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
21 July 2008
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".
19 June 2008
Ladbrokes wins referral of case to ECJ
Ladbrokes, the world's leading bookmaker, today welcomed the decision of the Dutch Supreme Court to refer its case to the ECJ. The appeal related to an injunction taken out in 2002 that prevents Ladbrokes from accepting sports bets from Dutch citizens on Ladbrokes.com.
The court's decision means that the European law issues which are fundamental to the case, relating to the right under the Treaty of Rome for a well regulated online betting company to offer its services across borders will now be heard by Europe's highest court.
Ladbrokes Managing Director of eGaming John O'Reilly commented: "We have fought for 6 years against Dutch protectionism and finally we have won the referral to the European Court of Justice. At last the Dutch courts have recognised that its laws on betting must be viewed in the context of European law. Under the Treaty of Rome we should be able to provide our services across borders in competition with the Dutch monopoly, but at the moment we are unfairly prevented from doing so."
The Dutch Court has referred the following three questions to the European Court of Justice to guide them on how they should deal with the case in the context of European law.
1. Under European case law (Gambelli etc) is it allowed to make the offering of gambling attractive through the introduction of new games and through publicity in order to keep (potential) gamblers away from illegal offerings?
2. Does the national judge in each case have to decide whether the application of the national policy re gambling (e.g. in this case an order to block a website) in each specific case is justified?
3. Can a member state on the basis of a closed licence system prevent the offering of gambling via the internet by a company who has a licence in another member state?
Ladbrokes has previously complained to the EU Commission about the situation in the Netherlands where it has been restricted from accepting Dutch customers at www.ladbrokes.com despite the fact it does not advertise in the Netherlands or offer a Dutch language service. The Netherlands is one of the countries that may be referred to the ECJ by the EU Commission, which instigated proceedings against the Netherlands in 2006 citing concerns about Dutch laws restricting access to its gambling and sports betting markets.
press release of Ladbrokes
The court's decision means that the European law issues which are fundamental to the case, relating to the right under the Treaty of Rome for a well regulated online betting company to offer its services across borders will now be heard by Europe's highest court.
Ladbrokes Managing Director of eGaming John O'Reilly commented: "We have fought for 6 years against Dutch protectionism and finally we have won the referral to the European Court of Justice. At last the Dutch courts have recognised that its laws on betting must be viewed in the context of European law. Under the Treaty of Rome we should be able to provide our services across borders in competition with the Dutch monopoly, but at the moment we are unfairly prevented from doing so."
The Dutch Court has referred the following three questions to the European Court of Justice to guide them on how they should deal with the case in the context of European law.
1. Under European case law (Gambelli etc) is it allowed to make the offering of gambling attractive through the introduction of new games and through publicity in order to keep (potential) gamblers away from illegal offerings?
2. Does the national judge in each case have to decide whether the application of the national policy re gambling (e.g. in this case an order to block a website) in each specific case is justified?
3. Can a member state on the basis of a closed licence system prevent the offering of gambling via the internet by a company who has a licence in another member state?
Ladbrokes has previously complained to the EU Commission about the situation in the Netherlands where it has been restricted from accepting Dutch customers at www.ladbrokes.com despite the fact it does not advertise in the Netherlands or offer a Dutch language service. The Netherlands is one of the countries that may be referred to the ECJ by the EU Commission, which instigated proceedings against the Netherlands in 2006 citing concerns about Dutch laws restricting access to its gambling and sports betting markets.
press release of Ladbrokes
12 June 2008
Gaming machines: European Commission brings further action against Greece
Commission of the European Communities v Hellenic Republic
(Case C-109/08)
Language of the case: Greek
Parties
Applicant: Commission of the European Communities (represented by: Maria Patakia)
Defendant: Hellenic Republic
Form of order sought
declare that, by failing to take the necessary measures to comply with the judgment delivered by the Court of Justice on 26 October 2006 in Case C-65/05, the Hellenic Republic has failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/EC; 1
order the Hellenic Republic to pay to the Commission a proposed penalty payment of EUR 31 798.80 for each day of delay in complying with the judgment which was delivered in Case C-65/05, from the day when judgment is delivered in the present case until the day when the judgment delivered in Case C-65/05 has been complied with;
order the Hellenic Republic to pay to the Commission a daily lump sum of EUR 9 636, from the day when judgment was delivered in Case C-65/05 until the date on which judgment is delivered in the present case or, if earlier, the date on which the judgment in Case C-65/05 is complied with;
order the Hellenic Republic to pay the costs.
Pleas in law and main arguments
1. On 26 October 2006 the Court of Justice of the European Communities delivered a judgment in which it declared as follows:
by inserting into Articles 2(1) and 3 of Law No 3037/2002 the prohibition, subject to the criminal and administrative penalties set out in Articles 4 and 5 of the same law, on the installation and operation of all electrical, electromechanical and electronic games, including all computer games, on all public or private premises apart from casinos, the Hellenic Republic had failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/CE of the European Parliament and of the Council laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services, as amended by Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998.
2. After calling upon the Hellenic Republic to inform it of any regulatory measures to comply with the Court's judgment, the Commission sent it a letter of formal notice and a reasoned opinion, in accordance with Article 228 EC. The Hellenic Republic replied to neither.
3. Consequently, the Commission recorded that the Hellenic Republic had failed to take the necessary measures to comply with the Court's judgment and decided to bring proceedings against it before the Court in accordance with Article 228 EC.
4. By its action the Commission, first, asks the Court to declare that the Hellenic Republic has not complied with the judgment delivered by the Court on 26 October 2006 in Case C-65/05 and has therefore failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/EC and, second, proposes that the Court order the Hellenic Republic to pay to the Commission:
- a penalty payment of EUR 31 798.80 for each day of delay in complying with the judgment which was delivered in Case C-65/05, from the day when judgment is delivered in the present case until the day when the judgment delivered in Case C-65/05 has been complied with;
- a daily lump sum of EUR 9 636, from the day when judgment was delivered in Case C-65/05 until the date on which judgment is delivered in the present case or, if earlier, the date on which the judgment in Case C-65/05 is complied with.
____________
1 - Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations (OJ No L 204, 21.7.1998, p. 37).
(Case C-109/08)
Language of the case: Greek
Parties
Applicant: Commission of the European Communities (represented by: Maria Patakia)
Defendant: Hellenic Republic
Form of order sought
declare that, by failing to take the necessary measures to comply with the judgment delivered by the Court of Justice on 26 October 2006 in Case C-65/05, the Hellenic Republic has failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/EC; 1
order the Hellenic Republic to pay to the Commission a proposed penalty payment of EUR 31 798.80 for each day of delay in complying with the judgment which was delivered in Case C-65/05, from the day when judgment is delivered in the present case until the day when the judgment delivered in Case C-65/05 has been complied with;
order the Hellenic Republic to pay to the Commission a daily lump sum of EUR 9 636, from the day when judgment was delivered in Case C-65/05 until the date on which judgment is delivered in the present case or, if earlier, the date on which the judgment in Case C-65/05 is complied with;
order the Hellenic Republic to pay the costs.
Pleas in law and main arguments
1. On 26 October 2006 the Court of Justice of the European Communities delivered a judgment in which it declared as follows:
by inserting into Articles 2(1) and 3 of Law No 3037/2002 the prohibition, subject to the criminal and administrative penalties set out in Articles 4 and 5 of the same law, on the installation and operation of all electrical, electromechanical and electronic games, including all computer games, on all public or private premises apart from casinos, the Hellenic Republic had failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/CE of the European Parliament and of the Council laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services, as amended by Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998.
2. After calling upon the Hellenic Republic to inform it of any regulatory measures to comply with the Court's judgment, the Commission sent it a letter of formal notice and a reasoned opinion, in accordance with Article 228 EC. The Hellenic Republic replied to neither.
3. Consequently, the Commission recorded that the Hellenic Republic had failed to take the necessary measures to comply with the Court's judgment and decided to bring proceedings against it before the Court in accordance with Article 228 EC.
4. By its action the Commission, first, asks the Court to declare that the Hellenic Republic has not complied with the judgment delivered by the Court on 26 October 2006 in Case C-65/05 and has therefore failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/EC and, second, proposes that the Court order the Hellenic Republic to pay to the Commission:
- a penalty payment of EUR 31 798.80 for each day of delay in complying with the judgment which was delivered in Case C-65/05, from the day when judgment is delivered in the present case until the day when the judgment delivered in Case C-65/05 has been complied with;
- a daily lump sum of EUR 9 636, from the day when judgment was delivered in Case C-65/05 until the date on which judgment is delivered in the present case or, if earlier, the date on which the judgment in Case C-65/05 is complied with.
____________
1 - Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations (OJ No L 204, 21.7.1998, p. 37).
29 May 2008
Discriminatory taxes on lottery and betting winning: European Commission files suit against Spain
Action brought on 15 April 2008 - Commission of the European Communities v Kingdom of Spain
Case C-153/08
Parties
Applicant: Commission of the European Communities (represented by: R. Lyal and L. Lozano Palacios, acting as Agents)
Defendant: Kingdom of Spain
Form of order sought
The applicant claims that the Court should:
declare that, by maintaining in force fiscal legislation taxing winnings from all types of lotteries, games and betting organised outside the Kingdom of Spain, whereas winnings obtained from certain lotteries, games and betting organised within the Kingdom of Spain are exempted from income tax, the Kingdom of Spain has failed to fulfil its obligations under Community law and, in particular, under Article 49 EC and Article 36 of the Agreement on the European Economic Area;
order the Kingdom of Spain to pay the costs.
Pleas in law and main arguments
Under Spanish legislation, winnings from lotteries and betting organised by Loterías y Apuestas del Estado (the Spanish public-law body in charge of lotteries and betting) or by bodies or entities of the Comunidades Autónomas (Autonomous Communities), and winnings from lotteries organised by the Spanish Red Cross or the Organización Nacional de Ciegos Españoles (Spanish national association for the blind) are exempt from income tax. However, income from lotteries, games or betting organised by other national bodies or by foreign bodies, including those established in Member States of the European Union or the European Economic Area, is added to the taxable amount and subject to progressive rates of taxation.
Relying in particular on Lindman and Safir, the Commission points out that, according to that line of authority, the organising of lotteries is to be regarded as a "service" for the purposes of the Treaty. Also according to that case-law, Article 49 EC prohibits any restriction on the freedom to provide services, or any obstacle to that freedom - even where such a restriction or obstacle applies equally to national providers of services and to those of the other Member States - and precludes the application of any rule of national law the effect of which is to make it more difficult to provide services between Member States than to provide services wholly within a particular Member State. Given the particular features of the gaming sector, the case-law accepts certain restrictions imposed by Member States, provided that such measures can be shown to be appropriate and proportionate, as well as non-discriminatory.
The Commission maintains that the Spanish legislation is discriminatory because the exemption is reserved for certain entities which that legislation defines precisely, and entities of other Member States, albeit of the same nature and in pursuit of the same objectives as the Spanish entities specified in the exemption rule, are excluded from the benefit of that exemption. Accordingly, even if the Spanish authorities had shown, in the course of the infringement proceedings, that the legislation at issue is a measure which is appropriate and proportionate to the stated objective of protecting consumers and public order - which they have failed to do - the legislation at issue could not in any circumstances be regarded as compatible with Community law, in so far as it is wholly discriminatory.
Case C-153/08
Parties
Applicant: Commission of the European Communities (represented by: R. Lyal and L. Lozano Palacios, acting as Agents)
Defendant: Kingdom of Spain
Form of order sought
The applicant claims that the Court should:
declare that, by maintaining in force fiscal legislation taxing winnings from all types of lotteries, games and betting organised outside the Kingdom of Spain, whereas winnings obtained from certain lotteries, games and betting organised within the Kingdom of Spain are exempted from income tax, the Kingdom of Spain has failed to fulfil its obligations under Community law and, in particular, under Article 49 EC and Article 36 of the Agreement on the European Economic Area;
order the Kingdom of Spain to pay the costs.
Pleas in law and main arguments
Under Spanish legislation, winnings from lotteries and betting organised by Loterías y Apuestas del Estado (the Spanish public-law body in charge of lotteries and betting) or by bodies or entities of the Comunidades Autónomas (Autonomous Communities), and winnings from lotteries organised by the Spanish Red Cross or the Organización Nacional de Ciegos Españoles (Spanish national association for the blind) are exempt from income tax. However, income from lotteries, games or betting organised by other national bodies or by foreign bodies, including those established in Member States of the European Union or the European Economic Area, is added to the taxable amount and subject to progressive rates of taxation.
Relying in particular on Lindman and Safir, the Commission points out that, according to that line of authority, the organising of lotteries is to be regarded as a "service" for the purposes of the Treaty. Also according to that case-law, Article 49 EC prohibits any restriction on the freedom to provide services, or any obstacle to that freedom - even where such a restriction or obstacle applies equally to national providers of services and to those of the other Member States - and precludes the application of any rule of national law the effect of which is to make it more difficult to provide services between Member States than to provide services wholly within a particular Member State. Given the particular features of the gaming sector, the case-law accepts certain restrictions imposed by Member States, provided that such measures can be shown to be appropriate and proportionate, as well as non-discriminatory.
The Commission maintains that the Spanish legislation is discriminatory because the exemption is reserved for certain entities which that legislation defines precisely, and entities of other Member States, albeit of the same nature and in pursuit of the same objectives as the Spanish entities specified in the exemption rule, are excluded from the benefit of that exemption. Accordingly, even if the Spanish authorities had shown, in the course of the infringement proceedings, that the legislation at issue is a measure which is appropriate and proportionate to the stated objective of protecting consumers and public order - which they have failed to do - the legislation at issue could not in any circumstances be regarded as compatible with Community law, in so far as it is wholly discriminatory.
New referral to the ECJ: Club Hotel Loutraki
Reference for a preliminary ruling from the Simvoulio tis Epikratias (Greece) lodged on 9 April 2008 - Club Hotel Loutraki AE, Athinaïki Tekhniki AE and Evangelos Marinakis v Ethniko Simvoulio Radiotileorasis and Ipourgos Epikratias
Case C-145/08
Referring court
Simvoulio tis Epikratias
Parties to the main proceedings
Claimants: Club Hotel Loutraki AE, Athinaïki Tekhniki AE and Evangelos Marinakis
Defendants: Ethniko Simvoulio Radiotileorasis and Ipourgos Epikratias
Questions referred
Does a contract by which the contracting authority entrusts to the contracting undertaking the management of a casino business and the execution of a development plan consisting in the upgrading of the casino premises and the commercial exploitation of the possibilities offered by the casino's licence, and which contains a term under which the contracting authority is obliged to pay the contracting undertaking compensation should another casino lawfully operate in the wider area in which the casino in question operates, constitute a concession, not governed by Directive 92/50/EEC?
If the first question referred for a preliminary ruling is answered in the negative: does a legal action which is brought by persons who have participated in the procedure for the award of a public contract of mixed form providing inter alia for the supply of services subject to Annex I B to Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209), and in which they plead breach of the principle of equal treatment of participants in tender procedures (a principle affirmed by Article 3(2) of that directive), fall within the field of application of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395), or is its application precluded inasmuch as, in accordance with Article 9 of Directive 92/50/EEC, only Articles 14 and 16 of the latter apply to the procedure for the award of the abovementioned contract for the supply of services?
If the second question referred for a preliminary ruling is answered in the affirmative: accepting that a national provision in accordance with which only all the members of a consortium without legal personality which has participated unsuccessfully in a public procurement procedure can bring a legal action against the act awarding the contract, and not consortium members individually, is not in principle contrary to Community law and specifically to Directive 89/665, and that that still applies where the legal action has initially been brought by all the members of the consortium jointly but ultimately proves, as regards some of them, to be inadmissible, is it in addition necessary, from the viewpoint of application of that directive, to examine, in order to make a declaration of inadmissibility, whether those individual members thereafter retain the right to claim before another national court any damages which may be envisaged by a provision of national law?
When it has been held by settled case-law of a national court that an individual member of a consortium may also bring an admissible legal action against an act falling within a public procurement procedure, is it compatible with Directive 89/665/EEC, interpreted in the light of Article 6 of the European Convention on Human Rights as a general principle of Community law, to dismiss a legal action as inadmissible, because of a change to that settled case-law, without the person who has brought that legal action first being given either the opportunity to cure the inadmissibility or, in any event, the opportunity to set out, pursuant to the adversarial principle, his views relating to that issue?
Case C-145/08
Referring court
Simvoulio tis Epikratias
Parties to the main proceedings
Claimants: Club Hotel Loutraki AE, Athinaïki Tekhniki AE and Evangelos Marinakis
Defendants: Ethniko Simvoulio Radiotileorasis and Ipourgos Epikratias
Questions referred
Does a contract by which the contracting authority entrusts to the contracting undertaking the management of a casino business and the execution of a development plan consisting in the upgrading of the casino premises and the commercial exploitation of the possibilities offered by the casino's licence, and which contains a term under which the contracting authority is obliged to pay the contracting undertaking compensation should another casino lawfully operate in the wider area in which the casino in question operates, constitute a concession, not governed by Directive 92/50/EEC?
If the first question referred for a preliminary ruling is answered in the negative: does a legal action which is brought by persons who have participated in the procedure for the award of a public contract of mixed form providing inter alia for the supply of services subject to Annex I B to Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209), and in which they plead breach of the principle of equal treatment of participants in tender procedures (a principle affirmed by Article 3(2) of that directive), fall within the field of application of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395), or is its application precluded inasmuch as, in accordance with Article 9 of Directive 92/50/EEC, only Articles 14 and 16 of the latter apply to the procedure for the award of the abovementioned contract for the supply of services?
If the second question referred for a preliminary ruling is answered in the affirmative: accepting that a national provision in accordance with which only all the members of a consortium without legal personality which has participated unsuccessfully in a public procurement procedure can bring a legal action against the act awarding the contract, and not consortium members individually, is not in principle contrary to Community law and specifically to Directive 89/665, and that that still applies where the legal action has initially been brought by all the members of the consortium jointly but ultimately proves, as regards some of them, to be inadmissible, is it in addition necessary, from the viewpoint of application of that directive, to examine, in order to make a declaration of inadmissibility, whether those individual members thereafter retain the right to claim before another national court any damages which may be envisaged by a provision of national law?
When it has been held by settled case-law of a national court that an individual member of a consortium may also bring an admissible legal action against an act falling within a public procurement procedure, is it compatible with Directive 89/665/EEC, interpreted in the light of Article 6 of the European Convention on Human Rights as a general principle of Community law, to dismiss a legal action as inadmissible, because of a change to that settled case-law, without the person who has brought that legal action first being given either the opportunity to cure the inadmissibility or, in any event, the opportunity to set out, pursuant to the adversarial principle, his views relating to that issue?
13 May 2008
Referral to the ECJ from the Administrative Court of Schleswig
Case C-46/08
Language of the case: German
Referring court
Schleswig-Holsteinisches Verwaltungsgericht
Parties to the main proceedings
Applicant: Carmen Media Group Ltd
Defendants: Land Schleswig-Holstein and Minister for the Interior for the Land Schleswig-Holstein
Questions referred
Is Article 49 EC to be interpreted as meaning that reliance on the freedom to provide services requires that a service provider be permitted, in accordance with the provisions of the Member State in which it is established, to provide that service there as well - in the present case, restriction of the Gibraltar gambling licence to 'offshore bookmaking'?
Is Article 49 EC to be interpreted as precluding a national monopoly on the operation of sports betting and lotteries (with more than a low potential risk of addiction), justified primarily on the grounds of combating the risk of gambling addiction, whereas other games of chance, with considerable potential risk of addiction, may be provided in that Member State by private service providers, and the different legal rules for sports betting and lotteries, on the one hand, and other games of chance, on the other, are based on the differing legislative powers of the Bund and the Länder?
If question (2) is answered in the affirmative:
Is Article 49 EC to be interpreted as precluding national rules which make entitlement to the grant of a licence to operate and arrange games of chance subject to the discretion of the competent licensing authority, even where the conditions for the grant of a licence as laid down in the legislation have been fulfilled?
Is Article 49 EC to be interpreted as precluding national rules prohibiting the operation and brokering of public games of chance on the internet, in particular where, at the same time, although only for a transitional period of one year, their online operation and brokering is permitted, subject to legislation protecting minors and players, for the purposes of the principle of proportionality and to enable two commercial gambling brokers who have previously operated exclusively online to switch over to those distribution channels permitted by the Staatsvertrag?
Language of the case: German
Referring court
Schleswig-Holsteinisches Verwaltungsgericht
Parties to the main proceedings
Applicant: Carmen Media Group Ltd
Defendants: Land Schleswig-Holstein and Minister for the Interior for the Land Schleswig-Holstein
Questions referred
Is Article 49 EC to be interpreted as meaning that reliance on the freedom to provide services requires that a service provider be permitted, in accordance with the provisions of the Member State in which it is established, to provide that service there as well - in the present case, restriction of the Gibraltar gambling licence to 'offshore bookmaking'?
Is Article 49 EC to be interpreted as precluding a national monopoly on the operation of sports betting and lotteries (with more than a low potential risk of addiction), justified primarily on the grounds of combating the risk of gambling addiction, whereas other games of chance, with considerable potential risk of addiction, may be provided in that Member State by private service providers, and the different legal rules for sports betting and lotteries, on the one hand, and other games of chance, on the other, are based on the differing legislative powers of the Bund and the Länder?
If question (2) is answered in the affirmative:
Is Article 49 EC to be interpreted as precluding national rules which make entitlement to the grant of a licence to operate and arrange games of chance subject to the discretion of the competent licensing authority, even where the conditions for the grant of a licence as laid down in the legislation have been fulfilled?
Is Article 49 EC to be interpreted as precluding national rules prohibiting the operation and brokering of public games of chance on the internet, in particular where, at the same time, although only for a transitional period of one year, their online operation and brokering is permitted, subject to legislation protecting minors and players, for the purposes of the principle of proportionality and to enable two commercial gambling brokers who have previously operated exclusively online to switch over to those distribution channels permitted by the Staatsvertrag?
04 May 2008
Online betting in tennis: French Tennis Federation sued for damages
Following claims by the FFT (Fédération Française de Tennis) that services offered by online sports betting operators present a danger to the ethics of sport, bwin, a member of the European Gaming and Betting Association (EGBA), is suing the French Tennis Federation for damages before a Paris court (Tribunal de grande instance).
Following claims by the FFT (Fédération Française de Tennis) that services offered by online sports betting operators present a danger to the ethics of sport, bwin, a member of the European Gaming and Betting Association (EGBA), is suing the French Tennis Federation for damages before a Paris court (Tribunal de grande instance).
The EGBA is keen to emphasise that the nature of the Internet means that it is an extremely efficient tool in providing operators with a perfect audit trail, one that can, where appropriate, be shared with regulators and other authorities in order to trace bets and hence provide valuable evidence in the fight against fraud in sports.
In contrast to the views of the FFT, any match-fixing would penalise bookmakers severely as they take financial risk when setting odds for all sporting events. As a result, any fraud which attempts to influence the outcome of an event would both distort the odds being offered and almost certainly deprive the the sports betting operator from generating any value from the event.
The EGBA works closely with the European Sports Security Association (ESSA)*. ESSA has set up an early warning system, in close cooperation with relevant sports authorities, such as the Association of Tennis Professionals (ATP), that is designed to combat fraud in connection with sporting events.
This early warning system that connects all ESSA members enables the early detection and analysis of irregular betting patterns. When an irregularity is confirmed, the relevant bets are suspended and the information is then passed on immediately to the relevant sports authorities, so that they can carry out the necessary investigations.
* ESSA, which groups the main online gaming and betting operators, works in partnership with numerous sports authorities such as the ATP (Association of Tennis Professionnals), the WTA (Women’s Tennis Association), the ITF (International Tennis Federation), FIFA (Fédération Internationale de Football Association), UEFA (Union of European Football Association) or l’EPFL (European Professional Football League). http://www.eu-ssa.org/
EGBA press release
Following claims by the FFT (Fédération Française de Tennis) that services offered by online sports betting operators present a danger to the ethics of sport, bwin, a member of the European Gaming and Betting Association (EGBA), is suing the French Tennis Federation for damages before a Paris court (Tribunal de grande instance).
The EGBA is keen to emphasise that the nature of the Internet means that it is an extremely efficient tool in providing operators with a perfect audit trail, one that can, where appropriate, be shared with regulators and other authorities in order to trace bets and hence provide valuable evidence in the fight against fraud in sports.
In contrast to the views of the FFT, any match-fixing would penalise bookmakers severely as they take financial risk when setting odds for all sporting events. As a result, any fraud which attempts to influence the outcome of an event would both distort the odds being offered and almost certainly deprive the the sports betting operator from generating any value from the event.
The EGBA works closely with the European Sports Security Association (ESSA)*. ESSA has set up an early warning system, in close cooperation with relevant sports authorities, such as the Association of Tennis Professionals (ATP), that is designed to combat fraud in connection with sporting events.
This early warning system that connects all ESSA members enables the early detection and analysis of irregular betting patterns. When an irregularity is confirmed, the relevant bets are suspended and the information is then passed on immediately to the relevant sports authorities, so that they can carry out the necessary investigations.
* ESSA, which groups the main online gaming and betting operators, works in partnership with numerous sports authorities such as the ATP (Association of Tennis Professionnals), the WTA (Women’s Tennis Association), the ITF (International Tennis Federation), FIFA (Fédération Internationale de Football Association), UEFA (Union of European Football Association) or l’EPFL (European Professional Football League). http://www.eu-ssa.org/
EGBA press release
FFT claim rejected: Belgians will be able to place online bets with EU operators on Roland Garros and Paris Masters 2008
In three rulings issued yesterday in cases brought forward by the French Tennis Federation (FFT) in Belgium against EU licensed operators including EGBA member bwin, the Liège first instance court rejected all allegations of the complainant.
The EGBA welcomes this ruling which confirms that the operators concerned do not violate the FFT’s rights as the event organizers of Roland Garros and Paris Masters. The Belgian players will therefore continue to enjoy this very popular entertainment in 2008.
The judge, taking into consideration the corporate responsibility of the EU operators concerned and the procedures in place “preventing all anonymous bets, ensuring perfect traceability” concluded that these operators had behaved in a prudent and diligent manner. Moreover, the judge took stock of “the various measures, notably for the protection of minors” implemented by bwin, as well as its membership of “ESSA (“European Sport Security Association”) which aims to guarantee the integrity of sports betting offers and to keep sports honest and free from fraud”.
The judge also considered that the “simple mention of the name of a sports event is a necessary indication for the online betting activity” which therefore “cannot be considered as an act of parasitism since its sole purpose is to let the player identify which sport event to place a bet on”.
The Belgian judge ordered the French Tennis Federation to pay € 5000 per case for the recovery of legal costs.
Sigrid Ligné, EGBA Secretary General commented: “EU-licensed bookmakers are professionals that have a high level of expertise, know-how and risk management skills. This has been clearly recognised by the Belgian judge looking at the fact-based evidence to dismiss all the claims in this case.”
EGBA press release
The EGBA welcomes this ruling which confirms that the operators concerned do not violate the FFT’s rights as the event organizers of Roland Garros and Paris Masters. The Belgian players will therefore continue to enjoy this very popular entertainment in 2008.
The judge, taking into consideration the corporate responsibility of the EU operators concerned and the procedures in place “preventing all anonymous bets, ensuring perfect traceability” concluded that these operators had behaved in a prudent and diligent manner. Moreover, the judge took stock of “the various measures, notably for the protection of minors” implemented by bwin, as well as its membership of “ESSA (“European Sport Security Association”) which aims to guarantee the integrity of sports betting offers and to keep sports honest and free from fraud”.
The judge also considered that the “simple mention of the name of a sports event is a necessary indication for the online betting activity” which therefore “cannot be considered as an act of parasitism since its sole purpose is to let the player identify which sport event to place a bet on”.
The Belgian judge ordered the French Tennis Federation to pay € 5000 per case for the recovery of legal costs.
Sigrid Ligné, EGBA Secretary General commented: “EU-licensed bookmakers are professionals that have a high level of expertise, know-how and risk management skills. This has been clearly recognised by the Belgian judge looking at the fact-based evidence to dismiss all the claims in this case.”
EGBA press release
European Court of Justice decides on casino monopoly
Referring court
Landesgericht Linz
Party to the main proceedings
Ernst Engelmann
Questions referred:
Is Article 43 EC (Treaty establishing the European Community, in the version of 2 October 1997, most recently amended by the Treaty of 25 April 2005 concerning the accession of the Republic of Bulgaria and Romania to the European Union (OJ 2005 L 157, p. 11)) to be interpreted as precluding a provision which provides that only public limited companies established in the territory of a particular Member State may there operate games of chance in casinos, thereby necessitating the establishment or acquisition of a company limited by shares in that Member State?
Are Articles 43 EC and 49 EC to be interpreted as precluding a national monopoly on certain types of gaming, such as games of chance in casinos, if there is no consistent and systematic policy whatsoever in the Member State concerned to limit gaming, inasmuch as national licensed organisers encourage participation in gaming - such as public sports betting and lotteries - and advertise such gaming (on television and in newspapers and magazines) in a manner which goes as far as offering a cash payment for a lottery ticket shortly before the lottery draw is made ('TOI TOI TOI - Believe in luck!')?
Are Articles 43 EC and 49 EC to be interpreted as precluding a provision under which all licences granting the right to operate games of chance and casinos are issued for a period of 15 years on the basis of a scheme under which Community competitors (not belonging to that Member State) are excluded from the tendering procedure?
Landesgericht Linz
Party to the main proceedings
Ernst Engelmann
Questions referred:
Is Article 43 EC (Treaty establishing the European Community, in the version of 2 October 1997, most recently amended by the Treaty of 25 April 2005 concerning the accession of the Republic of Bulgaria and Romania to the European Union (OJ 2005 L 157, p. 11)) to be interpreted as precluding a provision which provides that only public limited companies established in the territory of a particular Member State may there operate games of chance in casinos, thereby necessitating the establishment or acquisition of a company limited by shares in that Member State?
Are Articles 43 EC and 49 EC to be interpreted as precluding a national monopoly on certain types of gaming, such as games of chance in casinos, if there is no consistent and systematic policy whatsoever in the Member State concerned to limit gaming, inasmuch as national licensed organisers encourage participation in gaming - such as public sports betting and lotteries - and advertise such gaming (on television and in newspapers and magazines) in a manner which goes as far as offering a cash payment for a lottery ticket shortly before the lottery draw is made ('TOI TOI TOI - Believe in luck!')?
Are Articles 43 EC and 49 EC to be interpreted as precluding a provision under which all licences granting the right to operate games of chance and casinos are issued for a period of 15 years on the basis of a scheme under which Community competitors (not belonging to that Member State) are excluded from the tendering procedure?
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