaker licensed in Malta, an EU member state.
This new decision involves a prohibition order of 6 March 2008 based on the Interstate Treaty on Gambling (Glücksspiel-Staatsvertrag) and the corresponding implementation act (Ausführungsgesetz zum Glücksspiel-Staatsvertrag - AG GlüStV). The detailed reasons are still due. However, as reported, the court had already voiced considerable doubts in the proceedings for relief from execution as to whether the new regulations could constitute a constitutional authority. The state sports betting monopoly, as a considerable interference with the private sports betting providers’ and agents’ right to choose their profession was not justifiable from a constitutional point of view.
The Administrative Court of Berlin explicitly allowed appeal against this decision which will have to be reviewed by the Administrative Court of Appeal of Berlin-Brandenburg (Oberverwaltungsgericht Berlin-Brandenburg). In view of the scope of the decision, which declares the Interstate Treaty on Gambling to be untenable and contrary to constitutional law, one has to assume that the State of Berlin will exhaust this legal remedy. For the time being, though, the state monopoly has de facto ended, since the market for sports betting in Berlin cannot be sealed off from bookmakers, licensed in other EU member states, anymore.
from: German Gaming Law updated No. 109
Administrative Court of Freiburg grants sports betting agent relief from judicial execution: German sports betting monopoly in breach of Community law
by attorney-at-law Martin Arendts, M.B.L.-HSG
In four judgments rendered in main proceedings, the 1st chamber of the Administrative Court of Freiburg (Verwaltungsgericht Freiburg) just recently declared the state sports betting monopoly to be in breach of Community law and revoked prohibition orders issued by the Regional Council of Karlsruhe (decisions of 16 April 2008, file-no. K 2683/07, 1 K 2063/06, 1 K 2066/06 and 1 K 2052/06). The 3rd chamber of the Administrative Court of Freiburg has now joined this legal opinion in summary proceedings. The agent, represented by attorney-at-law Alice Wotsch of ARENDTS ANWÄLTE (www.gaminglaw.de), can thus continue to transfer sports bets to his contractor, an EU-licensed bookmaker (decision of 30 June 2008, file-no. 3 K 1113/08).
In the court’s opinion, the motion for protection is justified irrespective of the question whether the applicant is operator of the game of chance or not. The State of Baden-Württemberg’s sports betting monopoly being in breach of Community law, the agents’s interest to be spared of the consequences of judicial execution until a final decision in the main proceedings will be pronounced, prevails against the public interest in the execution. Moreover, it was not apparent, that there were currently specific dangers resulting from brokering sports bets.
from: German Gaming Law updated No. 108
In four judgments rendered in main proceedings, the 1st chamber of the Administrative Court of Freiburg (Verwaltungsgericht Freiburg) just recently declared the state sports betting monopoly to be in breach of Community law and revoked prohibition orders issued by the Regional Council of Karlsruhe (decisions of 16 April 2008, file-no. K 2683/07, 1 K 2063/06, 1 K 2066/06 and 1 K 2052/06). The 3rd chamber of the Administrative Court of Freiburg has now joined this legal opinion in summary proceedings. The agent, represented by attorney-at-law Alice Wotsch of ARENDTS ANWÄLTE (www.gaminglaw.de), can thus continue to transfer sports bets to his contractor, an EU-licensed bookmaker (decision of 30 June 2008, file-no. 3 K 1113/08).
In the court’s opinion, the motion for protection is justified irrespective of the question whether the applicant is operator of the game of chance or not. The State of Baden-Württemberg’s sports betting monopoly being in breach of Community law, the agents’s interest to be spared of the consequences of judicial execution until a final decision in the main proceedings will be pronounced, prevails against the public interest in the execution. Moreover, it was not apparent, that there were currently specific dangers resulting from brokering sports bets.
from: German Gaming Law updated No. 108
ECJ: Brokering bets not exempt from Value Added Tax pursuant to the of Sixth Council Directive 77/388/EEC
by attorney-at-law Martin Arendts, M.B.L.-HSG
The European Court of Justice (ECJ) has recently held that commissions paid to a sports betting agent is not exempt from VAT (order of 14 May 2008, Joined Cases C-231/07 and C-232/07). The Brussels Court of Appeal (Cour d’appel Bruxelles) had asked the ECJ for clarification as to whether an exemption pursuant to Art. 13 part B letter d no. 3 of the Sixth Council Directive 77/388/EEC should be considered, according to which the supply of certain financial services relating to turnovers resulting from the transfer of bets are exempt from VAT. Interpreting this directive, the ECJ declined this. The Belgian initial proceedings concerned tobacconists (“buralistes”) which accepted bets on behalf of a bookmaker and paid out the winnings to betting customers.
Operative part of the order:“
The terms 'transactions, including negotiation, concerning deposit accounts and payments' used in Article 13(B)(d)(3) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment are to be interpreted as meaning that they do not refer to the supply of services by an agent acting on behalf of a client which carries out the activity of accepting bets on horse races and other sporting events, consisting of acceptance by the agent of bets on behalf of the client, registration thereof, confirmation to the client, by presentation of the betting slip, that a bet was made, collection of funds, payment of winnings, sole assumption of liability as regards the client for management of the funds collected and for thefts and/or losses of money and receipt of remuneration in the form of commission from the client as remuneration for that activity.”
from: German Gaming Law updated No. 108
The European Court of Justice (ECJ) has recently held that commissions paid to a sports betting agent is not exempt from VAT (order of 14 May 2008, Joined Cases C-231/07 and C-232/07). The Brussels Court of Appeal (Cour d’appel Bruxelles) had asked the ECJ for clarification as to whether an exemption pursuant to Art. 13 part B letter d no. 3 of the Sixth Council Directive 77/388/EEC should be considered, according to which the supply of certain financial services relating to turnovers resulting from the transfer of bets are exempt from VAT. Interpreting this directive, the ECJ declined this. The Belgian initial proceedings concerned tobacconists (“buralistes”) which accepted bets on behalf of a bookmaker and paid out the winnings to betting customers.
Operative part of the order:“
The terms 'transactions, including negotiation, concerning deposit accounts and payments' used in Article 13(B)(d)(3) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment are to be interpreted as meaning that they do not refer to the supply of services by an agent acting on behalf of a client which carries out the activity of accepting bets on horse races and other sporting events, consisting of acceptance by the agent of bets on behalf of the client, registration thereof, confirmation to the client, by presentation of the betting slip, that a bet was made, collection of funds, payment of winnings, sole assumption of liability as regards the client for management of the funds collected and for thefts and/or losses of money and receipt of remuneration in the form of commission from the client as remuneration for that activity.”
from: German Gaming Law updated No. 108
Dutch Council of State refers legitimacy and tendering of a sports betting monopoly to the European Court of Justice for review
by attorney-at-law Martin Arendts, M.B.L.-HSG
In addition to the Dutch reference to the European Court of Justice (ECJ) by the Supreme Court of the Netherland in the case of Ladbrokes (cf. German Gaming Law updated no. 106), the Raad van State, in its capacity as the highest administrative court of the Netherlands, has referred a case to Luxembourg (decision of 14 May 2008, file-no. 200700622/1). This reference has been filed with the ECJ as Case C-203/08. The referral is based on administrative proceedings between the world’s largest betting exchange Betfair (Sporting Exchange Ltd.) and the Dutch Minister of Justice.
Hence, within one month, two last instance courts have referred questions relating to the admissibility of the Dutch sports betting monopoly to the ECJ. National last instance courts are obliged to refer Community law related preliminary questions to the ECJ, which has the monopoly on the interpretation of EU law, provided that these legal question are not yet resolved (acte clair theory). Due to these references, a planned reorganisation of the gaming law in the Netherlands was put off. It was planned i.a. to grant Holland Casinos an exclusive online gaming license.
As it was the case in several pending proceedings, there is the question of the relevance of a license issued in another Member State in this case as well. The reference by the Raad von State does, by the way, concern the tendering of a gambling license as well. In particular, Betfair applied for two gambling licenses after the Minister for Justice had refused to declare the UK based betting exchange’s access to the market to be unobjectionable. On the one hand side, Betfair applied for the 5-year sports betting license, currently held by the monopoly operator De Lotto (Stichting de Nationale Sporttotalisator), while on the other hand applying for the license currently held by Scientific Games Racing B.V. However, the Ministry took the view that the licenses were to be extended as long as the current license holder wished to continue.
Betfair considered this to be in breach of Community law and an undue discrimination and, in particular, invoked the freedom to provide services as guaranteed by the EC Treaty. Commenting on the reference order, Betfair pointed to the fact that I was a strictly regulated, tax paying, UK based company which was a global leader in terms of fraud prevention and customer protection. One should therefore allow fair competition within the EU.
The Raad von State referred following questions to the ECJ :
1. Should Article 49 EC be interpreted as meaning that, where a closed licensing system is applied in a Member State to the provision of services relating to games of chance, the application of that article precludes the competent authority of that Member State from prohibiting a service provider to whom a licence has already been granted in another Member State to provide those services via the internet from also offering those services via the internet in the first Member State?
2. Is the interpretation which the Court of Justice has given to Article 49 EC, and in particular to the principle of equality and the duty of transparency arising therefrom, in a number of individual cases concerning concessions applicable to the procedure for the granting of a licence to offer services relating to games of chance under a statutorily established single-licence system?
3. (a) Under a statutorily established single-licence system, can the extension of the licence of the existing licence-holder, without potential applicants being given an opportunity to compete for that licence, be a suitable and proportionate means of meeting the imperative requirements in the general interest which the Court of Justice has recognised as justifying restriction of the freedom to provide services in respect of games of chance? If so, under what conditions?
(b). Does it make a difference to the answer to Question 3(a) whether Question 2 is answered in the affirmative or the negative?
from: German Gaming Law updated No. 107
In addition to the Dutch reference to the European Court of Justice (ECJ) by the Supreme Court of the Netherland in the case of Ladbrokes (cf. German Gaming Law updated no. 106), the Raad van State, in its capacity as the highest administrative court of the Netherlands, has referred a case to Luxembourg (decision of 14 May 2008, file-no. 200700622/1). This reference has been filed with the ECJ as Case C-203/08. The referral is based on administrative proceedings between the world’s largest betting exchange Betfair (Sporting Exchange Ltd.) and the Dutch Minister of Justice.
Hence, within one month, two last instance courts have referred questions relating to the admissibility of the Dutch sports betting monopoly to the ECJ. National last instance courts are obliged to refer Community law related preliminary questions to the ECJ, which has the monopoly on the interpretation of EU law, provided that these legal question are not yet resolved (acte clair theory). Due to these references, a planned reorganisation of the gaming law in the Netherlands was put off. It was planned i.a. to grant Holland Casinos an exclusive online gaming license.
As it was the case in several pending proceedings, there is the question of the relevance of a license issued in another Member State in this case as well. The reference by the Raad von State does, by the way, concern the tendering of a gambling license as well. In particular, Betfair applied for two gambling licenses after the Minister for Justice had refused to declare the UK based betting exchange’s access to the market to be unobjectionable. On the one hand side, Betfair applied for the 5-year sports betting license, currently held by the monopoly operator De Lotto (Stichting de Nationale Sporttotalisator), while on the other hand applying for the license currently held by Scientific Games Racing B.V. However, the Ministry took the view that the licenses were to be extended as long as the current license holder wished to continue.
Betfair considered this to be in breach of Community law and an undue discrimination and, in particular, invoked the freedom to provide services as guaranteed by the EC Treaty. Commenting on the reference order, Betfair pointed to the fact that I was a strictly regulated, tax paying, UK based company which was a global leader in terms of fraud prevention and customer protection. One should therefore allow fair competition within the EU.
The Raad von State referred following questions to the ECJ :
1. Should Article 49 EC be interpreted as meaning that, where a closed licensing system is applied in a Member State to the provision of services relating to games of chance, the application of that article precludes the competent authority of that Member State from prohibiting a service provider to whom a licence has already been granted in another Member State to provide those services via the internet from also offering those services via the internet in the first Member State?
2. Is the interpretation which the Court of Justice has given to Article 49 EC, and in particular to the principle of equality and the duty of transparency arising therefrom, in a number of individual cases concerning concessions applicable to the procedure for the granting of a licence to offer services relating to games of chance under a statutorily established single-licence system?
3. (a) Under a statutorily established single-licence system, can the extension of the licence of the existing licence-holder, without potential applicants being given an opportunity to compete for that licence, be a suitable and proportionate means of meeting the imperative requirements in the general interest which the Court of Justice has recognised as justifying restriction of the freedom to provide services in respect of games of chance? If so, under what conditions?
(b). Does it make a difference to the answer to Question 3(a) whether Question 2 is answered in the affirmative or the negative?
from: German Gaming Law updated No. 107
27 July 2008
Court of Appeal of Munich enjoins the Free State of Bavaria from illegal gambling advertisement -
State monopoly operators in breach of Interstate Treaty on Gambling
by attorney-at-law Martin Arendts, M.B.L.-HSG
The Centre for Protection against Unfair Competition (Wettbewerbszentrale) recently won a court suit in the second instance against the Free State of Bavaria who offers sports betting and games of chance commercially via its State Lottery Administration (Staatliche Lotterieverwaltung), which is a member of Deutscher Lotto- und Totoblock, the cartel of the monopoly operators. The Court of Appeal of Munich (Oberlandesgericht München) enjoined the Free State of Bavaria from unfair advertisements with regard to three different circumstances (decision of 22 April 2008, file-no. 29 W 1211/08 - not yet final).
According to the holding of the Court of Appeal of Munich, the advertisement challenged by Wettbewerbszentrale, which contains statements like “Join the game” and ”Lotto … current Jackpot: about 18 Mill. Euros”, unduly pushes the amount to be won in each following draw to the fore. Such an advertisement is in breach of sec. 5 (1) of the Interstate Treaty on Gambling (Glücksspiel-Staatsvertrag). Pursuant to this provision, in order to avoid the character of an incitement, advertisement for public games of chance must be confined to information and education on the options of taking part in games of chance.
Relating to this decision, attorney-at-law Dr. Andreas Ottofülling of the Centre for Protection against Unfair Competition explains: “It clearly shows that the Free State of Bavaria as operator of the lottery did not comply with the principles of advertisement set up by himself. The state cannot justify the monopoly on lotteries with the need to protect the citizens from gambling addiction on the one hand side and on the other hand boldly incite to participate in games of chance himself. “
The authorities’ pleading that the state lottery operators had substantially adjusted and retrenched their advertisement in view of the requirements set forth by the Federal Constitutional Court, is obviously not tenable in view of this decision. There is not only a clear regulatory deficit (as accurately pointed out by the Administrative Court of Berlin), but also a serious enforcement deficit remaining. Contrary to the requirements set forth by the Federal Constitutional Court, there is no independent supervision of the state operators, by which the monopoly operators’ illegal behaviour could be controlled.
The reasoning of the Court of Appeal of Munich for this decision have now been published (MD 2008, p. 709 et seq.). With regards to the Free State of Bavaria’s unfair advertisement practices the court explains:
“The newspaper advertisement pushes the amount to be won in the next draw to the fore as an eye catcher. Information other than this circumstance accounting for the particular attractivity of a participation in the game is only provided in considerably smaller script. There is a blatant imbalance between highlighting the amount to win and mentioning the danger of addiction and the low probability of winning, which does hardly show up in comparison. This imbalance of the advertisement, which results from one-sidedly highlighting the chance of a particularly high win, provides an increased incentive to participate in the lottery for people addressed by the advertisement. The informative and educational content which is allowed pursuant to sec. 5 (1) Interstate Treaty on Gambling is clearly only second to the presentation as advertisement with incitement to participate. This is in breach of sec. 5 (1), 5 (2) sentence 1 Interstate Treaty on Gambling.
The two other forms of advertisement (billboard and cover ads) have the character of the forbidden form of incitement even more, as they do not even contain minor disclaimers pointing to circumstances against the participation in the game, but places the amount to be won in a unique position. Doing so they are even in breach of no. 2 of the requirement of the directive for the prevention of- and fight against gaming addiction (Annex to the Interstate Treaty on Gambling), pursuant to which the information about the jackpot is to be combined with an information on the probability of winnings and losses. (…)
Regarding the advertisement on the cover of the magazine, one has to add, that, when assessing the determining general impression that the advertisement has on the relevant public it addressed, one has to consider the design of the rest of the cover – in particular the title “Join the game” also designed as an eye catcher – as well. Together with the title held in form of a command, highlighting the possible win does not only incite to participate in the game but also has a requesting effect.”
from: German Gaming Law updated No. 105
by attorney-at-law Martin Arendts, M.B.L.-HSG
The Centre for Protection against Unfair Competition (Wettbewerbszentrale) recently won a court suit in the second instance against the Free State of Bavaria who offers sports betting and games of chance commercially via its State Lottery Administration (Staatliche Lotterieverwaltung), which is a member of Deutscher Lotto- und Totoblock, the cartel of the monopoly operators. The Court of Appeal of Munich (Oberlandesgericht München) enjoined the Free State of Bavaria from unfair advertisements with regard to three different circumstances (decision of 22 April 2008, file-no. 29 W 1211/08 - not yet final).
According to the holding of the Court of Appeal of Munich, the advertisement challenged by Wettbewerbszentrale, which contains statements like “Join the game” and ”Lotto … current Jackpot: about 18 Mill. Euros”, unduly pushes the amount to be won in each following draw to the fore. Such an advertisement is in breach of sec. 5 (1) of the Interstate Treaty on Gambling (Glücksspiel-Staatsvertrag). Pursuant to this provision, in order to avoid the character of an incitement, advertisement for public games of chance must be confined to information and education on the options of taking part in games of chance.
Relating to this decision, attorney-at-law Dr. Andreas Ottofülling of the Centre for Protection against Unfair Competition explains: “It clearly shows that the Free State of Bavaria as operator of the lottery did not comply with the principles of advertisement set up by himself. The state cannot justify the monopoly on lotteries with the need to protect the citizens from gambling addiction on the one hand side and on the other hand boldly incite to participate in games of chance himself. “
The authorities’ pleading that the state lottery operators had substantially adjusted and retrenched their advertisement in view of the requirements set forth by the Federal Constitutional Court, is obviously not tenable in view of this decision. There is not only a clear regulatory deficit (as accurately pointed out by the Administrative Court of Berlin), but also a serious enforcement deficit remaining. Contrary to the requirements set forth by the Federal Constitutional Court, there is no independent supervision of the state operators, by which the monopoly operators’ illegal behaviour could be controlled.
The reasoning of the Court of Appeal of Munich for this decision have now been published (MD 2008, p. 709 et seq.). With regards to the Free State of Bavaria’s unfair advertisement practices the court explains:
“The newspaper advertisement pushes the amount to be won in the next draw to the fore as an eye catcher. Information other than this circumstance accounting for the particular attractivity of a participation in the game is only provided in considerably smaller script. There is a blatant imbalance between highlighting the amount to win and mentioning the danger of addiction and the low probability of winning, which does hardly show up in comparison. This imbalance of the advertisement, which results from one-sidedly highlighting the chance of a particularly high win, provides an increased incentive to participate in the lottery for people addressed by the advertisement. The informative and educational content which is allowed pursuant to sec. 5 (1) Interstate Treaty on Gambling is clearly only second to the presentation as advertisement with incitement to participate. This is in breach of sec. 5 (1), 5 (2) sentence 1 Interstate Treaty on Gambling.
The two other forms of advertisement (billboard and cover ads) have the character of the forbidden form of incitement even more, as they do not even contain minor disclaimers pointing to circumstances against the participation in the game, but places the amount to be won in a unique position. Doing so they are even in breach of no. 2 of the requirement of the directive for the prevention of- and fight against gaming addiction (Annex to the Interstate Treaty on Gambling), pursuant to which the information about the jackpot is to be combined with an information on the probability of winnings and losses. (…)
Regarding the advertisement on the cover of the magazine, one has to add, that, when assessing the determining general impression that the advertisement has on the relevant public it addressed, one has to consider the design of the rest of the cover – in particular the title “Join the game” also designed as an eye catcher – as well. Together with the title held in form of a command, highlighting the possible win does not only incite to participate in the game but also has a requesting effect.”
from: German Gaming Law updated No. 105
22 July 2008
Supreme Court of the Netherlands refers sports betting monopoly to the European Court of Justice for review
by attorney-at-law Martin Arendts, M.B.L.-HSG
The Supreme Court of the Netherlands (Hoge Raad der Nederlanden), the highest Dutch court for civil and criminal cases, referred a case regarding the cross-border offer of sports betting to the European Court of Justice (ECJ) for preliminary ruling. The referral is based on proceedings between the private bookmaker Ladbrokes and the Dutch gambling monopoly operator De Lotto. In 2002 Ladbrokes was restricted from accepting sports bets from Dutch citizens.
The Hoge Raad referred three questions to the ECJ:
• First, the court request to know whether under European law is it allowed to make the offering of gambling attractive through the introduction of new games and through advertising in order to keep (potential) gamblers away from illegal offerings?
• Moreover, the Dutch court asks whether the national judge has to decide in every case whether the application of the national gambling policy (e.g. in this case an order to block a website) is justified in each specific case?
• Finally, the court inquires about the relevance of a license issued in another Member State: Can a Member State, on the basis of a closed licensing system, prevent the offering of gambling via the Internet by an operator who is licensed in another Member State?
Irrespective of this referral, the European Commission has already instigated two infringement proceedings against the Netherlands (IP/06/436 and IP/08/330). In the first proceedings, in which the reasoned opinion of the European Commission has already been served, an action against the Netherlands could now be filed with the ECJ.
By reference of the present case to the ECJ, there will be 16 preliminary ruling proceedings pending (eight of which were referred by German administrative courts relating to the critical factual and legal situation in Germany). Most recently, that is during the current year, the Administrative Court of Schleswig (German Gaming Law updated no. 94), the Regional Court of Porto (German Gaming Law updated no. 100), the County Court of Linz (German Gaming Law updated no. 101) and the Greek Symvoulio tis Epikrateias (German Gaming Law updated no. 103) have referred betting and gambling cases to the ECJ.
from: German Gaming Law updated No. 106
The Supreme Court of the Netherlands (Hoge Raad der Nederlanden), the highest Dutch court for civil and criminal cases, referred a case regarding the cross-border offer of sports betting to the European Court of Justice (ECJ) for preliminary ruling. The referral is based on proceedings between the private bookmaker Ladbrokes and the Dutch gambling monopoly operator De Lotto. In 2002 Ladbrokes was restricted from accepting sports bets from Dutch citizens.
The Hoge Raad referred three questions to the ECJ:
• First, the court request to know whether under European law is it allowed to make the offering of gambling attractive through the introduction of new games and through advertising in order to keep (potential) gamblers away from illegal offerings?
• Moreover, the Dutch court asks whether the national judge has to decide in every case whether the application of the national gambling policy (e.g. in this case an order to block a website) is justified in each specific case?
• Finally, the court inquires about the relevance of a license issued in another Member State: Can a Member State, on the basis of a closed licensing system, prevent the offering of gambling via the Internet by an operator who is licensed in another Member State?
Irrespective of this referral, the European Commission has already instigated two infringement proceedings against the Netherlands (IP/06/436 and IP/08/330). In the first proceedings, in which the reasoned opinion of the European Commission has already been served, an action against the Netherlands could now be filed with the ECJ.
By reference of the present case to the ECJ, there will be 16 preliminary ruling proceedings pending (eight of which were referred by German administrative courts relating to the critical factual and legal situation in Germany). Most recently, that is during the current year, the Administrative Court of Schleswig (German Gaming Law updated no. 94), the Regional Court of Porto (German Gaming Law updated no. 100), the County Court of Linz (German Gaming Law updated no. 101) and the Greek Symvoulio tis Epikrateias (German Gaming Law updated no. 103) have referred betting and gambling cases to the ECJ.
from: German Gaming Law updated No. 106
21 July 2008
French Council of State refers Zeturf case to ECJ
Reference for a preliminary ruling from the Conseil d'État (France) lodged on 21 May 2008
(Case C-212/08)
Language of the case: French
Referring court
Conseil d'État
Parties to the main proceedings
Applicant: Société Zeturf Limited
Defendants: Premier ministre, Ministre de l'Agriculture et de la Pêche, Ministre de l'Intérieur, de l'Outre-mer et des Collectivités territoriales, Ministre de l'Économie, de l'Industrie et de l'Emploi - intervening party: G.I.E. Pari Mutuel Urbain (PMU)
Questions referred
Are Articles 49 and 50 of the Treaty establishing the European Community to be interpreted as precluding national legislation which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator where, although that system appears to fit the purpose of combating criminality and thus of protecting public order more effectively than would less restrictive measures, it is accompanied by a dynamic commercial policy on the part of the operator, in order to neutralise the risk of unauthorised gambling networks emerging and to channel bettors towards the lawful offer, that does not, in consequence, fully achieve the objective of reducing gambling opportunities?
Is it appropriate, in order to determine whether national legislation such as that in force in France, which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator, is contrary to Articles 49 and 50 of the Treaty establishing the European Community, to assess the impairment of freedom to provide services solely from the point of view of the restrictions placed on offering on-line horserace betting, or is it appropriate to take into consideration the entire horserace betting sector in whatever form it is offered and is accessible to bettors?
(Case C-212/08)
Language of the case: French
Referring court
Conseil d'État
Parties to the main proceedings
Applicant: Société Zeturf Limited
Defendants: Premier ministre, Ministre de l'Agriculture et de la Pêche, Ministre de l'Intérieur, de l'Outre-mer et des Collectivités territoriales, Ministre de l'Économie, de l'Industrie et de l'Emploi - intervening party: G.I.E. Pari Mutuel Urbain (PMU)
Questions referred
Are Articles 49 and 50 of the Treaty establishing the European Community to be interpreted as precluding national legislation which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator where, although that system appears to fit the purpose of combating criminality and thus of protecting public order more effectively than would less restrictive measures, it is accompanied by a dynamic commercial policy on the part of the operator, in order to neutralise the risk of unauthorised gambling networks emerging and to channel bettors towards the lawful offer, that does not, in consequence, fully achieve the objective of reducing gambling opportunities?
Is it appropriate, in order to determine whether national legislation such as that in force in France, which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator, is contrary to Articles 49 and 50 of the Treaty establishing the European Community, to assess the impairment of freedom to provide services solely from the point of view of the restrictions placed on offering on-line horserace betting, or is it appropriate to take into consideration the entire horserace betting sector in whatever form it is offered and is accessible to bettors?
European Court of Justice to decide on the applicability of Community procurement law on casino licenses
by attorney-at-law Martin Arendts, M.B.L.-HSG
After the Austrian regional court of Linz’s reference for preliminary ruling regarding the monopoly on casinos (cf. German Gaming Law updated no. 101) other proceedings regarding the licensing procedure for casinos have just recently been referred to the European Court of Justice (ECJ) for preliminary ruling, this time from Greece (Case C-145/08 – „Club Hotel Loutraki“). The reference for preliminary ruling by the Symvoulio tis Epikrateias involves the question whether Community procurement law (here Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts - Procurement Directive) is applicable to the licensing of casinos and the exploitation of such a license.
The questions for preliminary ruling referred by the Greek court sound technical at first, but have considerable practical repercussions. If the Directive relating to the coordination of procedures for the award of public service contracts (Procurement Directive) is applicable, the licenses in question would be subject to an EU-wide tender procedure before being awarded. The ECJ’s decision could challenge the current licensing system for casinos in several Member States, particularly in Germany and Austria.
The first two questions referred by the Greek court relate to the award and the procurement of a casino license. The court wants to know, whether the relevant directives are applicable to such a licensing contract:
• Does a contract by which the contracting authority entrusts to the contracting undertaking the management of a casino business and the execution of a development plan consisting in the upgrading of the casino premises and the commercial exploitation of the possibilities offered by the casino's licence, and which contains a term under which the contracting authority is obliged to pay the contracting undertaking compensation should another casino lawfully operate in the wider area in which the casino in question operates, constitute a concession, not governed by Directive 92/50/EEC?
• If the first question referred for a preliminary ruling is answered in the negative: does a legal action which is brought by persons who have participated in the procedure for the award of a public contract of mixed form providing inter alia for the supply of services subject to Annex I B to Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209), and in which they plead breach of the principle of equal treatment of participants in tender procedures (a principle affirmed by Article 3(2) of that directive), fall within the field of application of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395), or is its application precluded inasmuch as, in accordance with Article 9 of Directive 92/50/EEC, only Articles 14 and 16 of the latter apply to the procedure for the award of the abovementioned contract for the supply of services?
Two further questions relate to the procedural situation (filing for remedy, the affected undertakings’ right to set out their views).
Should the ECJ affirm the applicability of the Procurement Directive, the strict rules of Community procurement law would have to be observed. In particular, the Procurement Directive provides for the grounds, on which a tenderer may be excluded and for the assessment of the tenderer’s financial and economic capacity. A third category of provisions is in relation to the tenderer’s technical capacity. The second referred question explicitly bears upon the principle of equal treatment of participants to a tender.
from: German Gaming Law updated No. 103
After the Austrian regional court of Linz’s reference for preliminary ruling regarding the monopoly on casinos (cf. German Gaming Law updated no. 101) other proceedings regarding the licensing procedure for casinos have just recently been referred to the European Court of Justice (ECJ) for preliminary ruling, this time from Greece (Case C-145/08 – „Club Hotel Loutraki“). The reference for preliminary ruling by the Symvoulio tis Epikrateias involves the question whether Community procurement law (here Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts - Procurement Directive) is applicable to the licensing of casinos and the exploitation of such a license.
The questions for preliminary ruling referred by the Greek court sound technical at first, but have considerable practical repercussions. If the Directive relating to the coordination of procedures for the award of public service contracts (Procurement Directive) is applicable, the licenses in question would be subject to an EU-wide tender procedure before being awarded. The ECJ’s decision could challenge the current licensing system for casinos in several Member States, particularly in Germany and Austria.
The first two questions referred by the Greek court relate to the award and the procurement of a casino license. The court wants to know, whether the relevant directives are applicable to such a licensing contract:
• Does a contract by which the contracting authority entrusts to the contracting undertaking the management of a casino business and the execution of a development plan consisting in the upgrading of the casino premises and the commercial exploitation of the possibilities offered by the casino's licence, and which contains a term under which the contracting authority is obliged to pay the contracting undertaking compensation should another casino lawfully operate in the wider area in which the casino in question operates, constitute a concession, not governed by Directive 92/50/EEC?
• If the first question referred for a preliminary ruling is answered in the negative: does a legal action which is brought by persons who have participated in the procedure for the award of a public contract of mixed form providing inter alia for the supply of services subject to Annex I B to Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209), and in which they plead breach of the principle of equal treatment of participants in tender procedures (a principle affirmed by Article 3(2) of that directive), fall within the field of application of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395), or is its application precluded inasmuch as, in accordance with Article 9 of Directive 92/50/EEC, only Articles 14 and 16 of the latter apply to the procedure for the award of the abovementioned contract for the supply of services?
Two further questions relate to the procedural situation (filing for remedy, the affected undertakings’ right to set out their views).
Should the ECJ affirm the applicability of the Procurement Directive, the strict rules of Community procurement law would have to be observed. In particular, the Procurement Directive provides for the grounds, on which a tenderer may be excluded and for the assessment of the tenderer’s financial and economic capacity. A third category of provisions is in relation to the tenderer’s technical capacity. The second referred question explicitly bears upon the principle of equal treatment of participants to a tender.
from: German Gaming Law updated No. 103
20 July 2008
Discriminatory taxation of gambling winnings: European Commission brings action against Spain
First action relating to cross-border gambling in the course of pending infringement proceedings
By attorney-at-law Martin Arendts, M.B.L.-HSG
The barriers against the cross-border offering of sports betting and gambling erected by the EU (and EEA) Member States have been under strict scrutiny by the European Commission for several years. The Commission judges numerous national provisions to be in breach of Community law and has therefore already initiated infringement proceedings against several Member States, including Germany (two proceedings, one relating to the sports betting monopoly and one relating to the new Interstate Treaty on Gambling) and Austria. In one of these proceedings, and after preliminary steps to no avail (letter of formal notice by the Commission, statement by the government) the Commission has now filed suit against the Kingdom of Spain with the European Court of Justice (Case C-153/08). So far, the Commission had brought action only against Italy four years ago for procuring horse betting licenses without an invitation to tender and obtained a positive decision of the ECJ (Case C-260/04).
In its statement of claim against Spain, the European Commission invokes discriminatory taxation in breach of Community law. Pursuant to the Spanish tax provisions, winnings from lotteries and betting organised by the Loterías y Apuestas del Estado (the Spanish public-law body in charge of lotteries and betting) or by bodies or entities of the Comunidades Autónomas (Autonomous Communities comparable to the German states) as well as winnings from lotteries organised by the Spanish Red Cross or ONCE (Organización Nacional de Ciegos Españoles, the national association for the Spanish blind persons) are exempt from income tax. However, income from lotteries, games or betting organised by other national bodies or by foreign bodies, including those established in Member States of the EU or the EEA is added to the taxable amount and subject to progressive rates of taxation.
Relying in particular on the relevant ECJ case-law relating to the taxation of games of chance, the Lindman decision (Case C-42/02), as well as the Safir decison (Case C-118/96, concerning the taxation of life insurances), the Commission points out that, according to the settled case-law of the ECJ, the organising of lotteries is to be regarded as a "service" for the purposes of the EC Treaty. Also, according to that case-law, Article 49 EC Treaty prohibits any restriction on the freedom to provide services, or any obstacle to that freedom - even where such a restriction or obstacle applies equally to national providers of services and to those of the other Member States - and precludes the application of any rule of national law the effect of which is to make it more difficult to provide services between Member States than to provide services wholly within a particular Member State. Given the particular features of the gaming sector, the case-law accepts certain restrictions imposed by Member States, provided that such measures can be shown to be appropriate and proportionate, as well as non-discriminatory.
The Commission maintains that the Spanish legislation is discriminatory because entities of other Member States are excluded from the benefit of that tax exemption. Even if the Spanish authorities had shown, in the course of the infringement proceedings, that the legislation at issue is a measure which is appropriate and proportionate to the stated objective of protecting consumers and public order - which they have failed to do - the legislation at issue could not in any circumstances be regarded as compatible with Community law, in so far as it is wholly discriminatory.
Deciding this case, the ECJ will therefore have to clarify the scope of the rule of non-discrimination relating to the cross-border offering of gambling and sports betting services. It is the opinion of most German authorities, for example, that licensing only one operator of games of chance, which is to a significant part owned by the state or a federal state (Land) and completely banning operators from other Member States (via the internet or via receiving offices in Germany) is not discriminatory. However, the scope of the rule of non-discrimination is much broader. The ECJ held any rule of law to be discriminating if it makes it more difficult to provide services between Member States (cross-border) than to provide services wholly within a particular Member State.
After bringing this first action for infringement, one can assume that the European Commission will bring actions against the other Member States involved as well, provided that they cannot clear away the Commission’s objections and shape their national law in conformity with Community law respectively.
from: German Gaming Law updated No. 104
By attorney-at-law Martin Arendts, M.B.L.-HSG
The barriers against the cross-border offering of sports betting and gambling erected by the EU (and EEA) Member States have been under strict scrutiny by the European Commission for several years. The Commission judges numerous national provisions to be in breach of Community law and has therefore already initiated infringement proceedings against several Member States, including Germany (two proceedings, one relating to the sports betting monopoly and one relating to the new Interstate Treaty on Gambling) and Austria. In one of these proceedings, and after preliminary steps to no avail (letter of formal notice by the Commission, statement by the government) the Commission has now filed suit against the Kingdom of Spain with the European Court of Justice (Case C-153/08). So far, the Commission had brought action only against Italy four years ago for procuring horse betting licenses without an invitation to tender and obtained a positive decision of the ECJ (Case C-260/04).
In its statement of claim against Spain, the European Commission invokes discriminatory taxation in breach of Community law. Pursuant to the Spanish tax provisions, winnings from lotteries and betting organised by the Loterías y Apuestas del Estado (the Spanish public-law body in charge of lotteries and betting) or by bodies or entities of the Comunidades Autónomas (Autonomous Communities comparable to the German states) as well as winnings from lotteries organised by the Spanish Red Cross or ONCE (Organización Nacional de Ciegos Españoles, the national association for the Spanish blind persons) are exempt from income tax. However, income from lotteries, games or betting organised by other national bodies or by foreign bodies, including those established in Member States of the EU or the EEA is added to the taxable amount and subject to progressive rates of taxation.
Relying in particular on the relevant ECJ case-law relating to the taxation of games of chance, the Lindman decision (Case C-42/02), as well as the Safir decison (Case C-118/96, concerning the taxation of life insurances), the Commission points out that, according to the settled case-law of the ECJ, the organising of lotteries is to be regarded as a "service" for the purposes of the EC Treaty. Also, according to that case-law, Article 49 EC Treaty prohibits any restriction on the freedom to provide services, or any obstacle to that freedom - even where such a restriction or obstacle applies equally to national providers of services and to those of the other Member States - and precludes the application of any rule of national law the effect of which is to make it more difficult to provide services between Member States than to provide services wholly within a particular Member State. Given the particular features of the gaming sector, the case-law accepts certain restrictions imposed by Member States, provided that such measures can be shown to be appropriate and proportionate, as well as non-discriminatory.
The Commission maintains that the Spanish legislation is discriminatory because entities of other Member States are excluded from the benefit of that tax exemption. Even if the Spanish authorities had shown, in the course of the infringement proceedings, that the legislation at issue is a measure which is appropriate and proportionate to the stated objective of protecting consumers and public order - which they have failed to do - the legislation at issue could not in any circumstances be regarded as compatible with Community law, in so far as it is wholly discriminatory.
Deciding this case, the ECJ will therefore have to clarify the scope of the rule of non-discrimination relating to the cross-border offering of gambling and sports betting services. It is the opinion of most German authorities, for example, that licensing only one operator of games of chance, which is to a significant part owned by the state or a federal state (Land) and completely banning operators from other Member States (via the internet or via receiving offices in Germany) is not discriminatory. However, the scope of the rule of non-discrimination is much broader. The ECJ held any rule of law to be discriminating if it makes it more difficult to provide services between Member States (cross-border) than to provide services wholly within a particular Member State.
After bringing this first action for infringement, one can assume that the European Commission will bring actions against the other Member States involved as well, provided that they cannot clear away the Commission’s objections and shape their national law in conformity with Community law respectively.
from: German Gaming Law updated No. 104
18 July 2008
Administrative Court of Berlin once again grants relief from judicial execution to a sports betting agent
by attorney-at-law Martin Arendts, M.B.L.-HSG
The Administrative Court of Berlin (Verwaltungsgericht Berlin) has once again expressed fundamental constitutional objections against the Interstate Treaty on Gambling (Glücksspiel-Staatsvertrag) and thus granted relief from judicial execution to a sports betting agent (decision of 5 May 2008, case-no. VG 35 A 108.08). The agent, represented by ARENDTS ANWÄLTE (www.gaminglaw.de), may thus continue to transfer sports bets to a private bookmaker, state licensed in Malta, an EU member state.
The Administrative Court thus continues its jurisprudence of now granting relief from judicial execution after the transitional period, set by the Federal Constitutional Court (Bundesverfassungsgericht) in its landmark sports betting decision of 28 March 2006, expired at the end of 2007. In proceedings for amendment (pursuant to sec. 80 par. 7 of the regulations governing administrative courts, VwGO), the court has just recently granted relief from judicial execution against a prohibition order dating back to the year 2007 (decision of 2 April 2008, case-no. VG 35 A 52/08), a decision it refused to render last year.
The new decision pertains to a prohibition order of 6 March 2008, issued on the basis of the new Interstate Treaty on Gambling and the relevant implementation act of the State of Berlin (AG GlüStV). In its decision, the court argues the current diverging jurisprudence very comprehensively and voices severe doubts as to whether the new provisions provided a constitutional authority for the prohibition order. According to the court, the state sports betting monopoly constituted a severe interference with the private sports betting operators’ and agents’ freedom to choose their profession and could probably not be justified. In view of the drastic constitutional objections, there was no need to discuss an infringement of the freedom of establishment and the freedom to provide services, as guaranteed by the EC Treaty, anymore (p. 34).
The exclusion of private sports betting operators constituted a material interference with the freedom to choose one’s profession. According to the doctrine of substantiality the (parliamentary) legislator did not only have to enact a legal basis for the monopoly, but sufficient structural and legal specifications (as demanded by the Federal Constitutional Court in its fundamental sports betting decision of 28 March 2006) as well. The legislator was obliged to enact at least the basic structure as to type and customisation of sports bets. The regulation as demanded by the Federal Constitutional Court must not be left to the executive (p. 10).
Total consistency was now necessary after the expiration of the transitional period (p. 7). Therefore, there was no room for an additional transitional period as provided for by sec. 25 (1) of the Interstate Treaty on Gambling. After the expiration of the transitional period one now had to take a holistic look at the entire gambling sector (p. 32). However, there were only rudimentary substantial criteria as to type and customisation of the sports bets. Moreover it was not apparent that the legislator acted on the distribution of sports bets in accordance with the requirements set forth by the Federal Constitutional Court. Sports bets were continued to be marketed as “an everyday merchandise” (as expressly criticised by the Federal Constitutional Court). In particular the Administrative Court has a critical view on the tight net of receiving offices. In this respect, no re-organisation of this legal and factual structure as criticised by the Federal Constitutional Court was apparent (p. 13).
In addition, there were considerable doubts, whether the requirements for players’ protection were sufficiently respected in adopting and structuring the monopoly. Stake ceiling was not provided for by law (p. 27). Finally, doubts still persisted as to whether financial interests were not continued to be pursued by this re-organisation. After all, fiscal interests were pointed out as being material during the legislative procedure.
The Administrative Court of Berlin does not consider it necessary to mandate conditions in order to grant relief from judicial execution, as recently ordered by the Administrative Court of Kassel (followed by the Administrative Court of Trier) and the Administrative Court of Munich (cf. German Gaming Law updated no. 99 and 100). Specific dangers really emanating from the operator or the agent could be addressed by issuing a prohibition order under trade law (p. 37).
The Administrative Court of Berlin also granted relief with regards to the high administrative fee (EUR 2.000,-). The requirements for charging the fee were not fulfilled. Upon summary examination, the court did not find a case of illegal gambling.
from: German Gaming Law updated No. 102
The Administrative Court of Berlin (Verwaltungsgericht Berlin) has once again expressed fundamental constitutional objections against the Interstate Treaty on Gambling (Glücksspiel-Staatsvertrag) and thus granted relief from judicial execution to a sports betting agent (decision of 5 May 2008, case-no. VG 35 A 108.08). The agent, represented by ARENDTS ANWÄLTE (www.gaminglaw.de), may thus continue to transfer sports bets to a private bookmaker, state licensed in Malta, an EU member state.
The Administrative Court thus continues its jurisprudence of now granting relief from judicial execution after the transitional period, set by the Federal Constitutional Court (Bundesverfassungsgericht) in its landmark sports betting decision of 28 March 2006, expired at the end of 2007. In proceedings for amendment (pursuant to sec. 80 par. 7 of the regulations governing administrative courts, VwGO), the court has just recently granted relief from judicial execution against a prohibition order dating back to the year 2007 (decision of 2 April 2008, case-no. VG 35 A 52/08), a decision it refused to render last year.
The new decision pertains to a prohibition order of 6 March 2008, issued on the basis of the new Interstate Treaty on Gambling and the relevant implementation act of the State of Berlin (AG GlüStV). In its decision, the court argues the current diverging jurisprudence very comprehensively and voices severe doubts as to whether the new provisions provided a constitutional authority for the prohibition order. According to the court, the state sports betting monopoly constituted a severe interference with the private sports betting operators’ and agents’ freedom to choose their profession and could probably not be justified. In view of the drastic constitutional objections, there was no need to discuss an infringement of the freedom of establishment and the freedom to provide services, as guaranteed by the EC Treaty, anymore (p. 34).
The exclusion of private sports betting operators constituted a material interference with the freedom to choose one’s profession. According to the doctrine of substantiality the (parliamentary) legislator did not only have to enact a legal basis for the monopoly, but sufficient structural and legal specifications (as demanded by the Federal Constitutional Court in its fundamental sports betting decision of 28 March 2006) as well. The legislator was obliged to enact at least the basic structure as to type and customisation of sports bets. The regulation as demanded by the Federal Constitutional Court must not be left to the executive (p. 10).
Total consistency was now necessary after the expiration of the transitional period (p. 7). Therefore, there was no room for an additional transitional period as provided for by sec. 25 (1) of the Interstate Treaty on Gambling. After the expiration of the transitional period one now had to take a holistic look at the entire gambling sector (p. 32). However, there were only rudimentary substantial criteria as to type and customisation of the sports bets. Moreover it was not apparent that the legislator acted on the distribution of sports bets in accordance with the requirements set forth by the Federal Constitutional Court. Sports bets were continued to be marketed as “an everyday merchandise” (as expressly criticised by the Federal Constitutional Court). In particular the Administrative Court has a critical view on the tight net of receiving offices. In this respect, no re-organisation of this legal and factual structure as criticised by the Federal Constitutional Court was apparent (p. 13).
In addition, there were considerable doubts, whether the requirements for players’ protection were sufficiently respected in adopting and structuring the monopoly. Stake ceiling was not provided for by law (p. 27). Finally, doubts still persisted as to whether financial interests were not continued to be pursued by this re-organisation. After all, fiscal interests were pointed out as being material during the legislative procedure.
The Administrative Court of Berlin does not consider it necessary to mandate conditions in order to grant relief from judicial execution, as recently ordered by the Administrative Court of Kassel (followed by the Administrative Court of Trier) and the Administrative Court of Munich (cf. German Gaming Law updated no. 99 and 100). Specific dangers really emanating from the operator or the agent could be addressed by issuing a prohibition order under trade law (p. 37).
The Administrative Court of Berlin also granted relief with regards to the high administrative fee (EUR 2.000,-). The requirements for charging the fee were not fulfilled. Upon summary examination, the court did not find a case of illegal gambling.
from: German Gaming Law updated No. 102
17 July 2008
What is “Gambelli III” going to bring about? – European Court of Justice hears the Liga Portuguesa de Futebol Profissional Case
by attorney-at-law Martin Arendts, M.B.L.-HSG
After the Gambelli decision at the end of 2003 and its follow-up decision Placanica of March 2007 another landmark decision of the European Court of Justice (ECJ) regarding the freedom to provide services with regard to sports betting will be pronounced at the beginning of next year.
On 29 April 2008, the ECJ’s Grand Chamber, composed of 13 judges, heard Case No. C-42/07, referred from Portugal last year (cf. German Gaming Law updated no. 79 for the questions referred for preliminary ruling).
The ECJ’s upcoming decision should have significant effects not only on Portugal but also on the other EU Member States (in view of the eight pending German preliminary ruling proceedings this should be especially true for Germany). In particular, it remains to be seen, whether the consistency test with regards to national provisions on gambling, put at the centre of the legal discussion by all parties (next to the parties of the main proceedings not less than nine EU Member States as well as the European Commission), is going to experience further specification by the ECJ with regards to the “Gambelli Criteria” as stipulated in the Gambelli and Placanica decisions. Such a “Gambelli III” decision should be of vital importance for the other proceedings pending before the ECJ and should have further legal and political implications.
The subject matter of the initial proceedings is the sponsoring of the Portuguese Football League by bwin, a private bookmaker. Plaintiffs are Liga Portuguesa de Futebol Professional and Baw International Ltd. (a Gibraltar licensed bookmaker and member of the bwin group). Defendant is the Portuguese monopoly provider Santa Casa da Misericórdia de Lisboa. Santa Casa had tried to have that bookmaker’s sponsoring agreement with the Football League (valued at up to EUR 10 mill. over a period of 4 years) declared void. This contract provided for the Football League to be renamed in “Bwin League”. Santa Casa invoked the Portuguese Advertisement Code (Codigo de Publicidade) pursuant to which games of chance were banned from being advertised for, except for such games operated by Santa Casa. The plaintiffs appealed a fine of about EUR 80.000,- imposed on them and invoked prevailing Community law, in particular the freedom to provide services, the freedom of establishment and the principle of free movement of capital.
The oral hearing before the Grand Chamber of the ECJ on 29 April 2008 was above all about the justification of the gambling monopoly. Attorney-at-law Serra Jorge, representing the Football League and the bookmaker, contested that the limitation to one single operator was justified. Providing for a single license was not compatible with fighting crime either, since the Portuguese betting clients would then search illegal alternatives rendering them subject to an increased danger of fraud. A monopoly would drive people into the black market. Serra added, that all EU Member States were fighting money laundering, organised crime and betting fraud. Fighting crime and consumer protection could be accomplished equally effective if not more effective by a well organised licensing system. There were no risks with bookmakers licensed in another member state. Traditionally monopolies were less supervised than private companies.
The Portuguese government representing Santa Case on the other hand argued, that Santa Casa was now able to offer games of chance via the Internet as well (although limited to the games so far offered in receiving offices). Lottery scratch tickets were not offered via the Internet for reasons of gamblers’ protection. A monopoly was justified by limiting the demand for games of chance. Liberalising the gaming sector was a key political question which had to rest with the individual Member State. The free market logic must not force a Member State to abrogate a reliable and proven legal system.
The ECJ asked the parties, whether a national monopoly could be justified for reasons of crime prevention and, whether it was not possible to attain the same goal by other means as well. Moreover, the court asked the parties, whether a monopolized system for one type of game of chance, such as bets for example, could be justified, if a licensing system existed for other types, such as casinos. Furthermore, the ECJ asked for an opinion on whether a provider under a state monopoly should be banned from offering his services beyond the borders of its country of origin.
In addition, the ECJ’s judge-rapporteur, judge Konrad Schiemann, inquired about the notification proceedings regarding the legal regulation of the Internet offer and about the significance of the current ECJ jurisdiction regarding the Swedish monopoly on alcohol (Rosengren decision, Case C-170/04).
One can expect fundamental clarifications from the court as it dealt with the tensions between a state monopoly and the basic freedoms beyond the scope of the questions referred to it. Not only the proceedings before the ECJ but also thousands of proceedings before national courts are about the question, whether one type of game of chance can be monopolised by a state, whereas other, in part clearly more dangerous ones, are allowed to be offered by private operators. Is “coherence light”, that is a systematic regulation restricted to, say sports betting, sufficient or should the regulation of other types of games of chance such as casino games and slot machines be considered as well (a question referred to the ECJ by the Administrative Courts of Giessen, Stuttgart and Schleswig)?
As already reported in German Gaming Law updated no. 100, there is another case, on the basis of a reference for a preliminary ruling regarding the same facts, pending before the ECJ (Santa Casa da Misericórdia de Lisboa v Liga Portuguesa de Futebol Profissional (CA/LPFP), Baw International Ltd und Betandwin.com Interactive Entertainment, Case C-55/08). However, the ECJ has not joined the cases (which would have caused a significant delay) but stayed the later proceedings instead.
The ECJ’s Advocate General in charge of these proceedings, Yves Bot, announced to submit his opinion on 9 September 2008. A decision of the ECJ, usually pronounced within a few months thereafter, is therefore to be expected at the beginning of next year.
from: German Gaming Law updated No. 101
After the Gambelli decision at the end of 2003 and its follow-up decision Placanica of March 2007 another landmark decision of the European Court of Justice (ECJ) regarding the freedom to provide services with regard to sports betting will be pronounced at the beginning of next year.
On 29 April 2008, the ECJ’s Grand Chamber, composed of 13 judges, heard Case No. C-42/07, referred from Portugal last year (cf. German Gaming Law updated no. 79 for the questions referred for preliminary ruling).
The ECJ’s upcoming decision should have significant effects not only on Portugal but also on the other EU Member States (in view of the eight pending German preliminary ruling proceedings this should be especially true for Germany). In particular, it remains to be seen, whether the consistency test with regards to national provisions on gambling, put at the centre of the legal discussion by all parties (next to the parties of the main proceedings not less than nine EU Member States as well as the European Commission), is going to experience further specification by the ECJ with regards to the “Gambelli Criteria” as stipulated in the Gambelli and Placanica decisions. Such a “Gambelli III” decision should be of vital importance for the other proceedings pending before the ECJ and should have further legal and political implications.
The subject matter of the initial proceedings is the sponsoring of the Portuguese Football League by bwin, a private bookmaker. Plaintiffs are Liga Portuguesa de Futebol Professional and Baw International Ltd. (a Gibraltar licensed bookmaker and member of the bwin group). Defendant is the Portuguese monopoly provider Santa Casa da Misericórdia de Lisboa. Santa Casa had tried to have that bookmaker’s sponsoring agreement with the Football League (valued at up to EUR 10 mill. over a period of 4 years) declared void. This contract provided for the Football League to be renamed in “Bwin League”. Santa Casa invoked the Portuguese Advertisement Code (Codigo de Publicidade) pursuant to which games of chance were banned from being advertised for, except for such games operated by Santa Casa. The plaintiffs appealed a fine of about EUR 80.000,- imposed on them and invoked prevailing Community law, in particular the freedom to provide services, the freedom of establishment and the principle of free movement of capital.
The oral hearing before the Grand Chamber of the ECJ on 29 April 2008 was above all about the justification of the gambling monopoly. Attorney-at-law Serra Jorge, representing the Football League and the bookmaker, contested that the limitation to one single operator was justified. Providing for a single license was not compatible with fighting crime either, since the Portuguese betting clients would then search illegal alternatives rendering them subject to an increased danger of fraud. A monopoly would drive people into the black market. Serra added, that all EU Member States were fighting money laundering, organised crime and betting fraud. Fighting crime and consumer protection could be accomplished equally effective if not more effective by a well organised licensing system. There were no risks with bookmakers licensed in another member state. Traditionally monopolies were less supervised than private companies.
The Portuguese government representing Santa Case on the other hand argued, that Santa Casa was now able to offer games of chance via the Internet as well (although limited to the games so far offered in receiving offices). Lottery scratch tickets were not offered via the Internet for reasons of gamblers’ protection. A monopoly was justified by limiting the demand for games of chance. Liberalising the gaming sector was a key political question which had to rest with the individual Member State. The free market logic must not force a Member State to abrogate a reliable and proven legal system.
The ECJ asked the parties, whether a national monopoly could be justified for reasons of crime prevention and, whether it was not possible to attain the same goal by other means as well. Moreover, the court asked the parties, whether a monopolized system for one type of game of chance, such as bets for example, could be justified, if a licensing system existed for other types, such as casinos. Furthermore, the ECJ asked for an opinion on whether a provider under a state monopoly should be banned from offering his services beyond the borders of its country of origin.
In addition, the ECJ’s judge-rapporteur, judge Konrad Schiemann, inquired about the notification proceedings regarding the legal regulation of the Internet offer and about the significance of the current ECJ jurisdiction regarding the Swedish monopoly on alcohol (Rosengren decision, Case C-170/04).
One can expect fundamental clarifications from the court as it dealt with the tensions between a state monopoly and the basic freedoms beyond the scope of the questions referred to it. Not only the proceedings before the ECJ but also thousands of proceedings before national courts are about the question, whether one type of game of chance can be monopolised by a state, whereas other, in part clearly more dangerous ones, are allowed to be offered by private operators. Is “coherence light”, that is a systematic regulation restricted to, say sports betting, sufficient or should the regulation of other types of games of chance such as casino games and slot machines be considered as well (a question referred to the ECJ by the Administrative Courts of Giessen, Stuttgart and Schleswig)?
As already reported in German Gaming Law updated no. 100, there is another case, on the basis of a reference for a preliminary ruling regarding the same facts, pending before the ECJ (Santa Casa da Misericórdia de Lisboa v Liga Portuguesa de Futebol Profissional (CA/LPFP), Baw International Ltd und Betandwin.com Interactive Entertainment, Case C-55/08). However, the ECJ has not joined the cases (which would have caused a significant delay) but stayed the later proceedings instead.
The ECJ’s Advocate General in charge of these proceedings, Yves Bot, announced to submit his opinion on 9 September 2008. A decision of the ECJ, usually pronounced within a few months thereafter, is therefore to be expected at the beginning of next year.
from: German Gaming Law updated No. 101
European Court of Justice to decide on a monopoly on casinos – new reference for preliminary ruling from Austria
by attorney-at-law Martin Arendts, M.B.L.-HSG
After numerous decisions on sports betting the European Court of Justice may now deal with the admissibility of a casino monopoly. The Austrian County Court of Linz (Landesgericht Linz) recently referred several fundamental questions for preliminary ruling to the ECJ (Case no. C-64/08 – „Engelmann“). The ECJ’s decision could well throw into disarray the current licensing system for casinos in Austria and could be of fundamental importance for other Member States as well.
The County Court of Linz referred the following questions for preliminary ruling:
• Is Article 43 EC (Treaty establishing the European Community, in the version of 2 October 1997, most recently amended by the Treaty of 25 April 2005 concerning the accession of the Republic of Bulgaria and Romania to the European Union (OJ 2005 L 157, p. 11)) to be interpreted as precluding a provision which provides that only public limited companies established in the territory of a particular Member State may there operate games of chance in casinos, thereby necessitating the establishment or acquisition of a company limited by shares in that Member State?
• Are Articles 43 EC and 49 EC to be interpreted as precluding a national monopoly on certain types of gaming, such as games of chance in casinos, if there is no consistent and systematic policy whatsoever in the Member State concerned to limit gaming, inasmuch as national licensed organisers encourage participation in gaming - such as public sports betting and lotteries - and advertise such gaming (on television and in newspapers and magazines) in a manner which goes as far as offering a cash payment for a lottery ticket shortly before the lottery draw is made ('TOI TOI TOI - Believe in luck!')?
• Are Articles 43 EC and 49 EC to be interpreted as precluding a provision under which all licenses granting the right to operate games of chance and casinos are issued for a period of 15 years on the basis of a scheme under which Community competitors (not belonging to that Member State) are excluded from the tendering procedure?
The first and the last question referred in particular show that the County Court of Linz regards the current licensing procedure for casinos in Austria to be discriminating and untenable under Community law. It obviously makes reference to the ECJ’s decision concerning the Italian betting licensing system (decision of 13 September 2007, Case C-260/04 – Commission v Italy). A whole new licensing procedure should become necessary, in case that the ECJ will answer in the sense suggested by the County Court of Linz. The second question as to the consistency test can already be found in numerous pending proceedings for preliminary ruling before the ECJ (cf. Arendts, ZfWG (Journal for Betting- and Gaming Law) 2007, 347 ff.).
from: German Gaming Law updated No. 101
After numerous decisions on sports betting the European Court of Justice may now deal with the admissibility of a casino monopoly. The Austrian County Court of Linz (Landesgericht Linz) recently referred several fundamental questions for preliminary ruling to the ECJ (Case no. C-64/08 – „Engelmann“). The ECJ’s decision could well throw into disarray the current licensing system for casinos in Austria and could be of fundamental importance for other Member States as well.
The County Court of Linz referred the following questions for preliminary ruling:
• Is Article 43 EC (Treaty establishing the European Community, in the version of 2 October 1997, most recently amended by the Treaty of 25 April 2005 concerning the accession of the Republic of Bulgaria and Romania to the European Union (OJ 2005 L 157, p. 11)) to be interpreted as precluding a provision which provides that only public limited companies established in the territory of a particular Member State may there operate games of chance in casinos, thereby necessitating the establishment or acquisition of a company limited by shares in that Member State?
• Are Articles 43 EC and 49 EC to be interpreted as precluding a national monopoly on certain types of gaming, such as games of chance in casinos, if there is no consistent and systematic policy whatsoever in the Member State concerned to limit gaming, inasmuch as national licensed organisers encourage participation in gaming - such as public sports betting and lotteries - and advertise such gaming (on television and in newspapers and magazines) in a manner which goes as far as offering a cash payment for a lottery ticket shortly before the lottery draw is made ('TOI TOI TOI - Believe in luck!')?
• Are Articles 43 EC and 49 EC to be interpreted as precluding a provision under which all licenses granting the right to operate games of chance and casinos are issued for a period of 15 years on the basis of a scheme under which Community competitors (not belonging to that Member State) are excluded from the tendering procedure?
The first and the last question referred in particular show that the County Court of Linz regards the current licensing procedure for casinos in Austria to be discriminating and untenable under Community law. It obviously makes reference to the ECJ’s decision concerning the Italian betting licensing system (decision of 13 September 2007, Case C-260/04 – Commission v Italy). A whole new licensing procedure should become necessary, in case that the ECJ will answer in the sense suggested by the County Court of Linz. The second question as to the consistency test can already be found in numerous pending proceedings for preliminary ruling before the ECJ (cf. Arendts, ZfWG (Journal for Betting- and Gaming Law) 2007, 347 ff.).
from: German Gaming Law updated No. 101
16 July 2008
EGBA commitment towards higher responsible gaming standards
The European Gaming and Betting Association (EGBA) today launches a comprehensive set of standards that covers all aspects of player protection, fair gaming and responsible operator behaviour in the online gaming and betting environment. These standards complement stringent legal requirements already imposed by EU licensing jurisdictions.
Over 170 technical requirements have been adopted on a voluntary basis to take into account all aspects of online gaming and betting activities and associated services. As part of their membership criteria, EGBA members are required to comply with all standards. Compliance is verified by a compulsory annual audit carried out by eCOGRA, a leading standards and player protection body, which itself is annually subjected to a comprehensive quality assurance review by one of the world’s leading firms of auditors.
This initiative builds upon EGBA’s (then EBA) code of conduct, which was already adopted in 2003 and follows other industry initiatives. Self-regulation is vital in the online gaming and betting industry in order to continuously take stock of this fast developing eCommerce sector and stay ahead of slower legal developments. It also ensures, given the cross border nature of the sector, consistency of standards across Europe to guarantee consumers can play in a safe, secure and reliable environment.
EGBA Chairman, Norbert Teufelberger said: “These standards are a sign of our commitment to an exemplary level of corporate and social responsibility. They could serve as a basis for reflection at a time when governments and regulators across Europe are trying to find ways to best protect consumers in the online gaming and betting environment.”
These responsible gaming and betting standards include measures such as:
- Promoting responsible gaming, preventing underage gaming and problem gaming;
- A zero tolerance approach to fraud or criminal behaviour;
- Protecting customers’ privacy and safeguarding their information;
- Ensuring prompt and accurate customer payments;
- Assessing rigorously and independently the fairness of games;
- Committing to responsible and ethical marketing practice;
eCOGRA CEO Andrew Beveridge added: "Our goal is to ensure that EGBA has a meaningful professional review process for determining each member's compliance with agreed and consistently applied standards, which consumers and regulators have come to expect in the online gaming and betting industry.”
- ENDS -
About EGBA:
For further information or comment please contact:
Sigrid Ligné: +32 (0) 2 256 7527 or sigrid.ligne@egba.eu
The EGBA is an association of the leading European gaming and betting operators Bet-at-home.com, bwin, Digibet, Carmen Media Group, Expekt, Interwetten, PartyGaming and Unibet. EGBA is a Brussels-based non-profit making association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union. Online gaming and betting is a fast growing market, but will remain for the next decades a negligible part of the overall European gaming market in which the traditional land based offer is expected to grow from € 80 Billion GGR in 2007 to € 95 Billion GGR in 2012, thus keeping the lion’s share with 90,6% of the market. Source: Global Betting and Gaming Consultants, May 2008
www.egba.eu
www.responsiblegamingday.eu
About eCOGRA: eCOGRA sets online standards for gaming and betting and provides an international framework for best operational and player protection practice requirements. These are enforced through inspections and reviews, and continuous monitoring.
Companies that have achieved accreditation with eCOGRA are entitled to bear the organisation's "Safe and Fair" seal, indicating to players everywhere that all operational systems and games are continuously monitored to consistently high standards. For more information; got o www.eCOGRA.org
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SUMMARY
EGBA RESPONSIBLE STANDARDS
Objective
The EGBA technical Standards strengthen EGBA’s commitment to offering online gaming and betting activities in a secure, safe and reliable environment. In particular, this initiative aims to:
- preserve customer and stakeholder confidence in the industry;
- ensure that EGBA Members operate in accordance with the best practice and regulatory standards;
- address the perceived areas of concern raised in jurisdictions where a formal regulatory framework does not exist, or where only monopolies operate;
- substantiate commitment and compliance by consenting to rigorous annual independent assessments.
The EGBA technical Standards are founded upon nine principles which focus primarily on consumer protection. Each principle sets a directive from which a number of technical standards are derived. They define socially responsible practices that support the operations and business activities in relation to the products offered by each EGBA member. The members’ commitment is underpinned further by a rigorous independent assessment that is performed annually in order to substantiate compliance.
Summary of key principles and standards
Principle 1: PROMOTE RESPONSIBLE GAMING AND BETTING
- Providing customers with explicit information about the possible risks and harms of online gaming
- Providing a link to qualified sources of help
- Allowing customers to request the setting of betting/deposit limits
- Offering customers the opportunity to self-exclude
- Not providing credit to customers
Principle 2: KNOW-YOUR-CUSTOMER AND PREVENT UNDERAGE GAMING AND BETTING
- Prominently displaying a ‘no under 18’s’ or ‘no under 21’s’ sign on the homepage of the members’ websites, linking to a clear message about underage play
- Advising parents regarding recognised filtering programmes, including a link to a recognised filtering programme to enable customers/parents to prevent minors from accessing gaming and betting sites
- Regularly monitoring underage gaming and betting by conducting random checks of customers to ensure compliance with age restrictions
Principle 3: ZERO TOLERANCE OF FRAUDULENT AND CRIMINAL BEHAVIOUR
- Introducing anti-money laundering policies and procedures to cater for the identification, escalation and reporting of unusual or suspicious activities, including investigating material or unusual deposits, withdrawals and customer accounts where little or no gaming or betting activity takes place
- Logging of all information regarding changes to customer details and requesting appropriate verification documentation for significant changes (e.g. changes to customers’ names and banking details)
- Introducing anti-money laundering practices including the provision of suspicious transaction reports to the relevant national financial investigation unit and international institutions
Principle 4: PROTECT CUSTOMER PRIVACY AND SAFEGUARD INFORMATION
- Protecting confidential customer information from unauthorised or unnecessary disclosure
- Ensuring privacy and confidentiality: customers will be informed on EGBA members’ websites about the exact terms and conditions of the member’s privacy policy
Principle 5: PROMPT AND ACCURATE CUSTOMER PAYMENTS
- Ensuring prompt and accurate processing of payments subject to appropriate and necessary checks and verifications
- Allowing customers to open only one account, by providing the following minimum information: name, age, address, unique username and password.
Principle 6: RIGOROUS INDEPENDENT ASSESSMENT OF PRODUCT FAIRNESS AND RANDOMNESS
Implementing a product testing policy, approved and supported by the EGBA member’s senior management, which will provide for the internal and external testing of all products for fairness and randomness
Principle 7: ETHICAL AND RESPONSIBLE MARKETING
- Ensuring that advertisements shall not entice the underage to bet, and shall not be displayed in media that is clearly targeted at the underage
- Ensuring that advertisements only contain factually correct information and avoid misleading information
- Ensuring that members do not knowingly engage in the distribution of unsolicited advertisements (i.e. SPAM) either directly or through a third party
Principle 8: COMMITMENT TO CUSTOMER SATISFACTION AND SUPPORT
- Giving customers the opportunity to log complaints and disputes on a 24/7 basis
- Ensuring that an independent third party shall be available for mediation or resolution of disputes received from members or their customers
Principle 9: RESPONSIBLE PRACTICES UNDERPINNED BY A SECURE, SAFE AND RELIABLE ENVIRONMENT
- Having a legal operating license from a reputable European regulatory authority
- Having an independent third party assessing on an annual basis the EGBA members’ compliance with the standards
- Having EGBA members commit to an annual audit of financial statements and accounts performed by a reputable external audit firm
Over 170 technical requirements have been adopted on a voluntary basis to take into account all aspects of online gaming and betting activities and associated services. As part of their membership criteria, EGBA members are required to comply with all standards. Compliance is verified by a compulsory annual audit carried out by eCOGRA, a leading standards and player protection body, which itself is annually subjected to a comprehensive quality assurance review by one of the world’s leading firms of auditors.
This initiative builds upon EGBA’s (then EBA) code of conduct, which was already adopted in 2003 and follows other industry initiatives. Self-regulation is vital in the online gaming and betting industry in order to continuously take stock of this fast developing eCommerce sector and stay ahead of slower legal developments. It also ensures, given the cross border nature of the sector, consistency of standards across Europe to guarantee consumers can play in a safe, secure and reliable environment.
EGBA Chairman, Norbert Teufelberger said: “These standards are a sign of our commitment to an exemplary level of corporate and social responsibility. They could serve as a basis for reflection at a time when governments and regulators across Europe are trying to find ways to best protect consumers in the online gaming and betting environment.”
These responsible gaming and betting standards include measures such as:
- Promoting responsible gaming, preventing underage gaming and problem gaming;
- A zero tolerance approach to fraud or criminal behaviour;
- Protecting customers’ privacy and safeguarding their information;
- Ensuring prompt and accurate customer payments;
- Assessing rigorously and independently the fairness of games;
- Committing to responsible and ethical marketing practice;
eCOGRA CEO Andrew Beveridge added: "Our goal is to ensure that EGBA has a meaningful professional review process for determining each member's compliance with agreed and consistently applied standards, which consumers and regulators have come to expect in the online gaming and betting industry.”
- ENDS -
About EGBA:
For further information or comment please contact:
Sigrid Ligné: +32 (0) 2 256 7527 or sigrid.ligne@egba.eu
The EGBA is an association of the leading European gaming and betting operators Bet-at-home.com, bwin, Digibet, Carmen Media Group, Expekt, Interwetten, PartyGaming and Unibet. EGBA is a Brussels-based non-profit making association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union. Online gaming and betting is a fast growing market, but will remain for the next decades a negligible part of the overall European gaming market in which the traditional land based offer is expected to grow from € 80 Billion GGR in 2007 to € 95 Billion GGR in 2012, thus keeping the lion’s share with 90,6% of the market. Source: Global Betting and Gaming Consultants, May 2008
www.egba.eu
www.responsiblegamingday.eu
About eCOGRA: eCOGRA sets online standards for gaming and betting and provides an international framework for best operational and player protection practice requirements. These are enforced through inspections and reviews, and continuous monitoring.
Companies that have achieved accreditation with eCOGRA are entitled to bear the organisation's "Safe and Fair" seal, indicating to players everywhere that all operational systems and games are continuously monitored to consistently high standards. For more information; got o www.eCOGRA.org
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SUMMARY
EGBA RESPONSIBLE STANDARDS
Objective
The EGBA technical Standards strengthen EGBA’s commitment to offering online gaming and betting activities in a secure, safe and reliable environment. In particular, this initiative aims to:
- preserve customer and stakeholder confidence in the industry;
- ensure that EGBA Members operate in accordance with the best practice and regulatory standards;
- address the perceived areas of concern raised in jurisdictions where a formal regulatory framework does not exist, or where only monopolies operate;
- substantiate commitment and compliance by consenting to rigorous annual independent assessments.
The EGBA technical Standards are founded upon nine principles which focus primarily on consumer protection. Each principle sets a directive from which a number of technical standards are derived. They define socially responsible practices that support the operations and business activities in relation to the products offered by each EGBA member. The members’ commitment is underpinned further by a rigorous independent assessment that is performed annually in order to substantiate compliance.
Summary of key principles and standards
Principle 1: PROMOTE RESPONSIBLE GAMING AND BETTING
- Providing customers with explicit information about the possible risks and harms of online gaming
- Providing a link to qualified sources of help
- Allowing customers to request the setting of betting/deposit limits
- Offering customers the opportunity to self-exclude
- Not providing credit to customers
Principle 2: KNOW-YOUR-CUSTOMER AND PREVENT UNDERAGE GAMING AND BETTING
- Prominently displaying a ‘no under 18’s’ or ‘no under 21’s’ sign on the homepage of the members’ websites, linking to a clear message about underage play
- Advising parents regarding recognised filtering programmes, including a link to a recognised filtering programme to enable customers/parents to prevent minors from accessing gaming and betting sites
- Regularly monitoring underage gaming and betting by conducting random checks of customers to ensure compliance with age restrictions
Principle 3: ZERO TOLERANCE OF FRAUDULENT AND CRIMINAL BEHAVIOUR
- Introducing anti-money laundering policies and procedures to cater for the identification, escalation and reporting of unusual or suspicious activities, including investigating material or unusual deposits, withdrawals and customer accounts where little or no gaming or betting activity takes place
- Logging of all information regarding changes to customer details and requesting appropriate verification documentation for significant changes (e.g. changes to customers’ names and banking details)
- Introducing anti-money laundering practices including the provision of suspicious transaction reports to the relevant national financial investigation unit and international institutions
Principle 4: PROTECT CUSTOMER PRIVACY AND SAFEGUARD INFORMATION
- Protecting confidential customer information from unauthorised or unnecessary disclosure
- Ensuring privacy and confidentiality: customers will be informed on EGBA members’ websites about the exact terms and conditions of the member’s privacy policy
Principle 5: PROMPT AND ACCURATE CUSTOMER PAYMENTS
- Ensuring prompt and accurate processing of payments subject to appropriate and necessary checks and verifications
- Allowing customers to open only one account, by providing the following minimum information: name, age, address, unique username and password.
Principle 6: RIGOROUS INDEPENDENT ASSESSMENT OF PRODUCT FAIRNESS AND RANDOMNESS
Implementing a product testing policy, approved and supported by the EGBA member’s senior management, which will provide for the internal and external testing of all products for fairness and randomness
Principle 7: ETHICAL AND RESPONSIBLE MARKETING
- Ensuring that advertisements shall not entice the underage to bet, and shall not be displayed in media that is clearly targeted at the underage
- Ensuring that advertisements only contain factually correct information and avoid misleading information
- Ensuring that members do not knowingly engage in the distribution of unsolicited advertisements (i.e. SPAM) either directly or through a third party
Principle 8: COMMITMENT TO CUSTOMER SATISFACTION AND SUPPORT
- Giving customers the opportunity to log complaints and disputes on a 24/7 basis
- Ensuring that an independent third party shall be available for mediation or resolution of disputes received from members or their customers
Principle 9: RESPONSIBLE PRACTICES UNDERPINNED BY A SECURE, SAFE AND RELIABLE ENVIRONMENT
- Having a legal operating license from a reputable European regulatory authority
- Having an independent third party assessing on an annual basis the EGBA members’ compliance with the standards
- Having EGBA members commit to an annual audit of financial statements and accounts performed by a reputable external audit firm
13 July 2008
Online betting: Can the European Commission enforce the principles of the EU Treaty?
Whilst a rigorous process within the European Commission (Commission) has been instituted to protect the EC Treaty, questions are now being raised about whether this process is working. Twelve to fifteen months after having received a Reasoned Opinion, the Commission’s final warning before the seizure of the European Court of Justice (ECJ), several Member States have still not taken any concrete legislative measures to amend their gambling laws and put an end to breaches of the EC Treaty. Instead, these States continue to unfairly restrict the free movement of services across the EU, strictly enforcing the domestic laws that are being challenged by the Commission through the infringement proceedings.
Despite having had several recent opportunities to do so, the Commission has failed to take the next step and bring these non-compliant Member States to the ECJ.
The Remote Gambling Association (RGA) and the European Gaming and Betting Association (EGBA) the leading trade associations in Europe, are disappointed by these delays especially after the strong criticism voiced by the European Ombudsman in 2006, confirming that, regardless of political sensitivity, sports betting cases must be dealt in due time by the Commission, including the College of Commissioners.
Additionally, during an exchange of views with Members of the European Parliament on the 27th May 2008 within the Internal Market and Consumer Protection committee, Commissioner McCreevy confirmed his duty to enforce the decisions of the ECJ and to act when he receives a complaint. He also said “I am frustrated with the lethargy in moving forward with these proceedings”.
Clive Hawkswood, Chief Executive of the RGA comments “Gambling has become a real test of the Commission’s ability to resist national protectionist pressures. More generally, it is the functionality and credibility of the Institution as Guardian of the EC Treaty that is at stake.” According to Sigrid Ligné, Secretary General of the EGBA “Well-established and responsible online gaming and betting companies in the EU have had to endure unfair restrictions, discriminations and missed business opportunities for nearly a decade. Each undue delay to bring non-cooperative Member States before the ECJ distorts the internal market, restricts consumer choice and results in incremental costs and damages to many European companies. More than ever, the Commission needs to demonstrate that it can and will enforce the Treaty that it was put in place to protect.”
* * *
For further information or comment please contact:
Clive Hawkswood: +44 20 74 79 40 40 chawkswood@rga.eu.com
Sigrid Ligné: +32 (0) 2 256 7527 sigrid.ligne@egba.eu
The RGA represents the worlds largest licensed, and stock market-listed remote gambling companies and provides the industry with a single voice on all the issues of importance to regulators, legislators, and key decision makers around the world. www.rga.eu.com
The EGBA is an association of the leading European gaming and betting operators. EGBA is a Brussels-based non-profit making association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union. www.egba.eu www.responsiblegamingday.eu
Background on the European Ombudsman’s Special Report:
The European Ombudsman, Nikiforos Diamandouros, published, on 30 May 2006, a special report on Commission's handling of a sports betting complaint. A special report is the strongest possible action the Ombudsman can take. Since the establishment of the European Ombudsman in 1995, the institution has issued only 13 special reports.The report indicated that "the Ombudsman considers that the present case raises an important issue of principle, namely the question as to whether the Commission is entitled indefinitely to delay its handling of complaints alleging an infringement of Community law by a member state on the grounds that it is unable to reach a political consensus on how to proceed". The Ombudsman report stated that the Commission has a duty to deal properly with all infringement complaints, even if they are 'highly politically sensitive or controversial'. He thus recommended the Commission to "deal with the complainant's infringement complaint diligently and without undue delay".
Despite having had several recent opportunities to do so, the Commission has failed to take the next step and bring these non-compliant Member States to the ECJ.
The Remote Gambling Association (RGA) and the European Gaming and Betting Association (EGBA) the leading trade associations in Europe, are disappointed by these delays especially after the strong criticism voiced by the European Ombudsman in 2006, confirming that, regardless of political sensitivity, sports betting cases must be dealt in due time by the Commission, including the College of Commissioners.
Additionally, during an exchange of views with Members of the European Parliament on the 27th May 2008 within the Internal Market and Consumer Protection committee, Commissioner McCreevy confirmed his duty to enforce the decisions of the ECJ and to act when he receives a complaint. He also said “I am frustrated with the lethargy in moving forward with these proceedings”.
Clive Hawkswood, Chief Executive of the RGA comments “Gambling has become a real test of the Commission’s ability to resist national protectionist pressures. More generally, it is the functionality and credibility of the Institution as Guardian of the EC Treaty that is at stake.” According to Sigrid Ligné, Secretary General of the EGBA “Well-established and responsible online gaming and betting companies in the EU have had to endure unfair restrictions, discriminations and missed business opportunities for nearly a decade. Each undue delay to bring non-cooperative Member States before the ECJ distorts the internal market, restricts consumer choice and results in incremental costs and damages to many European companies. More than ever, the Commission needs to demonstrate that it can and will enforce the Treaty that it was put in place to protect.”
* * *
For further information or comment please contact:
Clive Hawkswood: +44 20 74 79 40 40 chawkswood@rga.eu.com
Sigrid Ligné: +32 (0) 2 256 7527 sigrid.ligne@egba.eu
The RGA represents the worlds largest licensed, and stock market-listed remote gambling companies and provides the industry with a single voice on all the issues of importance to regulators, legislators, and key decision makers around the world. www.rga.eu.com
The EGBA is an association of the leading European gaming and betting operators. EGBA is a Brussels-based non-profit making association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union. www.egba.eu www.responsiblegamingday.eu
Background on the European Ombudsman’s Special Report:
The European Ombudsman, Nikiforos Diamandouros, published, on 30 May 2006, a special report on Commission's handling of a sports betting complaint. A special report is the strongest possible action the Ombudsman can take. Since the establishment of the European Ombudsman in 1995, the institution has issued only 13 special reports.The report indicated that "the Ombudsman considers that the present case raises an important issue of principle, namely the question as to whether the Commission is entitled indefinitely to delay its handling of complaints alleging an infringement of Community law by a member state on the grounds that it is unable to reach a political consensus on how to proceed". The Ombudsman report stated that the Commission has a duty to deal properly with all infringement complaints, even if they are 'highly politically sensitive or controversial'. He thus recommended the Commission to "deal with the complainant's infringement complaint diligently and without undue delay".
19 June 2008
Ladbrokes wins referral of case to ECJ
Ladbrokes, the world's leading bookmaker, today welcomed the decision of the Dutch Supreme Court to refer its case to the ECJ. The appeal related to an injunction taken out in 2002 that prevents Ladbrokes from accepting sports bets from Dutch citizens on Ladbrokes.com.
The court's decision means that the European law issues which are fundamental to the case, relating to the right under the Treaty of Rome for a well regulated online betting company to offer its services across borders will now be heard by Europe's highest court.
Ladbrokes Managing Director of eGaming John O'Reilly commented: "We have fought for 6 years against Dutch protectionism and finally we have won the referral to the European Court of Justice. At last the Dutch courts have recognised that its laws on betting must be viewed in the context of European law. Under the Treaty of Rome we should be able to provide our services across borders in competition with the Dutch monopoly, but at the moment we are unfairly prevented from doing so."
The Dutch Court has referred the following three questions to the European Court of Justice to guide them on how they should deal with the case in the context of European law.
1. Under European case law (Gambelli etc) is it allowed to make the offering of gambling attractive through the introduction of new games and through publicity in order to keep (potential) gamblers away from illegal offerings?
2. Does the national judge in each case have to decide whether the application of the national policy re gambling (e.g. in this case an order to block a website) in each specific case is justified?
3. Can a member state on the basis of a closed licence system prevent the offering of gambling via the internet by a company who has a licence in another member state?
Ladbrokes has previously complained to the EU Commission about the situation in the Netherlands where it has been restricted from accepting Dutch customers at www.ladbrokes.com despite the fact it does not advertise in the Netherlands or offer a Dutch language service. The Netherlands is one of the countries that may be referred to the ECJ by the EU Commission, which instigated proceedings against the Netherlands in 2006 citing concerns about Dutch laws restricting access to its gambling and sports betting markets.
press release of Ladbrokes
The court's decision means that the European law issues which are fundamental to the case, relating to the right under the Treaty of Rome for a well regulated online betting company to offer its services across borders will now be heard by Europe's highest court.
Ladbrokes Managing Director of eGaming John O'Reilly commented: "We have fought for 6 years against Dutch protectionism and finally we have won the referral to the European Court of Justice. At last the Dutch courts have recognised that its laws on betting must be viewed in the context of European law. Under the Treaty of Rome we should be able to provide our services across borders in competition with the Dutch monopoly, but at the moment we are unfairly prevented from doing so."
The Dutch Court has referred the following three questions to the European Court of Justice to guide them on how they should deal with the case in the context of European law.
1. Under European case law (Gambelli etc) is it allowed to make the offering of gambling attractive through the introduction of new games and through publicity in order to keep (potential) gamblers away from illegal offerings?
2. Does the national judge in each case have to decide whether the application of the national policy re gambling (e.g. in this case an order to block a website) in each specific case is justified?
3. Can a member state on the basis of a closed licence system prevent the offering of gambling via the internet by a company who has a licence in another member state?
Ladbrokes has previously complained to the EU Commission about the situation in the Netherlands where it has been restricted from accepting Dutch customers at www.ladbrokes.com despite the fact it does not advertise in the Netherlands or offer a Dutch language service. The Netherlands is one of the countries that may be referred to the ECJ by the EU Commission, which instigated proceedings against the Netherlands in 2006 citing concerns about Dutch laws restricting access to its gambling and sports betting markets.
press release of Ladbrokes
12 June 2008
Gaming machines: European Commission brings further action against Greece
Commission of the European Communities v Hellenic Republic
(Case C-109/08)
Language of the case: Greek
Parties
Applicant: Commission of the European Communities (represented by: Maria Patakia)
Defendant: Hellenic Republic
Form of order sought
declare that, by failing to take the necessary measures to comply with the judgment delivered by the Court of Justice on 26 October 2006 in Case C-65/05, the Hellenic Republic has failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/EC; 1
order the Hellenic Republic to pay to the Commission a proposed penalty payment of EUR 31 798.80 for each day of delay in complying with the judgment which was delivered in Case C-65/05, from the day when judgment is delivered in the present case until the day when the judgment delivered in Case C-65/05 has been complied with;
order the Hellenic Republic to pay to the Commission a daily lump sum of EUR 9 636, from the day when judgment was delivered in Case C-65/05 until the date on which judgment is delivered in the present case or, if earlier, the date on which the judgment in Case C-65/05 is complied with;
order the Hellenic Republic to pay the costs.
Pleas in law and main arguments
1. On 26 October 2006 the Court of Justice of the European Communities delivered a judgment in which it declared as follows:
by inserting into Articles 2(1) and 3 of Law No 3037/2002 the prohibition, subject to the criminal and administrative penalties set out in Articles 4 and 5 of the same law, on the installation and operation of all electrical, electromechanical and electronic games, including all computer games, on all public or private premises apart from casinos, the Hellenic Republic had failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/CE of the European Parliament and of the Council laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services, as amended by Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998.
2. After calling upon the Hellenic Republic to inform it of any regulatory measures to comply with the Court's judgment, the Commission sent it a letter of formal notice and a reasoned opinion, in accordance with Article 228 EC. The Hellenic Republic replied to neither.
3. Consequently, the Commission recorded that the Hellenic Republic had failed to take the necessary measures to comply with the Court's judgment and decided to bring proceedings against it before the Court in accordance with Article 228 EC.
4. By its action the Commission, first, asks the Court to declare that the Hellenic Republic has not complied with the judgment delivered by the Court on 26 October 2006 in Case C-65/05 and has therefore failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/EC and, second, proposes that the Court order the Hellenic Republic to pay to the Commission:
- a penalty payment of EUR 31 798.80 for each day of delay in complying with the judgment which was delivered in Case C-65/05, from the day when judgment is delivered in the present case until the day when the judgment delivered in Case C-65/05 has been complied with;
- a daily lump sum of EUR 9 636, from the day when judgment was delivered in Case C-65/05 until the date on which judgment is delivered in the present case or, if earlier, the date on which the judgment in Case C-65/05 is complied with.
____________
1 - Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations (OJ No L 204, 21.7.1998, p. 37).
(Case C-109/08)
Language of the case: Greek
Parties
Applicant: Commission of the European Communities (represented by: Maria Patakia)
Defendant: Hellenic Republic
Form of order sought
declare that, by failing to take the necessary measures to comply with the judgment delivered by the Court of Justice on 26 October 2006 in Case C-65/05, the Hellenic Republic has failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/EC; 1
order the Hellenic Republic to pay to the Commission a proposed penalty payment of EUR 31 798.80 for each day of delay in complying with the judgment which was delivered in Case C-65/05, from the day when judgment is delivered in the present case until the day when the judgment delivered in Case C-65/05 has been complied with;
order the Hellenic Republic to pay to the Commission a daily lump sum of EUR 9 636, from the day when judgment was delivered in Case C-65/05 until the date on which judgment is delivered in the present case or, if earlier, the date on which the judgment in Case C-65/05 is complied with;
order the Hellenic Republic to pay the costs.
Pleas in law and main arguments
1. On 26 October 2006 the Court of Justice of the European Communities delivered a judgment in which it declared as follows:
by inserting into Articles 2(1) and 3 of Law No 3037/2002 the prohibition, subject to the criminal and administrative penalties set out in Articles 4 and 5 of the same law, on the installation and operation of all electrical, electromechanical and electronic games, including all computer games, on all public or private premises apart from casinos, the Hellenic Republic had failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/CE of the European Parliament and of the Council laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services, as amended by Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998.
2. After calling upon the Hellenic Republic to inform it of any regulatory measures to comply with the Court's judgment, the Commission sent it a letter of formal notice and a reasoned opinion, in accordance with Article 228 EC. The Hellenic Republic replied to neither.
3. Consequently, the Commission recorded that the Hellenic Republic had failed to take the necessary measures to comply with the Court's judgment and decided to bring proceedings against it before the Court in accordance with Article 228 EC.
4. By its action the Commission, first, asks the Court to declare that the Hellenic Republic has not complied with the judgment delivered by the Court on 26 October 2006 in Case C-65/05 and has therefore failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/EC and, second, proposes that the Court order the Hellenic Republic to pay to the Commission:
- a penalty payment of EUR 31 798.80 for each day of delay in complying with the judgment which was delivered in Case C-65/05, from the day when judgment is delivered in the present case until the day when the judgment delivered in Case C-65/05 has been complied with;
- a daily lump sum of EUR 9 636, from the day when judgment was delivered in Case C-65/05 until the date on which judgment is delivered in the present case or, if earlier, the date on which the judgment in Case C-65/05 is complied with.
____________
1 - Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations (OJ No L 204, 21.7.1998, p. 37).
29 May 2008
Discriminatory taxes on lottery and betting winning: European Commission files suit against Spain
Action brought on 15 April 2008 - Commission of the European Communities v Kingdom of Spain
Case C-153/08
Parties
Applicant: Commission of the European Communities (represented by: R. Lyal and L. Lozano Palacios, acting as Agents)
Defendant: Kingdom of Spain
Form of order sought
The applicant claims that the Court should:
declare that, by maintaining in force fiscal legislation taxing winnings from all types of lotteries, games and betting organised outside the Kingdom of Spain, whereas winnings obtained from certain lotteries, games and betting organised within the Kingdom of Spain are exempted from income tax, the Kingdom of Spain has failed to fulfil its obligations under Community law and, in particular, under Article 49 EC and Article 36 of the Agreement on the European Economic Area;
order the Kingdom of Spain to pay the costs.
Pleas in law and main arguments
Under Spanish legislation, winnings from lotteries and betting organised by Loterías y Apuestas del Estado (the Spanish public-law body in charge of lotteries and betting) or by bodies or entities of the Comunidades Autónomas (Autonomous Communities), and winnings from lotteries organised by the Spanish Red Cross or the Organización Nacional de Ciegos Españoles (Spanish national association for the blind) are exempt from income tax. However, income from lotteries, games or betting organised by other national bodies or by foreign bodies, including those established in Member States of the European Union or the European Economic Area, is added to the taxable amount and subject to progressive rates of taxation.
Relying in particular on Lindman and Safir, the Commission points out that, according to that line of authority, the organising of lotteries is to be regarded as a "service" for the purposes of the Treaty. Also according to that case-law, Article 49 EC prohibits any restriction on the freedom to provide services, or any obstacle to that freedom - even where such a restriction or obstacle applies equally to national providers of services and to those of the other Member States - and precludes the application of any rule of national law the effect of which is to make it more difficult to provide services between Member States than to provide services wholly within a particular Member State. Given the particular features of the gaming sector, the case-law accepts certain restrictions imposed by Member States, provided that such measures can be shown to be appropriate and proportionate, as well as non-discriminatory.
The Commission maintains that the Spanish legislation is discriminatory because the exemption is reserved for certain entities which that legislation defines precisely, and entities of other Member States, albeit of the same nature and in pursuit of the same objectives as the Spanish entities specified in the exemption rule, are excluded from the benefit of that exemption. Accordingly, even if the Spanish authorities had shown, in the course of the infringement proceedings, that the legislation at issue is a measure which is appropriate and proportionate to the stated objective of protecting consumers and public order - which they have failed to do - the legislation at issue could not in any circumstances be regarded as compatible with Community law, in so far as it is wholly discriminatory.
Case C-153/08
Parties
Applicant: Commission of the European Communities (represented by: R. Lyal and L. Lozano Palacios, acting as Agents)
Defendant: Kingdom of Spain
Form of order sought
The applicant claims that the Court should:
declare that, by maintaining in force fiscal legislation taxing winnings from all types of lotteries, games and betting organised outside the Kingdom of Spain, whereas winnings obtained from certain lotteries, games and betting organised within the Kingdom of Spain are exempted from income tax, the Kingdom of Spain has failed to fulfil its obligations under Community law and, in particular, under Article 49 EC and Article 36 of the Agreement on the European Economic Area;
order the Kingdom of Spain to pay the costs.
Pleas in law and main arguments
Under Spanish legislation, winnings from lotteries and betting organised by Loterías y Apuestas del Estado (the Spanish public-law body in charge of lotteries and betting) or by bodies or entities of the Comunidades Autónomas (Autonomous Communities), and winnings from lotteries organised by the Spanish Red Cross or the Organización Nacional de Ciegos Españoles (Spanish national association for the blind) are exempt from income tax. However, income from lotteries, games or betting organised by other national bodies or by foreign bodies, including those established in Member States of the European Union or the European Economic Area, is added to the taxable amount and subject to progressive rates of taxation.
Relying in particular on Lindman and Safir, the Commission points out that, according to that line of authority, the organising of lotteries is to be regarded as a "service" for the purposes of the Treaty. Also according to that case-law, Article 49 EC prohibits any restriction on the freedom to provide services, or any obstacle to that freedom - even where such a restriction or obstacle applies equally to national providers of services and to those of the other Member States - and precludes the application of any rule of national law the effect of which is to make it more difficult to provide services between Member States than to provide services wholly within a particular Member State. Given the particular features of the gaming sector, the case-law accepts certain restrictions imposed by Member States, provided that such measures can be shown to be appropriate and proportionate, as well as non-discriminatory.
The Commission maintains that the Spanish legislation is discriminatory because the exemption is reserved for certain entities which that legislation defines precisely, and entities of other Member States, albeit of the same nature and in pursuit of the same objectives as the Spanish entities specified in the exemption rule, are excluded from the benefit of that exemption. Accordingly, even if the Spanish authorities had shown, in the course of the infringement proceedings, that the legislation at issue is a measure which is appropriate and proportionate to the stated objective of protecting consumers and public order - which they have failed to do - the legislation at issue could not in any circumstances be regarded as compatible with Community law, in so far as it is wholly discriminatory.
New referral to the ECJ: Club Hotel Loutraki
Reference for a preliminary ruling from the Simvoulio tis Epikratias (Greece) lodged on 9 April 2008 - Club Hotel Loutraki AE, Athinaïki Tekhniki AE and Evangelos Marinakis v Ethniko Simvoulio Radiotileorasis and Ipourgos Epikratias
Case C-145/08
Referring court
Simvoulio tis Epikratias
Parties to the main proceedings
Claimants: Club Hotel Loutraki AE, Athinaïki Tekhniki AE and Evangelos Marinakis
Defendants: Ethniko Simvoulio Radiotileorasis and Ipourgos Epikratias
Questions referred
Does a contract by which the contracting authority entrusts to the contracting undertaking the management of a casino business and the execution of a development plan consisting in the upgrading of the casino premises and the commercial exploitation of the possibilities offered by the casino's licence, and which contains a term under which the contracting authority is obliged to pay the contracting undertaking compensation should another casino lawfully operate in the wider area in which the casino in question operates, constitute a concession, not governed by Directive 92/50/EEC?
If the first question referred for a preliminary ruling is answered in the negative: does a legal action which is brought by persons who have participated in the procedure for the award of a public contract of mixed form providing inter alia for the supply of services subject to Annex I B to Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209), and in which they plead breach of the principle of equal treatment of participants in tender procedures (a principle affirmed by Article 3(2) of that directive), fall within the field of application of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395), or is its application precluded inasmuch as, in accordance with Article 9 of Directive 92/50/EEC, only Articles 14 and 16 of the latter apply to the procedure for the award of the abovementioned contract for the supply of services?
If the second question referred for a preliminary ruling is answered in the affirmative: accepting that a national provision in accordance with which only all the members of a consortium without legal personality which has participated unsuccessfully in a public procurement procedure can bring a legal action against the act awarding the contract, and not consortium members individually, is not in principle contrary to Community law and specifically to Directive 89/665, and that that still applies where the legal action has initially been brought by all the members of the consortium jointly but ultimately proves, as regards some of them, to be inadmissible, is it in addition necessary, from the viewpoint of application of that directive, to examine, in order to make a declaration of inadmissibility, whether those individual members thereafter retain the right to claim before another national court any damages which may be envisaged by a provision of national law?
When it has been held by settled case-law of a national court that an individual member of a consortium may also bring an admissible legal action against an act falling within a public procurement procedure, is it compatible with Directive 89/665/EEC, interpreted in the light of Article 6 of the European Convention on Human Rights as a general principle of Community law, to dismiss a legal action as inadmissible, because of a change to that settled case-law, without the person who has brought that legal action first being given either the opportunity to cure the inadmissibility or, in any event, the opportunity to set out, pursuant to the adversarial principle, his views relating to that issue?
Case C-145/08
Referring court
Simvoulio tis Epikratias
Parties to the main proceedings
Claimants: Club Hotel Loutraki AE, Athinaïki Tekhniki AE and Evangelos Marinakis
Defendants: Ethniko Simvoulio Radiotileorasis and Ipourgos Epikratias
Questions referred
Does a contract by which the contracting authority entrusts to the contracting undertaking the management of a casino business and the execution of a development plan consisting in the upgrading of the casino premises and the commercial exploitation of the possibilities offered by the casino's licence, and which contains a term under which the contracting authority is obliged to pay the contracting undertaking compensation should another casino lawfully operate in the wider area in which the casino in question operates, constitute a concession, not governed by Directive 92/50/EEC?
If the first question referred for a preliminary ruling is answered in the negative: does a legal action which is brought by persons who have participated in the procedure for the award of a public contract of mixed form providing inter alia for the supply of services subject to Annex I B to Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209), and in which they plead breach of the principle of equal treatment of participants in tender procedures (a principle affirmed by Article 3(2) of that directive), fall within the field of application of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395), or is its application precluded inasmuch as, in accordance with Article 9 of Directive 92/50/EEC, only Articles 14 and 16 of the latter apply to the procedure for the award of the abovementioned contract for the supply of services?
If the second question referred for a preliminary ruling is answered in the affirmative: accepting that a national provision in accordance with which only all the members of a consortium without legal personality which has participated unsuccessfully in a public procurement procedure can bring a legal action against the act awarding the contract, and not consortium members individually, is not in principle contrary to Community law and specifically to Directive 89/665, and that that still applies where the legal action has initially been brought by all the members of the consortium jointly but ultimately proves, as regards some of them, to be inadmissible, is it in addition necessary, from the viewpoint of application of that directive, to examine, in order to make a declaration of inadmissibility, whether those individual members thereafter retain the right to claim before another national court any damages which may be envisaged by a provision of national law?
When it has been held by settled case-law of a national court that an individual member of a consortium may also bring an admissible legal action against an act falling within a public procurement procedure, is it compatible with Directive 89/665/EEC, interpreted in the light of Article 6 of the European Convention on Human Rights as a general principle of Community law, to dismiss a legal action as inadmissible, because of a change to that settled case-law, without the person who has brought that legal action first being given either the opportunity to cure the inadmissibility or, in any event, the opportunity to set out, pursuant to the adversarial principle, his views relating to that issue?
13 May 2008
Referral to the ECJ from the Administrative Court of Schleswig
Case C-46/08
Language of the case: German
Referring court
Schleswig-Holsteinisches Verwaltungsgericht
Parties to the main proceedings
Applicant: Carmen Media Group Ltd
Defendants: Land Schleswig-Holstein and Minister for the Interior for the Land Schleswig-Holstein
Questions referred
Is Article 49 EC to be interpreted as meaning that reliance on the freedom to provide services requires that a service provider be permitted, in accordance with the provisions of the Member State in which it is established, to provide that service there as well - in the present case, restriction of the Gibraltar gambling licence to 'offshore bookmaking'?
Is Article 49 EC to be interpreted as precluding a national monopoly on the operation of sports betting and lotteries (with more than a low potential risk of addiction), justified primarily on the grounds of combating the risk of gambling addiction, whereas other games of chance, with considerable potential risk of addiction, may be provided in that Member State by private service providers, and the different legal rules for sports betting and lotteries, on the one hand, and other games of chance, on the other, are based on the differing legislative powers of the Bund and the Länder?
If question (2) is answered in the affirmative:
Is Article 49 EC to be interpreted as precluding national rules which make entitlement to the grant of a licence to operate and arrange games of chance subject to the discretion of the competent licensing authority, even where the conditions for the grant of a licence as laid down in the legislation have been fulfilled?
Is Article 49 EC to be interpreted as precluding national rules prohibiting the operation and brokering of public games of chance on the internet, in particular where, at the same time, although only for a transitional period of one year, their online operation and brokering is permitted, subject to legislation protecting minors and players, for the purposes of the principle of proportionality and to enable two commercial gambling brokers who have previously operated exclusively online to switch over to those distribution channels permitted by the Staatsvertrag?
Language of the case: German
Referring court
Schleswig-Holsteinisches Verwaltungsgericht
Parties to the main proceedings
Applicant: Carmen Media Group Ltd
Defendants: Land Schleswig-Holstein and Minister for the Interior for the Land Schleswig-Holstein
Questions referred
Is Article 49 EC to be interpreted as meaning that reliance on the freedom to provide services requires that a service provider be permitted, in accordance with the provisions of the Member State in which it is established, to provide that service there as well - in the present case, restriction of the Gibraltar gambling licence to 'offshore bookmaking'?
Is Article 49 EC to be interpreted as precluding a national monopoly on the operation of sports betting and lotteries (with more than a low potential risk of addiction), justified primarily on the grounds of combating the risk of gambling addiction, whereas other games of chance, with considerable potential risk of addiction, may be provided in that Member State by private service providers, and the different legal rules for sports betting and lotteries, on the one hand, and other games of chance, on the other, are based on the differing legislative powers of the Bund and the Länder?
If question (2) is answered in the affirmative:
Is Article 49 EC to be interpreted as precluding national rules which make entitlement to the grant of a licence to operate and arrange games of chance subject to the discretion of the competent licensing authority, even where the conditions for the grant of a licence as laid down in the legislation have been fulfilled?
Is Article 49 EC to be interpreted as precluding national rules prohibiting the operation and brokering of public games of chance on the internet, in particular where, at the same time, although only for a transitional period of one year, their online operation and brokering is permitted, subject to legislation protecting minors and players, for the purposes of the principle of proportionality and to enable two commercial gambling brokers who have previously operated exclusively online to switch over to those distribution channels permitted by the Staatsvertrag?
04 May 2008
Online betting in tennis: French Tennis Federation sued for damages
Following claims by the FFT (Fédération Française de Tennis) that services offered by online sports betting operators present a danger to the ethics of sport, bwin, a member of the European Gaming and Betting Association (EGBA), is suing the French Tennis Federation for damages before a Paris court (Tribunal de grande instance).
Following claims by the FFT (Fédération Française de Tennis) that services offered by online sports betting operators present a danger to the ethics of sport, bwin, a member of the European Gaming and Betting Association (EGBA), is suing the French Tennis Federation for damages before a Paris court (Tribunal de grande instance).
The EGBA is keen to emphasise that the nature of the Internet means that it is an extremely efficient tool in providing operators with a perfect audit trail, one that can, where appropriate, be shared with regulators and other authorities in order to trace bets and hence provide valuable evidence in the fight against fraud in sports.
In contrast to the views of the FFT, any match-fixing would penalise bookmakers severely as they take financial risk when setting odds for all sporting events. As a result, any fraud which attempts to influence the outcome of an event would both distort the odds being offered and almost certainly deprive the the sports betting operator from generating any value from the event.
The EGBA works closely with the European Sports Security Association (ESSA)*. ESSA has set up an early warning system, in close cooperation with relevant sports authorities, such as the Association of Tennis Professionals (ATP), that is designed to combat fraud in connection with sporting events.
This early warning system that connects all ESSA members enables the early detection and analysis of irregular betting patterns. When an irregularity is confirmed, the relevant bets are suspended and the information is then passed on immediately to the relevant sports authorities, so that they can carry out the necessary investigations.
* ESSA, which groups the main online gaming and betting operators, works in partnership with numerous sports authorities such as the ATP (Association of Tennis Professionnals), the WTA (Women’s Tennis Association), the ITF (International Tennis Federation), FIFA (Fédération Internationale de Football Association), UEFA (Union of European Football Association) or l’EPFL (European Professional Football League). http://www.eu-ssa.org/
EGBA press release
Following claims by the FFT (Fédération Française de Tennis) that services offered by online sports betting operators present a danger to the ethics of sport, bwin, a member of the European Gaming and Betting Association (EGBA), is suing the French Tennis Federation for damages before a Paris court (Tribunal de grande instance).
The EGBA is keen to emphasise that the nature of the Internet means that it is an extremely efficient tool in providing operators with a perfect audit trail, one that can, where appropriate, be shared with regulators and other authorities in order to trace bets and hence provide valuable evidence in the fight against fraud in sports.
In contrast to the views of the FFT, any match-fixing would penalise bookmakers severely as they take financial risk when setting odds for all sporting events. As a result, any fraud which attempts to influence the outcome of an event would both distort the odds being offered and almost certainly deprive the the sports betting operator from generating any value from the event.
The EGBA works closely with the European Sports Security Association (ESSA)*. ESSA has set up an early warning system, in close cooperation with relevant sports authorities, such as the Association of Tennis Professionals (ATP), that is designed to combat fraud in connection with sporting events.
This early warning system that connects all ESSA members enables the early detection and analysis of irregular betting patterns. When an irregularity is confirmed, the relevant bets are suspended and the information is then passed on immediately to the relevant sports authorities, so that they can carry out the necessary investigations.
* ESSA, which groups the main online gaming and betting operators, works in partnership with numerous sports authorities such as the ATP (Association of Tennis Professionnals), the WTA (Women’s Tennis Association), the ITF (International Tennis Federation), FIFA (Fédération Internationale de Football Association), UEFA (Union of European Football Association) or l’EPFL (European Professional Football League). http://www.eu-ssa.org/
EGBA press release
FFT claim rejected: Belgians will be able to place online bets with EU operators on Roland Garros and Paris Masters 2008
In three rulings issued yesterday in cases brought forward by the French Tennis Federation (FFT) in Belgium against EU licensed operators including EGBA member bwin, the Liège first instance court rejected all allegations of the complainant.
The EGBA welcomes this ruling which confirms that the operators concerned do not violate the FFT’s rights as the event organizers of Roland Garros and Paris Masters. The Belgian players will therefore continue to enjoy this very popular entertainment in 2008.
The judge, taking into consideration the corporate responsibility of the EU operators concerned and the procedures in place “preventing all anonymous bets, ensuring perfect traceability” concluded that these operators had behaved in a prudent and diligent manner. Moreover, the judge took stock of “the various measures, notably for the protection of minors” implemented by bwin, as well as its membership of “ESSA (“European Sport Security Association”) which aims to guarantee the integrity of sports betting offers and to keep sports honest and free from fraud”.
The judge also considered that the “simple mention of the name of a sports event is a necessary indication for the online betting activity” which therefore “cannot be considered as an act of parasitism since its sole purpose is to let the player identify which sport event to place a bet on”.
The Belgian judge ordered the French Tennis Federation to pay € 5000 per case for the recovery of legal costs.
Sigrid Ligné, EGBA Secretary General commented: “EU-licensed bookmakers are professionals that have a high level of expertise, know-how and risk management skills. This has been clearly recognised by the Belgian judge looking at the fact-based evidence to dismiss all the claims in this case.”
EGBA press release
The EGBA welcomes this ruling which confirms that the operators concerned do not violate the FFT’s rights as the event organizers of Roland Garros and Paris Masters. The Belgian players will therefore continue to enjoy this very popular entertainment in 2008.
The judge, taking into consideration the corporate responsibility of the EU operators concerned and the procedures in place “preventing all anonymous bets, ensuring perfect traceability” concluded that these operators had behaved in a prudent and diligent manner. Moreover, the judge took stock of “the various measures, notably for the protection of minors” implemented by bwin, as well as its membership of “ESSA (“European Sport Security Association”) which aims to guarantee the integrity of sports betting offers and to keep sports honest and free from fraud”.
The judge also considered that the “simple mention of the name of a sports event is a necessary indication for the online betting activity” which therefore “cannot be considered as an act of parasitism since its sole purpose is to let the player identify which sport event to place a bet on”.
The Belgian judge ordered the French Tennis Federation to pay € 5000 per case for the recovery of legal costs.
Sigrid Ligné, EGBA Secretary General commented: “EU-licensed bookmakers are professionals that have a high level of expertise, know-how and risk management skills. This has been clearly recognised by the Belgian judge looking at the fact-based evidence to dismiss all the claims in this case.”
EGBA press release
European Court of Justice decides on casino monopoly
Referring court
Landesgericht Linz
Party to the main proceedings
Ernst Engelmann
Questions referred:
Is Article 43 EC (Treaty establishing the European Community, in the version of 2 October 1997, most recently amended by the Treaty of 25 April 2005 concerning the accession of the Republic of Bulgaria and Romania to the European Union (OJ 2005 L 157, p. 11)) to be interpreted as precluding a provision which provides that only public limited companies established in the territory of a particular Member State may there operate games of chance in casinos, thereby necessitating the establishment or acquisition of a company limited by shares in that Member State?
Are Articles 43 EC and 49 EC to be interpreted as precluding a national monopoly on certain types of gaming, such as games of chance in casinos, if there is no consistent and systematic policy whatsoever in the Member State concerned to limit gaming, inasmuch as national licensed organisers encourage participation in gaming - such as public sports betting and lotteries - and advertise such gaming (on television and in newspapers and magazines) in a manner which goes as far as offering a cash payment for a lottery ticket shortly before the lottery draw is made ('TOI TOI TOI - Believe in luck!')?
Are Articles 43 EC and 49 EC to be interpreted as precluding a provision under which all licences granting the right to operate games of chance and casinos are issued for a period of 15 years on the basis of a scheme under which Community competitors (not belonging to that Member State) are excluded from the tendering procedure?
Landesgericht Linz
Party to the main proceedings
Ernst Engelmann
Questions referred:
Is Article 43 EC (Treaty establishing the European Community, in the version of 2 October 1997, most recently amended by the Treaty of 25 April 2005 concerning the accession of the Republic of Bulgaria and Romania to the European Union (OJ 2005 L 157, p. 11)) to be interpreted as precluding a provision which provides that only public limited companies established in the territory of a particular Member State may there operate games of chance in casinos, thereby necessitating the establishment or acquisition of a company limited by shares in that Member State?
Are Articles 43 EC and 49 EC to be interpreted as precluding a national monopoly on certain types of gaming, such as games of chance in casinos, if there is no consistent and systematic policy whatsoever in the Member State concerned to limit gaming, inasmuch as national licensed organisers encourage participation in gaming - such as public sports betting and lotteries - and advertise such gaming (on television and in newspapers and magazines) in a manner which goes as far as offering a cash payment for a lottery ticket shortly before the lottery draw is made ('TOI TOI TOI - Believe in luck!')?
Are Articles 43 EC and 49 EC to be interpreted as precluding a provision under which all licences granting the right to operate games of chance and casinos are issued for a period of 15 years on the basis of a scheme under which Community competitors (not belonging to that Member State) are excluded from the tendering procedure?
21 April 2008
Online gaming industry calls for European cooperation in responsible gaming
Key stakeholders from across the online gaming industry spoke with one voice at the inaugural ‘Responsible Gaming Day’ event at the European Parliament yesterday, calling on the EU for greater cooperation to ensure a safer and more secure online gaming environment for consumers.
The event, the first of its kind to be hosted at the European Parliament, saw a number of MEPs, the EU Slovenian Presidency, regulators and academics join leading industry representatives to exchange best practices and knowledge in the field of responsible gaming.
Norbert Teufelberger, Chairman of the European Gaming and Betting Association (EGBA) said: “No matter how much we do, no matter how many rules we put into place, and no matter how good we are – no solution will be optimal if it is not inclusive and based on the full cooperation and commitment of all stakeholders.”
Christofer Fjellner, MEP (EPP-DE, Sweden) added, “The key ticket to entering national markets is consumer protection. Using this as an argument to protect monopolies is simply letting consumers down.”
Protection of minors was also a key focus of yesterday’s discussions. Andrew Poole, Managing Director, GamCare commented: “There needs to be shared responsibility to minimise underage gaming. Consistent regulation across jurisdictions and proper education are key in achieving an effective industry-wide response to underage gaming.” This view was echoed by Leon Thomas, Head of Regulatory Compliance at PartyGaming who stated “We want governments to help us help consumers.”
The event also featured academia specialised in gaming and betting behaviour research who emphasised the need to use scientific research rather than conjecture when talking about online problem gaming. Richard LaBrie, Ed. D. Harvard Medical School commented: “The advantage of online gaming is that you can track data in real time rather than relying on self reports, which may lack reliability.”
You can find more details of the event on: www.ResponsibleGamingDay.eu
For further information or comment please contact:
Sigrid Ligné: +32 (0) 2 256 7527
sigrid.ligne@egba.eu
The EGBA is an association of the leading European gaming and betting operators Bet-at-home.com, bwin, Digibet, Carmen Media Group, Expekt, Interwetten, PartyGaming and Unibet. EGBA is a Brussels-based nonprofit making association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union.
www.egba.eu
The event, the first of its kind to be hosted at the European Parliament, saw a number of MEPs, the EU Slovenian Presidency, regulators and academics join leading industry representatives to exchange best practices and knowledge in the field of responsible gaming.
Norbert Teufelberger, Chairman of the European Gaming and Betting Association (EGBA) said: “No matter how much we do, no matter how many rules we put into place, and no matter how good we are – no solution will be optimal if it is not inclusive and based on the full cooperation and commitment of all stakeholders.”
Christofer Fjellner, MEP (EPP-DE, Sweden) added, “The key ticket to entering national markets is consumer protection. Using this as an argument to protect monopolies is simply letting consumers down.”
Protection of minors was also a key focus of yesterday’s discussions. Andrew Poole, Managing Director, GamCare commented: “There needs to be shared responsibility to minimise underage gaming. Consistent regulation across jurisdictions and proper education are key in achieving an effective industry-wide response to underage gaming.” This view was echoed by Leon Thomas, Head of Regulatory Compliance at PartyGaming who stated “We want governments to help us help consumers.”
The event also featured academia specialised in gaming and betting behaviour research who emphasised the need to use scientific research rather than conjecture when talking about online problem gaming. Richard LaBrie, Ed. D. Harvard Medical School commented: “The advantage of online gaming is that you can track data in real time rather than relying on self reports, which may lack reliability.”
You can find more details of the event on: www.ResponsibleGamingDay.eu
For further information or comment please contact:
Sigrid Ligné: +32 (0) 2 256 7527
sigrid.ligne@egba.eu
The EGBA is an association of the leading European gaming and betting operators Bet-at-home.com, bwin, Digibet, Carmen Media Group, Expekt, Interwetten, PartyGaming and Unibet. EGBA is a Brussels-based nonprofit making association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union.
www.egba.eu
18 April 2008
Administrative Court of Munich once again grants relief from judicial execution of a prohibition order
by Attorney-at-Law Martin Arendts, M.B.L.-HSG
The Bavarian Adminstrative Court of Munich (Verwaltungsgericht München) has once again granted relief from judicial execution to a sports betting agent, this time against a prohibition order of the Free State of Bavaria (decision of 7 April 2008, file-no. M 16 08.1128). The agent, represented by ARENDTS ANWÄLTE law firm (www.wettrecht.de), can therefore continue to transfer sports betting wagers to a privately owned bookmaker, licensed in the EU. As already mentioned in German Gaming Law updated no. 99, the Administrative Court of Munich has recently changed its existing line of reasoning and, in view of the outcome in the main issue, which it regards to be open, now grants relief from judicial execution to agents with the nationality of an EU member state.
In the opinion of the Administrative Court of Munich, the main proceedings will have to establish whether the normative standards under the Interstate Treaty on Gambling and its Bavarian implementing laws as well as the measures adopted by the Bavarian State Government complied with the ECJ’s requirements for fundamental rights limiting “gambling policies”. The Administrative Court of Munich enjoined the sports betting agent to file for a license. One could reasonably expect from the sports betting agent – this being sufficient at the same time – to make an effort in order to obtain a license and, if need be, to seek judicial clarification after the proceedings of interference (administrative proceedings reviewing an individual administrative decision upon a protest by the party aggrieved) had ended.
from: German Gaming Law updated No. 100
The Bavarian Adminstrative Court of Munich (Verwaltungsgericht München) has once again granted relief from judicial execution to a sports betting agent, this time against a prohibition order of the Free State of Bavaria (decision of 7 April 2008, file-no. M 16 08.1128). The agent, represented by ARENDTS ANWÄLTE law firm (www.wettrecht.de), can therefore continue to transfer sports betting wagers to a privately owned bookmaker, licensed in the EU. As already mentioned in German Gaming Law updated no. 99, the Administrative Court of Munich has recently changed its existing line of reasoning and, in view of the outcome in the main issue, which it regards to be open, now grants relief from judicial execution to agents with the nationality of an EU member state.
In the opinion of the Administrative Court of Munich, the main proceedings will have to establish whether the normative standards under the Interstate Treaty on Gambling and its Bavarian implementing laws as well as the measures adopted by the Bavarian State Government complied with the ECJ’s requirements for fundamental rights limiting “gambling policies”. The Administrative Court of Munich enjoined the sports betting agent to file for a license. One could reasonably expect from the sports betting agent – this being sufficient at the same time – to make an effort in order to obtain a license and, if need be, to seek judicial clarification after the proceedings of interference (administrative proceedings reviewing an individual administrative decision upon a protest by the party aggrieved) had ended.
from: German Gaming Law updated No. 100
County Court of Porto refers sponsoring by bwin to the European Court of Justice
by Attorney-at-Law Martin Arendts, M.B.L.-HSG
The County Court of Porto (Tribunal Judicial de Comarca do Porto) has referred a Portuguese sports betting case concerning the listed bookmaker bwin to the European Court of Justice (ECJ). The proceedings, there registered as Case C-55/08, are the eleventh proceedings concerning the freedom to provide services with regards to sports betting and other games of chance (where eight proceedings from Germany alone are pending, which of the six proceedings of the Administrative Courts of Stuttgart and Giessen were already joined in the course of the last years; concerning the proceedings pending so far, see Arendts, Zeitschrift für Wett- und Glücksspielrecht (ZfWG) 2007, pages 347 et sq.). In its questions referred to the ECJ, the County Court of Porto, in addition to questions concerning the freedom to provide services also raises questions with regards to Community law rules on competition and the prohibition of state monopolies.
The parties of the initial proceedings are the same as the ones of the proceedings already pending since last year registered as Case C-42/07 (cf. German Gaming Law updated No. 79), but with inverted procedural roles. The plaintiff of the current proceedings is Santa Casa da Misericórdia de Lisboa (SCML). SCML is exclusively entitled to operate lotteries and games of chance similar to lotteries under Portuguese law. The defendants it sued are the Portuguese Football League (Liga Portuguesa de Fuetbol Profissional (CA/LPFP) and two bwin companies (the main company of the group being listed on the stock exchange, the affiliated company sued here holding a Gibraltar license). The matter in dispute is the bookmaker’s sponsoring contract with the Portuguese Football League.
The County Court of Porto referred three questions to the ECJ:
• It wants to have clarified, whether the state monopoly on games of chance and bets under Portuguese law complies with Community law rules, in particular with the freedom to provide services, free competition and the prohibition of state monopolies.
• In a second question the Portuguese court inquires about the criteria for interpreting national provisions restricting these Community law principles. It would like to assess whether such restrictions are admissible in the light of Community law rules.
• Finally, the court inquires whether a ban on advertising games of chance complies with the principles of Community law, in particular with the freedom to provide services, free competition, and the prohibition of monopolies, if there is an exception under which Santa da Misericórdia de Lisboa can advertise the games of chance it organises.
Due to these preliminary questions, the ECJ will be able to comment on the significance of the competition rules of the EC Treaty (Articles 81 et seq. EC Treaty) for the gambling- and betting sector. This could have considerable implications on the German state monopoly. Moreover, the ECJ will also be able to comment on the legal provisions regarding the advertisement of sports betting and games of chance. Millions, which are so far lost to football associations and clubs due to the ban on advertisement for private operators, are at stake. Sponsoring by bwin has already effectuated dozens of lawsuits in Germany as well.
from: German Gaming Law updated No. 100
The County Court of Porto (Tribunal Judicial de Comarca do Porto) has referred a Portuguese sports betting case concerning the listed bookmaker bwin to the European Court of Justice (ECJ). The proceedings, there registered as Case C-55/08, are the eleventh proceedings concerning the freedom to provide services with regards to sports betting and other games of chance (where eight proceedings from Germany alone are pending, which of the six proceedings of the Administrative Courts of Stuttgart and Giessen were already joined in the course of the last years; concerning the proceedings pending so far, see Arendts, Zeitschrift für Wett- und Glücksspielrecht (ZfWG) 2007, pages 347 et sq.). In its questions referred to the ECJ, the County Court of Porto, in addition to questions concerning the freedom to provide services also raises questions with regards to Community law rules on competition and the prohibition of state monopolies.
The parties of the initial proceedings are the same as the ones of the proceedings already pending since last year registered as Case C-42/07 (cf. German Gaming Law updated No. 79), but with inverted procedural roles. The plaintiff of the current proceedings is Santa Casa da Misericórdia de Lisboa (SCML). SCML is exclusively entitled to operate lotteries and games of chance similar to lotteries under Portuguese law. The defendants it sued are the Portuguese Football League (Liga Portuguesa de Fuetbol Profissional (CA/LPFP) and two bwin companies (the main company of the group being listed on the stock exchange, the affiliated company sued here holding a Gibraltar license). The matter in dispute is the bookmaker’s sponsoring contract with the Portuguese Football League.
The County Court of Porto referred three questions to the ECJ:
• It wants to have clarified, whether the state monopoly on games of chance and bets under Portuguese law complies with Community law rules, in particular with the freedom to provide services, free competition and the prohibition of state monopolies.
• In a second question the Portuguese court inquires about the criteria for interpreting national provisions restricting these Community law principles. It would like to assess whether such restrictions are admissible in the light of Community law rules.
• Finally, the court inquires whether a ban on advertising games of chance complies with the principles of Community law, in particular with the freedom to provide services, free competition, and the prohibition of monopolies, if there is an exception under which Santa da Misericórdia de Lisboa can advertise the games of chance it organises.
Due to these preliminary questions, the ECJ will be able to comment on the significance of the competition rules of the EC Treaty (Articles 81 et seq. EC Treaty) for the gambling- and betting sector. This could have considerable implications on the German state monopoly. Moreover, the ECJ will also be able to comment on the legal provisions regarding the advertisement of sports betting and games of chance. Millions, which are so far lost to football associations and clubs due to the ban on advertisement for private operators, are at stake. Sponsoring by bwin has already effectuated dozens of lawsuits in Germany as well.
from: German Gaming Law updated No. 100
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