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