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
19 June 2008
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
Administrative Court of Munich grants sports betting agent relief from judicial execution of a prohibition order
by Attorney-at-Law Martin Arendts, M.B.L.-HSG
In a new decision, the Bavarian Administrative Court of Munich (Verwaltungsgericht München) granted a sports betting agent relief from judicial execution of a prohibition order issued by the city of Munich (decision of 7 April 2008, file-no. M 16 08.851). The sports betting agent, who’s case was pleaded by ARENDTS ANWÄLTE law firm (www.wettrecht.de), can thus keep operating his business and transferring sports bets to a privately owned and state licensed bookmaker in the EU. The Administrative Court of Munich has thus changed its previous line of reasoning, after having refused to grant relief from judicial execution in similar cases in recent years. The court granted relief subject to the sports betting agent filing for a license under gambling law.
In the court’s opinion, the outcome of the main proceeding can be estimated to be open. The outcome depended significantly upon the question, whether the normative standards under the Interstate Treaty on Gambling and its Bavarian implementing act, as well as the measures adopted by the Bavarian state government complied with the ECJ’s requirements for fundamental rights limiting “gambling policies”. This had to be determined comprehensively during the main proceedings in application of the requirements set forth by the Federal Constitutional Court (Bundesverfassungsgericht) and the European Court of Justice (ECJ). The following criteria were decisive: whether an active prevention policy was provided for the state offer, to which extent advertisement would be placed, how large the distribution channels would be and to which extent sports bets would be made a good of everyday life. One also had to examine, what risk potential was inherent to the individual gambling sectors and whether, pursuant to the ECJ’s jurisdiction, one did not have to find a “comprehensive solution” for the entire gaming sector.
The Administrative Court of Munich enjoined the sports betting agent to file for a license, even if granting of the same could be ruled out under the current Interstate Treaty on Gambling. 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.
In a new decision, the Bavarian Administrative Court of Munich (Verwaltungsgericht München) granted a sports betting agent relief from judicial execution of a prohibition order issued by the city of Munich (decision of 7 April 2008, file-no. M 16 08.851). The sports betting agent, who’s case was pleaded by ARENDTS ANWÄLTE law firm (www.wettrecht.de), can thus keep operating his business and transferring sports bets to a privately owned and state licensed bookmaker in the EU. The Administrative Court of Munich has thus changed its previous line of reasoning, after having refused to grant relief from judicial execution in similar cases in recent years. The court granted relief subject to the sports betting agent filing for a license under gambling law.
In the court’s opinion, the outcome of the main proceeding can be estimated to be open. The outcome depended significantly upon the question, whether the normative standards under the Interstate Treaty on Gambling and its Bavarian implementing act, as well as the measures adopted by the Bavarian state government complied with the ECJ’s requirements for fundamental rights limiting “gambling policies”. This had to be determined comprehensively during the main proceedings in application of the requirements set forth by the Federal Constitutional Court (Bundesverfassungsgericht) and the European Court of Justice (ECJ). The following criteria were decisive: whether an active prevention policy was provided for the state offer, to which extent advertisement would be placed, how large the distribution channels would be and to which extent sports bets would be made a good of everyday life. One also had to examine, what risk potential was inherent to the individual gambling sectors and whether, pursuant to the ECJ’s jurisdiction, one did not have to find a “comprehensive solution” for the entire gaming sector.
The Administrative Court of Munich enjoined the sports betting agent to file for a license, even if granting of the same could be ruled out under the current Interstate Treaty on Gambling. 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.
16 April 2008
Sports betting: new referral to the European Court of Justice
Reference for a preliminary ruling from the Tribunal Judicial da Comarca do Porto (Portugal) lodged on 13 February 2008 -
Santa Casa da Misericórdia de Lisboa v Liga Portuguesa de Fuetbol Profissional (CA/LPFP), Baw International Ltd e Betandwin.Com Interactive Entertainment
(Case C-55/08)
Referring court
Tribunal Judicial da Comarca do Porto (Portugal)
Parties to the main proceedings
Applicant: Santa Casa da Misericórdia de Lisboa
Defendants: Liga Portuguesa de Fuetbol Profissional (CA/LPFP), Baw International Ltd and Betandwin.Com Interactive Entertainment
Questions referred
1. Is the fact that the State reserves to itself the 'right to run games of luck or chance' (Article 9 of DL 422/89 of 2 December, amended by DL 10/95 of 19 January 1995 and by DL 40/2005 of 17 February 2005) and the right to 'organise pool betting systems' (Article 1 of DL 84/85 of 17 December 1985, amended by DL 317/2002) compatible with the rules of Community law ... laying down the principles of the freedom to provide services, free competition and prohibition of State monopolies?
2. What criteria should guide interpretation of national legislation restricting those principles, for the purposes of determining whether such restriction is admissible in light of the rules of Community law ...?
3. Is the prohibition of advertising games of luck and chance when forming the substantive content of the message, having regard to the exception relating to the advertising of games organised by the Santa Casa da Misericórdia de Lisboa, compatible with the rules of Community law ... laying down the principles of the freedom to provide services, free competition and prohibition of State monopolies?
Santa Casa da Misericórdia de Lisboa v Liga Portuguesa de Fuetbol Profissional (CA/LPFP), Baw International Ltd e Betandwin.Com Interactive Entertainment
(Case C-55/08)
Referring court
Tribunal Judicial da Comarca do Porto (Portugal)
Parties to the main proceedings
Applicant: Santa Casa da Misericórdia de Lisboa
Defendants: Liga Portuguesa de Fuetbol Profissional (CA/LPFP), Baw International Ltd and Betandwin.Com Interactive Entertainment
Questions referred
1. Is the fact that the State reserves to itself the 'right to run games of luck or chance' (Article 9 of DL 422/89 of 2 December, amended by DL 10/95 of 19 January 1995 and by DL 40/2005 of 17 February 2005) and the right to 'organise pool betting systems' (Article 1 of DL 84/85 of 17 December 1985, amended by DL 317/2002) compatible with the rules of Community law ... laying down the principles of the freedom to provide services, free competition and prohibition of State monopolies?
2. What criteria should guide interpretation of national legislation restricting those principles, for the purposes of determining whether such restriction is admissible in light of the rules of Community law ...?
3. Is the prohibition of advertising games of luck and chance when forming the substantive content of the message, having regard to the exception relating to the advertising of games organised by the Santa Casa da Misericórdia de Lisboa, compatible with the rules of Community law ... laying down the principles of the freedom to provide services, free competition and prohibition of State monopolies?
17 March 2008
Court of Appeal of Düsseldorf: state lottery- and sports betting monopoly is not justified
Court calls for a fair tender procedure for a privately owned gambling operator
by Attorney-at-Law Martin Arendts, M.B.L.-HSG
By decision of 3 March 2008 (file-no. VII-Kart 19/07 (V)) the First Cartel Division of the Court of Appeal of Düsseldorf (Oberlandesgericht Düsseldorf) dismissed the motions of the State of Rhineland-Palatinate (Land Rheinland-Pfalz) and of Lotto Rheinland-Pfalz GmbH against a decision of the German Federal Cartel Office (Bundeskartellamt) to prohibit their merger. In its ratio decidendi the Court of Appeal of Düsseldorf raises fundamental doubts as to the legality of a state monopoly and, referring to the European Commission’s legal opinion on this matter, calls for a tender of the license so far granted to Lotto Rheinland-Pfalz GmbH.
By filing motions with the Court of Appeal, the state and the lottery company intended to obtain a decision, allowing for the state to take over the controlling majority of the lottery company, contrary to the Federal Cartel Office’s decision. The Federal Cartel Office had prohibited the State of Rhineland-Palatinate to acquire a majority interest of 51% in November 2007. Doing so, in its press release of 29 November 2007, the Federal Cartel Office emphasised that even highly regulated sectors such as the gambling industry were not “competition free zones”. Anti-trust law was applicable to them without any restriction.
Lotto Rheinland-Pfalz GmbH is the only lottery company in Germany not owned or controlled by the state. The shareholders of this GmbH (equivalent of a Ltd.) keep being the three sports federations of Rhineland-Palatinate (Sportbund Pfalz e.V., Sportbund Rheinhessen e.V. and Sportbund Rheinland e.V.). However, they were willing to cede a majority interest in return for an adequate guarantee by the state.
The Federal Cartel Office voiced considerable anti-trust related doubts regarding this nationalisation. With its lottery products “Zahlenlotto”, “Spiel 77”, “Super 6”, “Keno” and “Glücksspirale”, which are sold over more than 1200 lottery counters, Lotto Rheinland-Pfalz GmbH disposes of a dominant market position. The State of Rhineland-Palatinate’s planned majority interest would even increase this dominant position. The merger would lead to a “structural alliance” between Lotto Rheinland-Pfalz GmbH and Süddeutsche Klassenlotterie (a lottery operated by several German states), which would have largely eliminated the competition existing so far.
In its decision, the Court of Appeal of Düsseldorf considers the motions to be inadmissible already. Subsequently the court issues fundamental explanations as to the legitimacy of a state monopoly. According to the jurisprudence of the German Federal Constitutional Court and the ECJ a state lottery- and betting monopoly was only legitimate “in order and only as far as necessary to attain legitimate goals of common welfare”. The Court of Appeal doubts this with regards to the argument of fighting gambling addiction, which keeps being pleaded as justification:
“Fighting gaming- and betting addiction as well as effective consumer protection can (especially) be achieved by setting respective legal requirements and standards for the gambling business, and by adapted requirements for license holders as well as by a consequent supervision of the gambling operations. It is not necessary, that, additionally, the State of Rhineland-Palatinate has a majority interest in the operations entrusted with the lottery business and to exert dominant influence on the operation by means of its position as a shareholder.”
In the court’s opinion, a monopoly does therefore not stand up to the examination of its commensurability, since there are milder (and equally effective) means to combat gambling addiction and to ensure consumer protection.
The rule of non-discrimination does not necessitate this merger either. The state can have its gambling business operated by a private third party company. However, a tender was required to do so:
“However, it is necessary that the rule of non-discrimination is complied with and that a discrimination free tender procedure takes place accordingly. Should – as the European Commission seems to assume – the Lotto GmbH have been entrusted with the lottery business without invitation to tender, the private lottery undertaking will have to be determined in a transparent and fair competitive bidding in the future.“
The Court of Appeal granted leave to file a special appeal (Rechtsbeschwerde) with the Federal Court of Justice (Bundesgerichtshof). It can be assumed that the Federal Court of Justice will soon have to decide on the ban of this merger as well.
by Attorney-at-Law Martin Arendts, M.B.L.-HSG
By decision of 3 March 2008 (file-no. VII-Kart 19/07 (V)) the First Cartel Division of the Court of Appeal of Düsseldorf (Oberlandesgericht Düsseldorf) dismissed the motions of the State of Rhineland-Palatinate (Land Rheinland-Pfalz) and of Lotto Rheinland-Pfalz GmbH against a decision of the German Federal Cartel Office (Bundeskartellamt) to prohibit their merger. In its ratio decidendi the Court of Appeal of Düsseldorf raises fundamental doubts as to the legality of a state monopoly and, referring to the European Commission’s legal opinion on this matter, calls for a tender of the license so far granted to Lotto Rheinland-Pfalz GmbH.
By filing motions with the Court of Appeal, the state and the lottery company intended to obtain a decision, allowing for the state to take over the controlling majority of the lottery company, contrary to the Federal Cartel Office’s decision. The Federal Cartel Office had prohibited the State of Rhineland-Palatinate to acquire a majority interest of 51% in November 2007. Doing so, in its press release of 29 November 2007, the Federal Cartel Office emphasised that even highly regulated sectors such as the gambling industry were not “competition free zones”. Anti-trust law was applicable to them without any restriction.
Lotto Rheinland-Pfalz GmbH is the only lottery company in Germany not owned or controlled by the state. The shareholders of this GmbH (equivalent of a Ltd.) keep being the three sports federations of Rhineland-Palatinate (Sportbund Pfalz e.V., Sportbund Rheinhessen e.V. and Sportbund Rheinland e.V.). However, they were willing to cede a majority interest in return for an adequate guarantee by the state.
The Federal Cartel Office voiced considerable anti-trust related doubts regarding this nationalisation. With its lottery products “Zahlenlotto”, “Spiel 77”, “Super 6”, “Keno” and “Glücksspirale”, which are sold over more than 1200 lottery counters, Lotto Rheinland-Pfalz GmbH disposes of a dominant market position. The State of Rhineland-Palatinate’s planned majority interest would even increase this dominant position. The merger would lead to a “structural alliance” between Lotto Rheinland-Pfalz GmbH and Süddeutsche Klassenlotterie (a lottery operated by several German states), which would have largely eliminated the competition existing so far.
In its decision, the Court of Appeal of Düsseldorf considers the motions to be inadmissible already. Subsequently the court issues fundamental explanations as to the legitimacy of a state monopoly. According to the jurisprudence of the German Federal Constitutional Court and the ECJ a state lottery- and betting monopoly was only legitimate “in order and only as far as necessary to attain legitimate goals of common welfare”. The Court of Appeal doubts this with regards to the argument of fighting gambling addiction, which keeps being pleaded as justification:
“Fighting gaming- and betting addiction as well as effective consumer protection can (especially) be achieved by setting respective legal requirements and standards for the gambling business, and by adapted requirements for license holders as well as by a consequent supervision of the gambling operations. It is not necessary, that, additionally, the State of Rhineland-Palatinate has a majority interest in the operations entrusted with the lottery business and to exert dominant influence on the operation by means of its position as a shareholder.”
In the court’s opinion, a monopoly does therefore not stand up to the examination of its commensurability, since there are milder (and equally effective) means to combat gambling addiction and to ensure consumer protection.
The rule of non-discrimination does not necessitate this merger either. The state can have its gambling business operated by a private third party company. However, a tender was required to do so:
“However, it is necessary that the rule of non-discrimination is complied with and that a discrimination free tender procedure takes place accordingly. Should – as the European Commission seems to assume – the Lotto GmbH have been entrusted with the lottery business without invitation to tender, the private lottery undertaking will have to be determined in a transparent and fair competitive bidding in the future.“
The Court of Appeal granted leave to file a special appeal (Rechtsbeschwerde) with the Federal Court of Justice (Bundesgerichtshof). It can be assumed that the Federal Court of Justice will soon have to decide on the ban of this merger as well.
German Federal Court of Justice dismisses motion against enforcement order from bwin International Ltd. – Final ruling on the merits expected in 2009
Since 2002, bwin International Ltd. has been providing games of chance to its customers under the www.bwin.com domain (formerly www.betandwin.com) – among others to German residents. In September 2004, Westdeutsche Lotterie GmbH & Co OHG ("Westlotto") sought a judgement against bwin International Ltd. to prevent the Company from organizing, brokering or advertising sports betting, casino and lottery games in Germany.
In February 2006 the Regional Court of Cologne ruled in favour of Westlotto at the first instance. In September 2007, the Higher Regional Court of Cologne confirmed the judgement of the court of first instance, declaring it to be enforceable. bwin lodged an appeal with the Federal Court of Justice against the judgement by the Higher Regional Court of Cologne. Although the Federal Court of Justice is not expected to pass a final ruling on the merits for the next 12 to 18 months, Westlotto instituted enforcement proceedings against bwin in November 2007.
bwin filed a motion to the Federal Court of Justice requesting the court to suspend enforcement proceedings until the court has passed a final ruling on the merits. In a decision served on 14 March 2008, the Federal Court of Justice rejected the motion filed by bwin International Ltd. on procedural grounds. Until a final ruling by the Federal Court of Justice on the merits, Westlotto may now apply for further enforcement orders. If the Company eventually fails to win the appeal proceedings before the Federal Court of Justice, or if a political solution is not found in the interim, any penalties that may be imposed as a result of enforcement orders could have a material adverse effect on the Company’s results and financial position. Should the Federal Court of Justice decide in favour of bwin, the Company reserves the right to claim for damages.
In view of the latest legal developments, bwin and its legal advisors are confident that they will win the case against Westlotto. The European Commission is also of the opinion that the current legal situation in Germany is incompatible with primary EU legislation, and has therefore instituted further infringement proceedings against Germany. Furthermore, there are several preliminary rulings originating from German courts still pending judgement by the European Court of Justice. bwin therefore assumes that it will be able to maintain unchanged the products offered for German clients on the www.bwin.com domain, notwithstanding this judgement by the Federal Court of Justice.
bwin e.K., which offers the Company's products on www.bwin.de under a licence issued by the former German Democratic Republic, is not a party to these proceedings before the Federal Court of Justice.
ad hoc release of 17 March 2007
In February 2006 the Regional Court of Cologne ruled in favour of Westlotto at the first instance. In September 2007, the Higher Regional Court of Cologne confirmed the judgement of the court of first instance, declaring it to be enforceable. bwin lodged an appeal with the Federal Court of Justice against the judgement by the Higher Regional Court of Cologne. Although the Federal Court of Justice is not expected to pass a final ruling on the merits for the next 12 to 18 months, Westlotto instituted enforcement proceedings against bwin in November 2007.
bwin filed a motion to the Federal Court of Justice requesting the court to suspend enforcement proceedings until the court has passed a final ruling on the merits. In a decision served on 14 March 2008, the Federal Court of Justice rejected the motion filed by bwin International Ltd. on procedural grounds. Until a final ruling by the Federal Court of Justice on the merits, Westlotto may now apply for further enforcement orders. If the Company eventually fails to win the appeal proceedings before the Federal Court of Justice, or if a political solution is not found in the interim, any penalties that may be imposed as a result of enforcement orders could have a material adverse effect on the Company’s results and financial position. Should the Federal Court of Justice decide in favour of bwin, the Company reserves the right to claim for damages.
In view of the latest legal developments, bwin and its legal advisors are confident that they will win the case against Westlotto. The European Commission is also of the opinion that the current legal situation in Germany is incompatible with primary EU legislation, and has therefore instituted further infringement proceedings against Germany. Furthermore, there are several preliminary rulings originating from German courts still pending judgement by the European Court of Justice. bwin therefore assumes that it will be able to maintain unchanged the products offered for German clients on the www.bwin.com domain, notwithstanding this judgement by the Federal Court of Justice.
bwin e.K., which offers the Company's products on www.bwin.de under a licence issued by the former German Democratic Republic, is not a party to these proceedings before the Federal Court of Justice.
ad hoc release of 17 March 2007
Subscribe to:
Posts (Atom)