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 This prohibition which was affirmed in the appeal, was repealed by a fundamental decision of the Court of Cassation (Cour de Cassation) of 10 July 2007, in particular reasoned on the basis of Community law.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
28 July 2008
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
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
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".
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