EFTA Court pronounces Ladbrokes decision

The EFTA Court delivered its judgement in Case E-3/06 (Ladbrokes Ltd. v Staten v/Kultur- og kirkedepartementet and Staten v/Landbruks- og matdepartementet) in open Court today. The Court decided:

1.–3. In order not to be precluded by Articles 31 and 36 EEA, national legislation which establishes (1) that certain forms of gaming may only be offered by a State-owned gaming company which channels its profits to cultural and sports purposes, (2) that a licence to offer horserace betting may only be granted to non-profit organisations or companies whose aim is to support horse breeding, or (3) that licences to offer certain forms of gaming may only be granted to non-profit organisations and associations with a humanitarian or socially beneficial purpose, must pursue legitimate aims such as fighting gambling addiction and maintaining public order. The legitimate aims must be pursued in a suitable and consistent manner, and the legislation must not go beyond what is necessary in order to achieve the aims in question.

4. Under EEA law, the financing of humanitarian and socially beneficial purposes may not constitute the real justification for legislation such as the legislation at issue, but only a beneficial consequence which is incidental, in the meaning that it is accessory. Preventing private profit as an aim in itself may, on the other hand, in principle justify such legislation. However, the national gaming policy must then reflect the moral concerns underlying this aim.

5. Under Article 36 EEA, to the extent the national court concludes that the exclusive rights systems established under the Gaming Act and the Totalisator Act constitute lawful restrictions, national authorities have the right to ban the provision and marketing of games of chance from abroad, no matter whether or not these are lawful in their State of origin. The same applies to the extent the national court concludes that the exclusion of commercial operators under the Lottery Act constitutes a lawful restriction on the free movement of services.
To the extent the national court comes to the conclusion that the bans implied in the three Acts on commercial operators organising any form of game of chance are not justified, the answer must be that a licence may still be required in view of possible differences in the level of protection throughout the EEA. However, national measures must not be excessive in relation to the aims pursued. They have to be non-discriminatory and must take into account the requirements already fulfilled by the provider of the services for the pursuit of activities in the home State.