Consequences of the Ladbrokes decision

quotation from World Online Gambling Law Report, May 2007

Ladbrokes: key guidance on restriction of services

by Martin Arendts, M.B.L.-HSG

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In my view, the quintessence of the Ladbrokes decision is clearly the intensified analysis in the assessment of gambling services. Questions which recently have been regarded as purely political or which the ECJ mentioned incidentally have now come under the strict scrutiny of the judges.

The consistency test, developed by the ECJ in several decisions over the years, has now become a very detailed examination of the political aims and objectives and an explicit verification of the behaviour of the monopoly operators. The judges will now
have to address complex and discretionary issues, such as whether the advertising of the gambling and betting services is more informative than evocative in nature. National measures, aims put forward by the state or objectives are no longer sheltered from judicial review. The only exception which remains in the state’s discretion is the level of protection sought. Even then, the judges will have to decide whether the national gaming policy is indeed consistent and systematic on one hand, or whether it may be necessary to distinguish between the different games on the other hand.

The Ladbrokes as well as the Gaming Machines decisions provide for an extensive check list of questions the courts will have to answer in the affirmative in order to uphold a monopoly. Therefore, I do not comprehend why Norsk Tipping, European Lotteries as well as Deutscher Lotto- und Totoblock publicly announced that they are pleased with the Ladbrokes decision. The present legal regulations in most EEA Member States certainly do not fulfil the requirements the ECJ and the EFTA Court have set out. For example, Germany has a very inconsistent policy and no uniform level of protection. The same holds true for most other EU Member States with a gambling monopoly.

The plan to uphold a national monopoly at any cost will backfire in the long run, as judges and not politicians will have a greater say on the subject. This intensified judicial review will have a strong impact on national jurisdictions and national legislation issues. In this respect, it will certainly no longer be sufficient that a national court can simply decide that combating gambling addiction justifies any restriction of the fundamental freedoms. The State will have to demonstrate that only a monopoly will provide for a lower level of gambling addiction in society than would be the case without restrictions on free movement. The national court will have to ascertain the suitability and necessity of national measures in detail. Also the legislator will have to assess the potential risks associated with different games and decide on a uniform system of protection.