Reference for a preliminary ruling from the Bundesfinanzhof (Germany), lodged on 11 February 2009 - Leo-Libera GmbH v Finanzamt Buchholz in der Nordheide
(Case C-58/09)
Referring court
Bundesfinanzhof
Parties to the main proceedings
Claimant: Leo-Libera GmbH
Defendant: Finanzamt Buchholz in der Nordheide
Question referred
Is Article 135(1)(i) of Council Directive 2006/112/EC 1) of 28 November 2006 on the common system of value added tax to be interpreted as meaning that Member States are permitted to have a rule under which only specified forms of (race) betting and lotteries are exempt from tax, and all 'other forms of gambling' are excluded from the tax exemption?
____________
1 - OJ 2006 L 347, p. 1.
06 May 2009
30 April 2009
Federal Constitutional Court: Number-of-units taxation standard of the Hamburg Gaming Machines Tax Act incompatible with the principle of equality
Order of 4 February 2009 – 1 BvL 8/05 –
The judicial referral concerns the constitutional admissibility of the number of units as the standard for the taxation of coin slot machines pursuant to § 4.1 of the Hamburg Gaming Machines Tax Act (Hamburgisches Spielgerätesteuergesetz - SpStG), which was valid until 1 October 2005. Under this provision in its version relevant to the original proceedings, the tax rate is DM 600 per gaming machine and calendar month. Neither the amount brought in by the gaming machines nor the stakes made by the gamblers is taken into account when assessing the tax.
From January 1999 to February 2000, the complainant and plaintiff in the original proceedings operated two amusement arcades in which at first 18, later 16 coin slot machines were located. The plaintiff submitted respective gaming machine tax statements while at the same time lodging objections; the objections were denied by the Tax Office, the defendant in the original proceedings. The complainant brought action against this before the Hamburg Finance Court (Finanzgericht Hamburg). By its order of 26 April 2005, the Hamburg Finance Court stayed the proceedings and submitted to the Federal Constitutional Court the question as to whether § 4.1 of the Hamburg Gaming Machine Tax Act violates the general principle of equality.
The First Senate of the Federal Constitutional Court reached the conclusion that § 4.1 SpStG is incompatible with Article 3.1 of the Basic Law (Grundgesetz - GG), but not void. Taking the number of units as a standard of taxation results in an unequal burden on the gaming machine operators because it is structurally unsuitable to guarantee the necessary connection to the gamblers' amusement expenses. While the previous case-law of the Federal Constitutional Court and of the Federal Administrative Court (Bundesverwaltungsgericht) still regarded the number-of-units standard as a constitutionally valid and unobjectionable basis for the levying of the tax, this can no longer be justified according to the state-of-the art technical standards, as the Federal Administrative Court and the Federal Finance Court (Bundesfinanzhof) have meanwhile found. The Gaming Machine Tax Act can, however, continue to be applied for the assessment periods until 1 October 2005.
In essence, the decision is based on the following considerations:
The legislative competence of the Free and Hanseatic City of Hamburg for issuing the Gaming Machine Tax Act results from Article 105.2a GG. As a local tax on expenses, the Hamburg Gaming Machine Tax Act meets the requirements of this provision on competence; the choice of the taxation standard and the question of whether the tax may be shifted to the gamblers have no influence on the legislative competence.
The provision submitted, however, violates the general principle of equality (Article 3.1 GG) because taking the number of units as a standard has proven unsuited for levying the gaming machine tax, thereby placing an unequal burden on the gaming machine operators in an unjustifiable manner. It is, however, not the lack of the possibility of shifting the tax to the gamblers which makes the tax fail.
The point of reference of the entertainment tax in the shape of the gaming machine tax is the commercial organisation of gaming with slot machines. The organiser of the entertainment is the person liable to pay the tax. All the same, it is the individual gambler's entertainment expense on which the tax is levied because the entertainment tax is aimed at burdening the gambler's economic performance which is expressed by the use of his or her income for the entertainment. As the Federal Constitutional Court has already decided several times, this makes the individual, real entertainment expense the most appropriate standard for such a tax.
However, constitutional law does not restrict the legislature to applying such a standard, i.e. a standard which is oriented towards reality. When opening up a tax source that concerns the individual's entertainment expense, the legislature has a far-reaching freedom of drafting. This especially applies, inter alia, to the choice of the standard of taxation. Article 3.1 GG sets a limit to the legislature's freedom of drafting only where a plausible reason for equal treatment or unequal treatment is lacking, which would make it arbitrary.
If in entertainment tax law, the legislature, however, chooses a substitute standard or a probability-oriented standard instead of the reality-oriented one, it is restricted in its choice to a standard that makes a certain entertainment expense at least probable. The need of justification for choosing a substitute standard increases the more the further the standard which is chosen in the individual case is removed from the actual reason for the burden. The substitute standard of a gaming machine tax must have, at any rate, at least a loose connection to the gambler's entertainment expense because the substitute standard makes use of the legislative latitude with regard to the closeness of tax assessment to reality; this latitude, however, does not provide an exemption for the necessary orientation of the tax, as regards its content, towards the reason for the burden.
The standard provided in § 4.1 SpStG, which is based on the number of units, transgresses this latitude and thus leads to an unequal burdening of the gaming machine operators. According to the submitting court's findings, the standard has proven generally unsuitable in the territory of the Free and Hanseatic City of Hamburg because it is structurally unsuitable to guarantee the necessary connection to the gamblers' entertainment expense. There is no longer a valid justification for using the substitute standard nevertheless.
The application of the number-of-units standard according to § 4.1 SpStG leads to the equal treatment of facts that are essentially unequal. According to this standard, the tax on the operation of coin slot machines is the same, irrespective of the entertainment expense incurred by the users of the gaming machines at the different machines in the respective taxation period; the only difference that is made is the one between the operation of gaming machines in amusement arcades and in other locations. As regards the ranges of variation as regards the amounts brought in by the gaming machines that have been ascertained, they are so significant that there can no longer be any question of a sufficient connection, which is necessary for an entertainment tax, between the taxation standard and the taxable entertainment expense in the area of application of the Hamburg Gaming Machine Tax Act. With variations of several hundred per cent of the amounts brought in, variations which exist not only in individual cases but almost as a general rule, any correlation between the - mere - operation of slot machines and the gamblers' entertainment expense is lacking, irrespective of whether the expense is measured according to income brought in or according to the stake per game.
Earlier assumptions made by the Federal Constitutional Court to justify the suitedness of the number of units as a taxation standard for gaming machines (see Decisions of the Federal Constitutional Court (Entscheidungen des Bundesverfassungsgerichts - BVerfGE) 17, 476; 31, 8), which was followed by the older case-law of the administrative courts and finance courts, can no longer be upheld in view of the technical and economic development in this field and the concomitant possibilities of obtaining information. This particularly applies due to the fact that since 1 January 1997, only the operation of coin slot machines with a tamper-proof counter has been permissible, which has made it possible since that date to ascertain the gamblers' expense with sufficient reliability.
Apart from this, the unsuitability of the number of units as a standard for levying the gaming machine tax is not due to the special characteristics of the factual or legal situation in Hamburg but obviously has structural reasons with a view to the present situation on the gaming machine market. The number-of-units standard must
therefore deemed generally unsuitable for assessing the gaming machines tax because at best in more or less coincidental combinations of individual circumstances can it ensure the sufficient connection between tax assessment and the gambler's entertainment expense, which is required by the precept of the equality of tax burdens. In recent times, for instance, no positive evidence could be produced for the required connection to the figures compiled, which should at least be a loose one. Apart from this, the difficulties involved in producing the evidence of this content-related connection, and the insecurities as regards the existence of the connection - assuming that it could be established in the individual case - are so serious that neither the person liable to pay the tax nor the ultimate taxpayer can be reasonably expected to accept the use of such a standard; it is also not practicable for the tax administration.
Other factual reasons, in particular practicability, the assumption of an internal compensation of burdening among the gaming machine operators, the pursuit of steering objectives and the possible lack of a different, admissible method, cannot justify retaining the number of units as taxation standard in this factual situation.
It is also not apparent that a standard which is closer to reality were not available be because a standard that would be more strongly oriented towards the gamblers' expense would not be compatible with Community law.
Thus the unconstitutionality of the tax assessment challenged in the original proceedings follows from the inadmissibility of the number of units as taxation standard. However, it does not additionally result from the impossibility of shifting the tax towards the gamblers. If the tax is geared towards the tax burden being shifted from the person liable to pay the tax to the ultimate taxpayer, this is sufficient, even if the shift does not successfully take place in every individual case. No indications are apparent for a shift being factually impossible. By contrast, even under the application of § 4 Abs. 1 SpStG, the entrepreneurs retained the possibility of working towards an increase in turnover, for instance by choosing suitable locations for the amusement arcades, and by designing and equipping them accordingly, and by restricting their own cost to what is absolutely necessary in order to be able to earn not only what is needed for paying the tax, but also for making a profit.
The unconstitutionality of § 4.1 SpStG does not result in its nullity. What is established is only the incompatibility of the provision with Article 3.1 GG. The gaming machines tax can be levied according to the number-of-units standard set out in § 4.1 SpStG for a transitional period until the entry into force of the Gaming Entertainment Tax Act in Hamburg on 1 October 2005.
The judicial referral concerns the constitutional admissibility of the number of units as the standard for the taxation of coin slot machines pursuant to § 4.1 of the Hamburg Gaming Machines Tax Act (Hamburgisches Spielgerätesteuergesetz - SpStG), which was valid until 1 October 2005. Under this provision in its version relevant to the original proceedings, the tax rate is DM 600 per gaming machine and calendar month. Neither the amount brought in by the gaming machines nor the stakes made by the gamblers is taken into account when assessing the tax.
From January 1999 to February 2000, the complainant and plaintiff in the original proceedings operated two amusement arcades in which at first 18, later 16 coin slot machines were located. The plaintiff submitted respective gaming machine tax statements while at the same time lodging objections; the objections were denied by the Tax Office, the defendant in the original proceedings. The complainant brought action against this before the Hamburg Finance Court (Finanzgericht Hamburg). By its order of 26 April 2005, the Hamburg Finance Court stayed the proceedings and submitted to the Federal Constitutional Court the question as to whether § 4.1 of the Hamburg Gaming Machine Tax Act violates the general principle of equality.
The First Senate of the Federal Constitutional Court reached the conclusion that § 4.1 SpStG is incompatible with Article 3.1 of the Basic Law (Grundgesetz - GG), but not void. Taking the number of units as a standard of taxation results in an unequal burden on the gaming machine operators because it is structurally unsuitable to guarantee the necessary connection to the gamblers' amusement expenses. While the previous case-law of the Federal Constitutional Court and of the Federal Administrative Court (Bundesverwaltungsgericht) still regarded the number-of-units standard as a constitutionally valid and unobjectionable basis for the levying of the tax, this can no longer be justified according to the state-of-the art technical standards, as the Federal Administrative Court and the Federal Finance Court (Bundesfinanzhof) have meanwhile found. The Gaming Machine Tax Act can, however, continue to be applied for the assessment periods until 1 October 2005.
In essence, the decision is based on the following considerations:
The legislative competence of the Free and Hanseatic City of Hamburg for issuing the Gaming Machine Tax Act results from Article 105.2a GG. As a local tax on expenses, the Hamburg Gaming Machine Tax Act meets the requirements of this provision on competence; the choice of the taxation standard and the question of whether the tax may be shifted to the gamblers have no influence on the legislative competence.
The provision submitted, however, violates the general principle of equality (Article 3.1 GG) because taking the number of units as a standard has proven unsuited for levying the gaming machine tax, thereby placing an unequal burden on the gaming machine operators in an unjustifiable manner. It is, however, not the lack of the possibility of shifting the tax to the gamblers which makes the tax fail.
The point of reference of the entertainment tax in the shape of the gaming machine tax is the commercial organisation of gaming with slot machines. The organiser of the entertainment is the person liable to pay the tax. All the same, it is the individual gambler's entertainment expense on which the tax is levied because the entertainment tax is aimed at burdening the gambler's economic performance which is expressed by the use of his or her income for the entertainment. As the Federal Constitutional Court has already decided several times, this makes the individual, real entertainment expense the most appropriate standard for such a tax.
However, constitutional law does not restrict the legislature to applying such a standard, i.e. a standard which is oriented towards reality. When opening up a tax source that concerns the individual's entertainment expense, the legislature has a far-reaching freedom of drafting. This especially applies, inter alia, to the choice of the standard of taxation. Article 3.1 GG sets a limit to the legislature's freedom of drafting only where a plausible reason for equal treatment or unequal treatment is lacking, which would make it arbitrary.
If in entertainment tax law, the legislature, however, chooses a substitute standard or a probability-oriented standard instead of the reality-oriented one, it is restricted in its choice to a standard that makes a certain entertainment expense at least probable. The need of justification for choosing a substitute standard increases the more the further the standard which is chosen in the individual case is removed from the actual reason for the burden. The substitute standard of a gaming machine tax must have, at any rate, at least a loose connection to the gambler's entertainment expense because the substitute standard makes use of the legislative latitude with regard to the closeness of tax assessment to reality; this latitude, however, does not provide an exemption for the necessary orientation of the tax, as regards its content, towards the reason for the burden.
The standard provided in § 4.1 SpStG, which is based on the number of units, transgresses this latitude and thus leads to an unequal burdening of the gaming machine operators. According to the submitting court's findings, the standard has proven generally unsuitable in the territory of the Free and Hanseatic City of Hamburg because it is structurally unsuitable to guarantee the necessary connection to the gamblers' entertainment expense. There is no longer a valid justification for using the substitute standard nevertheless.
The application of the number-of-units standard according to § 4.1 SpStG leads to the equal treatment of facts that are essentially unequal. According to this standard, the tax on the operation of coin slot machines is the same, irrespective of the entertainment expense incurred by the users of the gaming machines at the different machines in the respective taxation period; the only difference that is made is the one between the operation of gaming machines in amusement arcades and in other locations. As regards the ranges of variation as regards the amounts brought in by the gaming machines that have been ascertained, they are so significant that there can no longer be any question of a sufficient connection, which is necessary for an entertainment tax, between the taxation standard and the taxable entertainment expense in the area of application of the Hamburg Gaming Machine Tax Act. With variations of several hundred per cent of the amounts brought in, variations which exist not only in individual cases but almost as a general rule, any correlation between the - mere - operation of slot machines and the gamblers' entertainment expense is lacking, irrespective of whether the expense is measured according to income brought in or according to the stake per game.
Earlier assumptions made by the Federal Constitutional Court to justify the suitedness of the number of units as a taxation standard for gaming machines (see Decisions of the Federal Constitutional Court (Entscheidungen des Bundesverfassungsgerichts - BVerfGE) 17, 476; 31, 8), which was followed by the older case-law of the administrative courts and finance courts, can no longer be upheld in view of the technical and economic development in this field and the concomitant possibilities of obtaining information. This particularly applies due to the fact that since 1 January 1997, only the operation of coin slot machines with a tamper-proof counter has been permissible, which has made it possible since that date to ascertain the gamblers' expense with sufficient reliability.
Apart from this, the unsuitability of the number of units as a standard for levying the gaming machine tax is not due to the special characteristics of the factual or legal situation in Hamburg but obviously has structural reasons with a view to the present situation on the gaming machine market. The number-of-units standard must
therefore deemed generally unsuitable for assessing the gaming machines tax because at best in more or less coincidental combinations of individual circumstances can it ensure the sufficient connection between tax assessment and the gambler's entertainment expense, which is required by the precept of the equality of tax burdens. In recent times, for instance, no positive evidence could be produced for the required connection to the figures compiled, which should at least be a loose one. Apart from this, the difficulties involved in producing the evidence of this content-related connection, and the insecurities as regards the existence of the connection - assuming that it could be established in the individual case - are so serious that neither the person liable to pay the tax nor the ultimate taxpayer can be reasonably expected to accept the use of such a standard; it is also not practicable for the tax administration.
Other factual reasons, in particular practicability, the assumption of an internal compensation of burdening among the gaming machine operators, the pursuit of steering objectives and the possible lack of a different, admissible method, cannot justify retaining the number of units as taxation standard in this factual situation.
It is also not apparent that a standard which is closer to reality were not available be because a standard that would be more strongly oriented towards the gamblers' expense would not be compatible with Community law.
Thus the unconstitutionality of the tax assessment challenged in the original proceedings follows from the inadmissibility of the number of units as taxation standard. However, it does not additionally result from the impossibility of shifting the tax towards the gamblers. If the tax is geared towards the tax burden being shifted from the person liable to pay the tax to the ultimate taxpayer, this is sufficient, even if the shift does not successfully take place in every individual case. No indications are apparent for a shift being factually impossible. By contrast, even under the application of § 4 Abs. 1 SpStG, the entrepreneurs retained the possibility of working towards an increase in turnover, for instance by choosing suitable locations for the amusement arcades, and by designing and equipping them accordingly, and by restricting their own cost to what is absolutely necessary in order to be able to earn not only what is needed for paying the tax, but also for making a profit.
The unconstitutionality of § 4.1 SpStG does not result in its nullity. What is established is only the incompatibility of the provision with Article 3.1 GG. The gaming machines tax can be levied according to the number-of-units standard set out in § 4.1 SpStG for a transitional period until the entry into force of the Gaming Entertainment Tax Act in Hamburg on 1 October 2005.
10 March 2009
European Parliament: No political support for an EU harmonised legislation for online gaming and betting
Press relesa of EGBA
Today’s adoption of an own initiative report by the European Parliament on “The integrity of online gambling” is overshadowed by the support of a wide range of Members of the European Parliament (MEPs) to an alternative report.
The alternative report was backed by MEPs representing at least 9 Member States and the three main European political parties. It seeks to approach online gaming and betting in a more practical way, in line with the cross-border nature of the sector and taking into consideration both the challenges and opportunities offered in this area by the Internet technology.
The European Gaming and Betting Association (EGBA) welcomes this alternative report, which reflects an important move within the European Parliament towards more workable solutions.
The confusing majority report lead by Danish socialist MEP Schaldemose, indeed calls on the Commission to “carry out studies and make appropriate proposals” while insisting at the same time on “the Member States right to regulate (the online gaming sector) in accordance with their traditions and cultures”. This report being split between a national or a community approach, therefore fails to make any clear recommendation on actions to be taken.
What is clear however is that no harmonised EU legislation is foreseeable in the near future due to lack of political will of both Member States and the European Parliament. This was first evidenced by the discussions within the Council initiated recently by the French Presidency and now by clear divisions amongst MEPs expressed in the context of the own initiative report.
So what’s next?
The establishment of a European Code of Conduct, supported by the alternative report, currently appears as the best practical option in the near future to ensure that EU licensed operators offering their services cross-border abide throughout the EU to a common and consistent set of responsible standards.
Sigrid Ligné, Secretary General of the EGBA said “Today’s vote shows that we cannot expect an EU harmonised legislation to be adopted in the near future. This clearly means that it is the rules of the Treaty and the case law of the Court of Justice that continue to apply and that will prevail for our sector in the years to come”.
The only tangible EU initiatives in the pipeline to enforce the right of EU operators to a non-discriminatory market access are the current infringements which were launchedby the Commission some years ago. These infringements need now urgently to be brought to the next level with all non-cooperative Member States including Germany, Sweden or Denmark.
Today’s adoption of an own initiative report by the European Parliament on “The integrity of online gambling” is overshadowed by the support of a wide range of Members of the European Parliament (MEPs) to an alternative report.
The alternative report was backed by MEPs representing at least 9 Member States and the three main European political parties. It seeks to approach online gaming and betting in a more practical way, in line with the cross-border nature of the sector and taking into consideration both the challenges and opportunities offered in this area by the Internet technology.
The European Gaming and Betting Association (EGBA) welcomes this alternative report, which reflects an important move within the European Parliament towards more workable solutions.
The confusing majority report lead by Danish socialist MEP Schaldemose, indeed calls on the Commission to “carry out studies and make appropriate proposals” while insisting at the same time on “the Member States right to regulate (the online gaming sector) in accordance with their traditions and cultures”. This report being split between a national or a community approach, therefore fails to make any clear recommendation on actions to be taken.
What is clear however is that no harmonised EU legislation is foreseeable in the near future due to lack of political will of both Member States and the European Parliament. This was first evidenced by the discussions within the Council initiated recently by the French Presidency and now by clear divisions amongst MEPs expressed in the context of the own initiative report.
So what’s next?
The establishment of a European Code of Conduct, supported by the alternative report, currently appears as the best practical option in the near future to ensure that EU licensed operators offering their services cross-border abide throughout the EU to a common and consistent set of responsible standards.
Sigrid Ligné, Secretary General of the EGBA said “Today’s vote shows that we cannot expect an EU harmonised legislation to be adopted in the near future. This clearly means that it is the rules of the Treaty and the case law of the Court of Justice that continue to apply and that will prevail for our sector in the years to come”.
The only tangible EU initiatives in the pipeline to enforce the right of EU operators to a non-discriminatory market access are the current infringements which were launchedby the Commission some years ago. These infringements need now urgently to be brought to the next level with all non-cooperative Member States including Germany, Sweden or Denmark.
06 March 2009
With the Acquisition of Expekt and Bet-at-home, French Group MANGAS GAMING Enters the Top 5 Online Sports Betting Players in Europe
press release of MANGAS GAMING
Paris - MANGAS GAMING, French leading group in online gaming and sports betting, which operates Betclic, active in France and Southern Europe, announces the two following transactions:
- The acquisition of all the operations of Expekt, a major
online sports betting company, addressing primarily the Scandinavian
and Northern European markets. Expekt is also a major player in online
poker.
- The acquisition of a controlling stake in Bet-at-home from
its founders. Bet-at-home, a Frankfort listed company, is an online
betting and gaming operator mainly present in Central and Eastern
Europe. A public offer will be launched shortly to acquire the shares
held by Bet-at-Home's minority shareholders.
Both transactions benefit from the full support of the management of the acquired companies.
With these acquisitions, MANGAS GAMING, enters the top 5 online sports betting operators in Europe, with gross gaming revenues amounting to around 200 million euros in 2009, over 4 million registered clients and a staff of about 500 people.
Present in more than 25 countries, the group now benefits from a balanced breakdown of its activities over continental Europe while maintaining a strong focus on local market expertise, and offers its services through websites in 24 different languages.
MANGAS GAMING, managed by Isabelle Parize, plans to pursue its pan-European development in a fast-growing industry.
Both transactions, which remain subject to customary regulatory approvals, will be financed through the existing resources of MANGAS GAMING, which is co-controlled by Financiere Lov, Stephane Courbit's patrimonial holding company, and Societe des Bains de Mer (SBM).
Lazard acted as exclusive financial adviser to MANGAS GAMING in these transactions.
Paris - MANGAS GAMING, French leading group in online gaming and sports betting, which operates Betclic, active in France and Southern Europe, announces the two following transactions:
- The acquisition of all the operations of Expekt, a major
online sports betting company, addressing primarily the Scandinavian
and Northern European markets. Expekt is also a major player in online
poker.
- The acquisition of a controlling stake in Bet-at-home from
its founders. Bet-at-home, a Frankfort listed company, is an online
betting and gaming operator mainly present in Central and Eastern
Europe. A public offer will be launched shortly to acquire the shares
held by Bet-at-Home's minority shareholders.
Both transactions benefit from the full support of the management of the acquired companies.
With these acquisitions, MANGAS GAMING, enters the top 5 online sports betting operators in Europe, with gross gaming revenues amounting to around 200 million euros in 2009, over 4 million registered clients and a staff of about 500 people.
Present in more than 25 countries, the group now benefits from a balanced breakdown of its activities over continental Europe while maintaining a strong focus on local market expertise, and offers its services through websites in 24 different languages.
MANGAS GAMING, managed by Isabelle Parize, plans to pursue its pan-European development in a fast-growing industry.
Both transactions, which remain subject to customary regulatory approvals, will be financed through the existing resources of MANGAS GAMING, which is co-controlled by Financiere Lov, Stephane Courbit's patrimonial holding company, and Societe des Bains de Mer (SBM).
Lazard acted as exclusive financial adviser to MANGAS GAMING in these transactions.
04 March 2009
Referral to ECJ with regard to the jurisdiction for claims against bookmakers
Reference for a preliminary ruling from the Cour d'appel de Liège (Belgium) lodged on 29 December 2008 - Real Madrid Football Club, Zinedine Zidane, David Beckham, Raul Gonzalez Blanco, Ronaldo Luiz Nazario de Lima, Luis Filipe Madeira Caeiro, Futebol Club Do Porto S.A.D., Victor Baia, Ricardo Costa, Diego Ribas da Cunha, P.S.V. N.V., Imari BV, Juventus Football Club SPA v Sporting Exchange Ltd, William Hill Credit Limited, Victor Chandler (International) Ltd, BWIN International Ltd (Betandwin), Ladbrokes Betting and Gaming Ltd, Ladbroke Belgium S.A., Internet Opportunity Entertainment Ltd, Global Entertainment Ltd (Unibet)
(Case C-584/08)
Language of the case: French
Referring court
Cour d'appel de Liège
Parties to the main proceedings
Appellants: Real Madrid Football Club, Zinedine Zidane, David Beckham, Raul Gonzalez Blanco, Ronaldo Luiz Nazario de Lima, Luis Filipe Madeira Caeiro, Futebol Club Do Porto S.A.D., Victor Baia, Ricardo Costa, Diego Ribas da Cunha, P.S.V. N.V., Imari BV, Juventus Football Club SPA
Respondents: Sporting Exchange Ltd, William Hill Credit Limited, Victor Chandler (International) Ltd, BWIN International Ltd (Betandwin), Ladbrokes Betting and Gaming Ltd, Ladbroke Belgium S.A., Internet Opportunity Entertainment Ltd, Global Entertainment Ltd (Unibet)
Questions referred
The questions relate to the interpretation to be given, in the specific field of the internet, to Article 5(3) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. 1
Where, as in the present case, the alleged harm is caused by websites and
(a) none of the companies being sued, which run the websites in question, has its company seat in Belgium,
(b) none of the websites in question is hosted in Belgium,
(c) none of the claimants is domiciled in Belgium,
(d) the betting websites are available to Belgian internet users, who can place their bets on those sites, to the same extent as they are available to internet users in other contracting States since they are '.com' websites which have the purpose of extending their market to the whole of Europe, and they do not have the extension '.be' which is specific to Belgium,
(e) those websites are available in a number of languages without the two most commonly used languages in Belgium always being among them,
(f) those websites offer, inter alia, bets on Belgian matches, in the same way as for foreign championships,
(g) the use of a particular technology or canvassing technique aimed at the Belgian public has not been proved,
(h) the number of bets placed by the Belgian public is entirely marginal in comparison with the total number of bets taken by those sites, since, according to the figures submitted by the bookmaking companies for 2005, which were not disputed, all the Belgian betting on football matches represents less than 0.25% of the bets taken on the websites 'bwin.com', 'willhill.com', 'betfair.com', 'ladbrokes.com', 'sportingbet', and 'miapuesta', while 'vcbet.com' refers to 40 Belgian bettors among all the bets placed with it,
1. should it be held that the alleged harm occurred or is liable to occur in Belgium, so that the Belgian courts have jurisdiction to hear the actions relating to that harm because the websites in question are directed, inter alia, at the Belgian public?
2. or should it be held that the alleged harm occurred or is liable to occur in Belgium, so that Belgian courts have jurisdiction to hear the actions relating to that harm, only if the existence of a sufficient, substantial or meaningful connection between the tortious events pleaded and Belgian territory is established?
3. if so, what are the relevant criteria to be taken into consideration in assessing whether such a connecting factor exists?
____________
1 - OJ 2001, L 12, p.1.
(Case C-584/08)
Language of the case: French
Referring court
Cour d'appel de Liège
Parties to the main proceedings
Appellants: Real Madrid Football Club, Zinedine Zidane, David Beckham, Raul Gonzalez Blanco, Ronaldo Luiz Nazario de Lima, Luis Filipe Madeira Caeiro, Futebol Club Do Porto S.A.D., Victor Baia, Ricardo Costa, Diego Ribas da Cunha, P.S.V. N.V., Imari BV, Juventus Football Club SPA
Respondents: Sporting Exchange Ltd, William Hill Credit Limited, Victor Chandler (International) Ltd, BWIN International Ltd (Betandwin), Ladbrokes Betting and Gaming Ltd, Ladbroke Belgium S.A., Internet Opportunity Entertainment Ltd, Global Entertainment Ltd (Unibet)
Questions referred
The questions relate to the interpretation to be given, in the specific field of the internet, to Article 5(3) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. 1
Where, as in the present case, the alleged harm is caused by websites and
(a) none of the companies being sued, which run the websites in question, has its company seat in Belgium,
(b) none of the websites in question is hosted in Belgium,
(c) none of the claimants is domiciled in Belgium,
(d) the betting websites are available to Belgian internet users, who can place their bets on those sites, to the same extent as they are available to internet users in other contracting States since they are '.com' websites which have the purpose of extending their market to the whole of Europe, and they do not have the extension '.be' which is specific to Belgium,
(e) those websites are available in a number of languages without the two most commonly used languages in Belgium always being among them,
(f) those websites offer, inter alia, bets on Belgian matches, in the same way as for foreign championships,
(g) the use of a particular technology or canvassing technique aimed at the Belgian public has not been proved,
(h) the number of bets placed by the Belgian public is entirely marginal in comparison with the total number of bets taken by those sites, since, according to the figures submitted by the bookmaking companies for 2005, which were not disputed, all the Belgian betting on football matches represents less than 0.25% of the bets taken on the websites 'bwin.com', 'willhill.com', 'betfair.com', 'ladbrokes.com', 'sportingbet', and 'miapuesta', while 'vcbet.com' refers to 40 Belgian bettors among all the bets placed with it,
1. should it be held that the alleged harm occurred or is liable to occur in Belgium, so that the Belgian courts have jurisdiction to hear the actions relating to that harm because the websites in question are directed, inter alia, at the Belgian public?
2. or should it be held that the alleged harm occurred or is liable to occur in Belgium, so that Belgian courts have jurisdiction to hear the actions relating to that harm, only if the existence of a sufficient, substantial or meaningful connection between the tortious events pleaded and Belgian territory is established?
3. if so, what are the relevant criteria to be taken into consideration in assessing whether such a connecting factor exists?
____________
1 - OJ 2001, L 12, p.1.
17 February 2009
EGBA: Online gaming and betting industry sends sports integrity message to the EU
Licensed online operators underline the traceability and transparency of the internet to safeguard the integrity of sports
At the EGBA’s ‘Responsible Gaming Day: Integrity & Sport’ event at the European Parliament today, key stakeholders called on the EU to make fact-based decisions when addressing the role of the Internet in sports integrity.
The event, in its second year at the European Parliament in Brussels, was attended by MEPs, the EU Czech Presidency, regulators, academics, representatives from the sporting world (UEFA, FIFA) and leading industry figures. Delegates discussed the role of the Internet as a tool to improve consumer protection and fraud prevention, with a particular focus on the field of sports betting integrity.
Norbert Teufelberger, Chairman of the European Gaming and Betting Association (EGBA) said: “Experts made it clear today how the Internet can be used for transparency, prevention and integrity purposes in the gaming and betting industry”.
With one of the morning sessions addressing the concerns around online problem gaming, Prof. Dr. Howard Shaffer from the Harvard Medical School, stressed: “The internet allows us now to scientifically study the actual gaming behaviour of players rather than rely on what they say or remember. The findings have shown us that the overwhelming majority of players gamble online in a very moderate and mild way”.
With the afternoon session focusing on the connection between integrity and sports, Norbert Teufelberger added: “The discussion today has shed more light on the various risk factors and respective responsibilities of the different stakeholders in the sport chain to maintain integrity”.
Christofer Fjellner, conservative MEP from Sweden, added: “Today’s experts showed that the Internet offers more possibilities rather than less in terms of preventing fraud and match fixing”.
All relevant sports stakeholders stressed in any case the need for greater cooperation and shared responsibility. This was echoed by Paul Scotney, Director Integrity Services and Licensing of the British Horseracing Authority “Keeping the sports clean can only work if there is meaningful cooperation between the sports sector, the regulators and the betting operators”.
Khalid Ali, Secretary General, European Sports Security Association (ESSA) then clarified how existing tools provided by the sports betting industry are helping sport federations maintain the highest standards of sporting integrity: “Our early warning alerts mean that we can work hand in hand with sports regulators and prevent the possibility of sport manipulation. The information provided to the sports federations is free of charge, with all the costs being borne by the online operators that are members of ESSA.”
You can find more details of the event on: www.ResponsibleGamingDay.eu
At the EGBA’s ‘Responsible Gaming Day: Integrity & Sport’ event at the European Parliament today, key stakeholders called on the EU to make fact-based decisions when addressing the role of the Internet in sports integrity.
The event, in its second year at the European Parliament in Brussels, was attended by MEPs, the EU Czech Presidency, regulators, academics, representatives from the sporting world (UEFA, FIFA) and leading industry figures. Delegates discussed the role of the Internet as a tool to improve consumer protection and fraud prevention, with a particular focus on the field of sports betting integrity.
Norbert Teufelberger, Chairman of the European Gaming and Betting Association (EGBA) said: “Experts made it clear today how the Internet can be used for transparency, prevention and integrity purposes in the gaming and betting industry”.
With one of the morning sessions addressing the concerns around online problem gaming, Prof. Dr. Howard Shaffer from the Harvard Medical School, stressed: “The internet allows us now to scientifically study the actual gaming behaviour of players rather than rely on what they say or remember. The findings have shown us that the overwhelming majority of players gamble online in a very moderate and mild way”.
With the afternoon session focusing on the connection between integrity and sports, Norbert Teufelberger added: “The discussion today has shed more light on the various risk factors and respective responsibilities of the different stakeholders in the sport chain to maintain integrity”.
Christofer Fjellner, conservative MEP from Sweden, added: “Today’s experts showed that the Internet offers more possibilities rather than less in terms of preventing fraud and match fixing”.
All relevant sports stakeholders stressed in any case the need for greater cooperation and shared responsibility. This was echoed by Paul Scotney, Director Integrity Services and Licensing of the British Horseracing Authority “Keeping the sports clean can only work if there is meaningful cooperation between the sports sector, the regulators and the betting operators”.
Khalid Ali, Secretary General, European Sports Security Association (ESSA) then clarified how existing tools provided by the sports betting industry are helping sport federations maintain the highest standards of sporting integrity: “Our early warning alerts mean that we can work hand in hand with sports regulators and prevent the possibility of sport manipulation. The information provided to the sports federations is free of charge, with all the costs being borne by the online operators that are members of ESSA.”
You can find more details of the event on: www.ResponsibleGamingDay.eu
16 February 2009
EGBA hosts second Responsible Gaming Day at the European Parliament
Expanded 2009 event to focus on Integrity & Sport
Following on from a highly successful inaugural event in 2008, the European Gaming and Betting Association (EGBA) is hosting a second ‘Responsible Gaming Day’ at the European Parliament in Brussels on Tuesday, 17 February. The event aims to facilitate a major EU policy discussion, with this year’s theme focusing on the key gaming issues of ‘Integrity and Sport’.
The ‘Responsible Gaming Day: ‘Integrity and Sport’ will be an opportunity for public and private sector stakeholders to examine the key issues of integrity in gaming, sport and bookmaking ethics and how to tackle potential fraud within the sports betting sector. The issue of integrity remains a top priority for private European online operators, who are committed to ensuring a highly secure gaming environment for their customers.
The ‘Responsible Gaming Day: Integrity & Sport’ will features keynote speeches by the Czech EU Presidency, Norbert Teufelberger, EGBA Chairman and Co-CEO of bwin, MEPs from Sweden, the UK, the Netherlands and Petter Nylander, CEO of Unibet. This year’s programme addresses the key issues around online gaming, ethics in sports bookmaking and the tools and safeguards available to tackle risk in sports betting. It will include prominent speakers from the European Commission, private and state-owned industry, academia and leading sporting associations and clubs.
“Our second Responsible Gaming Day comes at time when online gaming and related sporting issues are being debated at the highest levels of the EU” said Norbert Teufelberger, Chairman of the EGBA. “We aim to encourage all parties to enter into dialogue to ensure the best practice in the field of responsible gaming informs modern EU policy developments.”
You can find more details of the event on: www.ResponsibleGamingDay.eu
For further information or comment please contact:
Sigrid Ligné
+32 (0) 2 256 7527
egba@egba.eu
Following on from a highly successful inaugural event in 2008, the European Gaming and Betting Association (EGBA) is hosting a second ‘Responsible Gaming Day’ at the European Parliament in Brussels on Tuesday, 17 February. The event aims to facilitate a major EU policy discussion, with this year’s theme focusing on the key gaming issues of ‘Integrity and Sport’.
The ‘Responsible Gaming Day: ‘Integrity and Sport’ will be an opportunity for public and private sector stakeholders to examine the key issues of integrity in gaming, sport and bookmaking ethics and how to tackle potential fraud within the sports betting sector. The issue of integrity remains a top priority for private European online operators, who are committed to ensuring a highly secure gaming environment for their customers.
The ‘Responsible Gaming Day: Integrity & Sport’ will features keynote speeches by the Czech EU Presidency, Norbert Teufelberger, EGBA Chairman and Co-CEO of bwin, MEPs from Sweden, the UK, the Netherlands and Petter Nylander, CEO of Unibet. This year’s programme addresses the key issues around online gaming, ethics in sports bookmaking and the tools and safeguards available to tackle risk in sports betting. It will include prominent speakers from the European Commission, private and state-owned industry, academia and leading sporting associations and clubs.
“Our second Responsible Gaming Day comes at time when online gaming and related sporting issues are being debated at the highest levels of the EU” said Norbert Teufelberger, Chairman of the EGBA. “We aim to encourage all parties to enter into dialogue to ensure the best practice in the field of responsible gaming informs modern EU policy developments.”
You can find more details of the event on: www.ResponsibleGamingDay.eu
For further information or comment please contact:
Sigrid Ligné
+32 (0) 2 256 7527
egba@egba.eu
13 February 2009
Online gaming and betting: Proposed changes to Finnish lotteries act raise European Commission concerns even further
Brussels, 12 February 2009
The European Gaming and Betting Association (EGBA) welcomes the European Commission’s decision to issue formal Comments (1) against the proposed changes to the Finnish lotteries act. These changes, if implemented, would increase the extent of the breach of EU law that is already the subject of an EC infringement procedure.
The European Commission has already objected to the existing Finnish gaming legislation back in March 2007 when it issued a “Reasoned Opinion” the last procedural stage before a referral to the European Court of Justice.
The new draft provisions introduce even further restrictions on indirect marketing of gambling services for operators without a Finnish license, as well as fines and prison sentences of up to two years for both media and online gaming companies operating or marketing such activities. These additional restrictions are, however, not aimed at enhancing consumer protection in a consistent and systematic manner as they will not apply to the Finnish government’s own gambling activities which will still be allowed to conduct extensive and aggressive marketing campaigns. RAY (the Finnish Slot Machine Association) has even announced its intention to launch an internet poker site later this year.
According to Sigrid Ligné, EGBA Secretary General: “This shows all too clearly that the Finnish authorities have for the past two years - during which the Commission has been delaying Finland’s referral to the ECJ - enhanced their protectionist legislation rather than removed it”.
She concludes that: “The rights of EU licensed gaming and betting operators as well as those of Finnish newspapers and media have been ignored for too long and the situation is only deteriorating. The Commission’s patience has clearly not paid off. We now call on the Guardian of the Treaty to defend our rights and to bring Finland to the ECJ.”
The Finnish changes to the lotteries act were notified to Commissioner Verheugen’s services and Member States under Directive 98/34/EC in November 2008. The notification procedure is aimed at preventing Member States from creating new barriers to the internal market freedoms by giving the opportunity to the Commission and Member States to evaluate the content of a draft law before it is adopted.
(1) Comments issued by the European Commission in the context of the notification procedure mean that it considers that the text submitted raises issues or requires further details for clarified interpretation.
For further information on the Commission notification procedure, please see:
http://ec.europa.eu/enterprise/tris/pisa/app/search/index.cfm?fuseaction=pisa_notif_overview&iYear=2008&inum=492&sNLang=FR&lang=en
For further information or comment please contact:
Sigrid Ligné
+32 (0) 2 256 7527
egba@egba.eu
About EGBA:
The EGBA is an association of the leading European online gaming and betting operators Bet-at-home.com, bwin, Digibet, 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 € 85 Billion GGR in 2008 to € 93 Billion GGR in 2012, thus keeping the lion’s share with 88,1% of the market. Source: H2 Gambling Capital, January 2009.
www.egba.eu
www.responsiblegamingday.eu
The European Gaming and Betting Association (EGBA) welcomes the European Commission’s decision to issue formal Comments (1) against the proposed changes to the Finnish lotteries act. These changes, if implemented, would increase the extent of the breach of EU law that is already the subject of an EC infringement procedure.
The European Commission has already objected to the existing Finnish gaming legislation back in March 2007 when it issued a “Reasoned Opinion” the last procedural stage before a referral to the European Court of Justice.
The new draft provisions introduce even further restrictions on indirect marketing of gambling services for operators without a Finnish license, as well as fines and prison sentences of up to two years for both media and online gaming companies operating or marketing such activities. These additional restrictions are, however, not aimed at enhancing consumer protection in a consistent and systematic manner as they will not apply to the Finnish government’s own gambling activities which will still be allowed to conduct extensive and aggressive marketing campaigns. RAY (the Finnish Slot Machine Association) has even announced its intention to launch an internet poker site later this year.
According to Sigrid Ligné, EGBA Secretary General: “This shows all too clearly that the Finnish authorities have for the past two years - during which the Commission has been delaying Finland’s referral to the ECJ - enhanced their protectionist legislation rather than removed it”.
She concludes that: “The rights of EU licensed gaming and betting operators as well as those of Finnish newspapers and media have been ignored for too long and the situation is only deteriorating. The Commission’s patience has clearly not paid off. We now call on the Guardian of the Treaty to defend our rights and to bring Finland to the ECJ.”
The Finnish changes to the lotteries act were notified to Commissioner Verheugen’s services and Member States under Directive 98/34/EC in November 2008. The notification procedure is aimed at preventing Member States from creating new barriers to the internal market freedoms by giving the opportunity to the Commission and Member States to evaluate the content of a draft law before it is adopted.
(1) Comments issued by the European Commission in the context of the notification procedure mean that it considers that the text submitted raises issues or requires further details for clarified interpretation.
For further information on the Commission notification procedure, please see:
http://ec.europa.eu/enterprise/tris/pisa/app/search/index.cfm?fuseaction=pisa_notif_overview&iYear=2008&inum=492&sNLang=FR&lang=en
For further information or comment please contact:
Sigrid Ligné
+32 (0) 2 256 7527
egba@egba.eu
About EGBA:
The EGBA is an association of the leading European online gaming and betting operators Bet-at-home.com, bwin, Digibet, 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 € 85 Billion GGR in 2008 to € 93 Billion GGR in 2012, thus keeping the lion’s share with 88,1% of the market. Source: H2 Gambling Capital, January 2009.
www.egba.eu
www.responsiblegamingday.eu
06 February 2009
Court of Appeal of Versailles orders access to the Reasoned Opinion and the hearing of the Secretary General for European Affairs
Online Gaming and Betting/ Unibet-MrBookmaker case: The Court of Appeal of Versailles orders access to the Reasoned Opinion and the hearing of the Secretary General for European Affairs
The access to the Reasoned Opinion, previously refused by the instructing judge, has been requested by the defendants for months as a key piece of evidence. This confidential document lists all the violations of EU law that the European Commission holds against the French gambling legislation, in particular with regard to the Française de Jeux and PMUs monopolies on online sports and horse betting.
The Court of Appeal of Versailles today issued long awaited decisions in the criminal proceedings initiated in 2007 against Petter Nylander, CEO of the online gaming company Unibet, listed on the Stockholm Stock Exchange and holding licences in Italy, Malta and the UK, and Didier Dewyn, former CEO of Mr Bookmaker.
By deferring its judgement allowing the litigants to have access to the Reasoned Opinion addressed by the European Commission to France on June 27, 2007 (1) and seeking to hear for the first time in this case, a high civil servant, Gilles Briatta, Secretary General for European Affairs, the Court of Appeal reaffirms existing doubts regarding the compatibility of the French gaming legislation with European Law.
EGBA welcomes these decisions as an important development in the cases against Petter Nylander, Didier Dewyn and other European CEOs, who have been subject to arrests - including the use of an European Arrest Warrant – and indictments.
According to Sigrid Ligné, Secretary-General of EGBA, “These decisions raise once more the fundamental question of the legal base of these criminal proceedings. The infringements the European Commission listed in its Reasoned Opinion against the French Law shall also allow it to evaluate the compliance of the forthcoming draft bill with European law.”
The decisions follow the judgement of the Court of Appeal of Versailles dated January 18, 2008 in the proceedings engaged against Didier Dewyn, which requested additional information regarding the compliance of the French Law with EU Law and in particular access to the Reasoned Opinion addressed by the European Commission to France.
EGBA recalls that doubts regarding the French legislation’s compliance with European law have not only been voiced by the European Commission, but have also been confirmed by the Court of Cassation on July 10, 2007, by the State Council on May 9, 2008 and finally by the French Government itself in the context of the announced reform of the gambling law. To maintain an indictment based on the alleged infringement of such legislation would imply accepting the concept of preventive indictment, which is impossible under French law.
The EGBA recalls that these decisions come at a time when the European Commission has been waiting for 21 months for a new French bill which is expected to put an end to the multiple infringements of EU law and in particular to the “criminal sanctions [that] have been threatened or imposed on the chief executives of sport betting companies licensed in other Member States” (http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/909&format=HTML&aged=0&language=EN&guiLanguage=en). If the draft bill is not formally notified to the European Commission services in the shortest timeframe possible, the European Commission may move to the contentious stage of the infringement proceedings and refer the matter to the European Court of Justice.
press release of EGBA European Gaming & Betting Association
The access to the Reasoned Opinion, previously refused by the instructing judge, has been requested by the defendants for months as a key piece of evidence. This confidential document lists all the violations of EU law that the European Commission holds against the French gambling legislation, in particular with regard to the Française de Jeux and PMUs monopolies on online sports and horse betting.
The Court of Appeal of Versailles today issued long awaited decisions in the criminal proceedings initiated in 2007 against Petter Nylander, CEO of the online gaming company Unibet, listed on the Stockholm Stock Exchange and holding licences in Italy, Malta and the UK, and Didier Dewyn, former CEO of Mr Bookmaker.
By deferring its judgement allowing the litigants to have access to the Reasoned Opinion addressed by the European Commission to France on June 27, 2007 (1) and seeking to hear for the first time in this case, a high civil servant, Gilles Briatta, Secretary General for European Affairs, the Court of Appeal reaffirms existing doubts regarding the compatibility of the French gaming legislation with European Law.
EGBA welcomes these decisions as an important development in the cases against Petter Nylander, Didier Dewyn and other European CEOs, who have been subject to arrests - including the use of an European Arrest Warrant – and indictments.
According to Sigrid Ligné, Secretary-General of EGBA, “These decisions raise once more the fundamental question of the legal base of these criminal proceedings. The infringements the European Commission listed in its Reasoned Opinion against the French Law shall also allow it to evaluate the compliance of the forthcoming draft bill with European law.”
The decisions follow the judgement of the Court of Appeal of Versailles dated January 18, 2008 in the proceedings engaged against Didier Dewyn, which requested additional information regarding the compliance of the French Law with EU Law and in particular access to the Reasoned Opinion addressed by the European Commission to France.
EGBA recalls that doubts regarding the French legislation’s compliance with European law have not only been voiced by the European Commission, but have also been confirmed by the Court of Cassation on July 10, 2007, by the State Council on May 9, 2008 and finally by the French Government itself in the context of the announced reform of the gambling law. To maintain an indictment based on the alleged infringement of such legislation would imply accepting the concept of preventive indictment, which is impossible under French law.
The EGBA recalls that these decisions come at a time when the European Commission has been waiting for 21 months for a new French bill which is expected to put an end to the multiple infringements of EU law and in particular to the “criminal sanctions [that] have been threatened or imposed on the chief executives of sport betting companies licensed in other Member States” (http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/909&format=HTML&aged=0&language=EN&guiLanguage=en). If the draft bill is not formally notified to the European Commission services in the shortest timeframe possible, the European Commission may move to the contentious stage of the infringement proceedings and refer the matter to the European Court of Justice.
press release of EGBA European Gaming & Betting Association
23 December 2008
Gambling monopoly: question to the European Commission
ORAL QUESTION for Question Time at the part-session in December 2008 pursuant to Rule 109 of the Rules of Procedure by Karin Riis-Jørgensen to the Commission
Subject: Liberalisation of the national gambling monopoly
Between 6 and 8 November 2008 in Greece (Athens and Thessaloniki), two intermediaries from a private sports betting operator licensed and regulated in the EU were arrested and detained by the Greek authorities along with three customers for violating the Greek sports betting monopoly legislation.
That legislation is already the subject of a Reasoned Opinion sent by the European Commission on 28 February 2008 in the wider context of infringement proceedings launched against 10 Member States over the last two and a half years.
Given Paragraph 73 §4(1) of the Placanica ruling by the ECJ (C-338/04) does the Commission find such arrests disproportionate?
Why is the Commission not proceeding more rigorously and referring to the ECJ countries at Reasoned Opinion level like Greece or Denmark, Sweden, Finland, and the Netherlands, which have clearly, through actions like the ones above in Greece, or through complete inaction, showed that they refuse to comply with the EU Treaty?
____________________
(1) Articles 43 EC and 49 EC must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which imposes a criminal penalty on persons such as the defendants in the main proceedings for pursuing the organised activity of collecting bets without a licence or a police authorisation as required under the national legislation, where those persons were unable to obtain licences or authorisations because that Member State, in breach of Community law, refused to grant licences or authorisations to such persons.
Subject: Liberalisation of the national gambling monopoly
Between 6 and 8 November 2008 in Greece (Athens and Thessaloniki), two intermediaries from a private sports betting operator licensed and regulated in the EU were arrested and detained by the Greek authorities along with three customers for violating the Greek sports betting monopoly legislation.
That legislation is already the subject of a Reasoned Opinion sent by the European Commission on 28 February 2008 in the wider context of infringement proceedings launched against 10 Member States over the last two and a half years.
Given Paragraph 73 §4(1) of the Placanica ruling by the ECJ (C-338/04) does the Commission find such arrests disproportionate?
Why is the Commission not proceeding more rigorously and referring to the ECJ countries at Reasoned Opinion level like Greece or Denmark, Sweden, Finland, and the Netherlands, which have clearly, through actions like the ones above in Greece, or through complete inaction, showed that they refuse to comply with the EU Treaty?
____________________
(1) Articles 43 EC and 49 EC must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which imposes a criminal penalty on persons such as the defendants in the main proceedings for pursuing the organised activity of collecting bets without a licence or a police authorisation as required under the national legislation, where those persons were unable to obtain licences or authorisations because that Member State, in breach of Community law, refused to grant licences or authorisations to such persons.
18 December 2008
H2 Q3 eGambling Data Bulletin – Downturn to Strengthen eGaming's Hand
H2 have released their Q3 eGambling Data Bulletin based on all of the Q3 results and trading statements as well as our analysis of traffic and industry news flow until the end of November.
The covering paper concludes that:
- The eGambling Industry will be resilient but not immune to the global recession;
As some economies are in danger of collapsing during 2009 the fortunes of individual operators are difficult to call at this stage;
- eGambling is expected to strengthen its long term position as recession pushes more cash strapped governments to deregulate;
- For the first time H2 see more European Union Member States supporting eGambling rather than opposing it as debate moves to the level of taxation and establishment criteria;
- The US is now expected to move to legalise eGaming (excluding sportbetting) with federal legislation likely to permit states to opt in/out – However, legislation is not expected until the 112th Congress with no activity until 2013;
- In the meantime any effective implementation of UIGEA by December 2009 could impact the businesses of the operators that continue to accept US players.
See all of H2's 2009 forecasts on a market-by-market and product-by-product basis in the most detailed and authoritive assessment of the value and player volume of the interactive gambling industry. The summary industry dataset includes nearly 25,000 data points dating back to 1999 (with over 50 national by product splits from 2003) and forecasts out to 2012.
press release of H2
The covering paper concludes that:
- The eGambling Industry will be resilient but not immune to the global recession;
As some economies are in danger of collapsing during 2009 the fortunes of individual operators are difficult to call at this stage;
- eGambling is expected to strengthen its long term position as recession pushes more cash strapped governments to deregulate;
- For the first time H2 see more European Union Member States supporting eGambling rather than opposing it as debate moves to the level of taxation and establishment criteria;
- The US is now expected to move to legalise eGaming (excluding sportbetting) with federal legislation likely to permit states to opt in/out – However, legislation is not expected until the 112th Congress with no activity until 2013;
- In the meantime any effective implementation of UIGEA by December 2009 could impact the businesses of the operators that continue to accept US players.
See all of H2's 2009 forecasts on a market-by-market and product-by-product basis in the most detailed and authoritive assessment of the value and player volume of the interactive gambling industry. The summary industry dataset includes nearly 25,000 data points dating back to 1999 (with over 50 national by product splits from 2003) and forecasts out to 2012.
press release of H2
22 October 2008
Online betting and gaming: Opinion of the French Advocate General on the Portuguese gaming monopoly in the bwin Liga case
The European Gaming and Betting Association (EGBA) welcomes today’s opinion by the Advocate General in a betting case involving EGBA member bwin and Portuguese monopoly Santa Casa da Misericórdia (SCML) in the context of bwin’s sponsorship deal with the Portuguese professional football league.
Whereas the Gambelli and Placanica cases in 2003 and 2007 dealt with sports betting concessions in Italy, today’s conclusion by the Advocate General addresses the legitimacy of the Portuguese gambling monopoly. It is in line with the jurisprudence of Gambelli and Placanica and supports the arguments already put forward by bwin and EU licensed operators.
Answering a key question, the Advocate General stated that the extension of the monopoly to internet activities should have been notified to the European Commission and therefore will not be applicable against bwin and the Liga, and the national court must decline to apply it.
According to the French Advocate General Bot, the Portuguese monopoly on the internet may comply with Community law if certain conditions are met.
According to Sigrid Ligné, Secretary General of the EGBA: “Considering the facts in the present case, we strongly believe that those conditions are not met and that the Portuguese monopoly is not consistent with EU law”.
Former Advocate General Alber comments: “All conditions and controls can equally be fulfilled by EU licensed private operators”.
Indeed, a monopoly is not necessary to fight crime and to protect consumers as evidenced in multi-operator and regulated jurisdictions such as the United Kingdom, Malta or Austria.
Today’s opinion takes place in the context of an increasing number of requests for preliminary rulings (17 in total) to the ECJ by national courts and at a time when the Commission in parallel is to decide whether to refer a number of Member States to the ECJ over the compatibility of their gaming legislation with EC law.
This opinion is not binding on the ECJ and the EGBA expects the final ruling on the case in the beginning of 2009.
press release of EBGA, 14 October 2008
Whereas the Gambelli and Placanica cases in 2003 and 2007 dealt with sports betting concessions in Italy, today’s conclusion by the Advocate General addresses the legitimacy of the Portuguese gambling monopoly. It is in line with the jurisprudence of Gambelli and Placanica and supports the arguments already put forward by bwin and EU licensed operators.
Answering a key question, the Advocate General stated that the extension of the monopoly to internet activities should have been notified to the European Commission and therefore will not be applicable against bwin and the Liga, and the national court must decline to apply it.
According to the French Advocate General Bot, the Portuguese monopoly on the internet may comply with Community law if certain conditions are met.
According to Sigrid Ligné, Secretary General of the EGBA: “Considering the facts in the present case, we strongly believe that those conditions are not met and that the Portuguese monopoly is not consistent with EU law”.
Former Advocate General Alber comments: “All conditions and controls can equally be fulfilled by EU licensed private operators”.
Indeed, a monopoly is not necessary to fight crime and to protect consumers as evidenced in multi-operator and regulated jurisdictions such as the United Kingdom, Malta or Austria.
Today’s opinion takes place in the context of an increasing number of requests for preliminary rulings (17 in total) to the ECJ by national courts and at a time when the Commission in parallel is to decide whether to refer a number of Member States to the ECJ over the compatibility of their gaming legislation with EC law.
This opinion is not binding on the ECJ and the EGBA expects the final ruling on the case in the beginning of 2009.
press release of EBGA, 14 October 2008
23 September 2008
Portugal: Discriminatory taxation of gambling winnings?
European Commission Threatens to Refer Portugal to the ECJ
The European Commission has sent Portugal a formal request to amend its discriminatory rules that provide for the taxation of foreign lottery winnings, despite winnings from lotteries organised in Portugal being exempt from income tax.
According to the Portuguese rules, income earned in Portugal in the form of prizes or winnings from competitions, games or gambling is subject to taxation. However, an exemption applies to lottery winnings from Euromilhões e Liga dos Milhões, lotteries and games organised by the Portuguese monopoly Santa Casa da Misericórdia de Lisboa, which also carries out activities of social interest within the country.
The Commission considered that the exemption provided in the Portuguese legislation constituted a discrimination prohibited by the EC Treaty, as the favourable treatment is not open to other EU entities also carrying activities of social interest similar to Santa Casa da Misericórdia de Lisboa.
The Commission stated that taxing the winnings from foreign but not national lotteries cannot possibly be justified as a measure to avoid the damaging consequences of gambling.
The Commission therefore considers these rules to be contrary to the EC Treaty and the EEA Agreement, as they restrict the freedom to provide services. This request is in the form of a reasoned opinion, the second stage of the infringement procedure under Article 226 of the Treaty.
http://gamingintelligencegroup.com
The European Commission has sent Portugal a formal request to amend its discriminatory rules that provide for the taxation of foreign lottery winnings, despite winnings from lotteries organised in Portugal being exempt from income tax.
According to the Portuguese rules, income earned in Portugal in the form of prizes or winnings from competitions, games or gambling is subject to taxation. However, an exemption applies to lottery winnings from Euromilhões e Liga dos Milhões, lotteries and games organised by the Portuguese monopoly Santa Casa da Misericórdia de Lisboa, which also carries out activities of social interest within the country.
The Commission considered that the exemption provided in the Portuguese legislation constituted a discrimination prohibited by the EC Treaty, as the favourable treatment is not open to other EU entities also carrying activities of social interest similar to Santa Casa da Misericórdia de Lisboa.
The Commission stated that taxing the winnings from foreign but not national lotteries cannot possibly be justified as a measure to avoid the damaging consequences of gambling.
The Commission therefore considers these rules to be contrary to the EC Treaty and the EEA Agreement, as they restrict the freedom to provide services. This request is in the form of a reasoned opinion, the second stage of the infringement procedure under Article 226 of the Treaty.
http://gamingintelligencegroup.com
28 July 2008
French Council of State refers question of compatibility of a betting monopoly with Community law to the European Court of Justice
by attorney-at-law Martin Arendts, M.B.L.-HSG
In addition to the references of two Dutch supreme courts (cf. German Gaming Law updated, no. 106 and 107), the French Council of State (Conseil d’État), in its capacity as France’s supreme administrative court, has referred questions regarding the compatibility of a betting monopoly with Community law to the European Court of Justice (ECJ) for preliminary ruling (order of 9 May 2008, decision no. 287503).
The proceedings were initiated by the Malta based bookmaker ZETurf (Zeturf Limited), who sought revocation of a statutory instrument (decret no. 97-456 of 5 May 1997), which establishes a monopoly for the horse betting provider Pari Mutuel Urbain (PMU), founded in 1930, from the competent French Ministry of Agriculture. The bookmaker ZEturf, state licensed in Malta, an EU member state, argued that the betting monopoly was incompatible with Community law. As the Ministry of Agriculture showed no reaction, ZEturf filed action against this implicit refusal with the Conseil d’État on 25 November 2005.
ZEturf’s action has to be seen against the backdrop of the decision of the Tribunal de grande instance de Paris which, by decision of 8 July 2005, prohibited this bookmaker from accepting horse bets. This prohibition which was affirmed in the appeal, was repealed by a fundamental decision of the Court of Cassation (Cour de Cassation) of 10 July 2007, in particular reasoned on the basis of Community law.
The Council of State (Conseil d’État) has now decided to refer the question of compatibility of the French horse betting monopoly with Community law to the ECJ in accordance with Art. 234 EC Treaty. In this respect, the Conseil d’État asked the ECJ two questions. In essence, the Council of State inquires whether the freedom to provide services guaranteed in Art. 49 and 50 of the EC Treaty is to interpreted to the effect that it precludes a national legislation which establishes a monopoly regime in favour of a single provider, that is meant to combat crime and protect public order in a more efficient way than by less interfering action, if that regime is accompanied by a dynamic commercial policy on the part of the operator, so that a satisfactory reduction in gaming opportunities is not achieved. One aspect of this question is the necessity to be assessed as part of the proportionality test, that is the examination into alternatives to the monopoly legislation and the question as to less interfering action (considering the Rosengren decision, discussed at the oral hearing in the Case “Liga Portuguesa”- C-42/07). Another already critical point is the question whether a monopoly is legally tenable, where a monopoly undertaking, such as the economically very successfully acting operator PMU, does by no means limit gaming opportunities but seeks to increase its turnover instead. In addition to this, with his second question referred for preliminary ruling, the Conseil d’État asks whether, when assessing the justification of the impairment of the freedom to provide services, one had to take into consideration the online-offer alone or all forms of distribution.
In view of the now 16 pending proceedings for preliminary ruling relating to bets and games of chance (including three referred by national supreme courts) as well as numerous upcoming actions in infringement proceedings (after the first action against Spain for discriminatory taxation of winnings resulting from games of chance), one can now expect the ECJ to comprehensively clarify the legal questions raised.
* * *
Questions, referred to the ECJ by the Council of State:
1. Are Articles 49 and 50 of the Treaty establishing the European Community to be interpreted as precluding national legislation which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator where, although that system appears to fit the purpose of combating criminality and thus of protecting public order more effectively than would less restrictive measures, it is accompanied by a dynamic commercial policy on the part of the operator, in order to neutralise the risk of unauthorised gambling networks emerging and to channel bettors towards the lawful offer, that does not, in consequence, fully achieve the objective of reducing gambling opportunities?
2. Is it appropriate, in order to determine whether national legislation such as that in force in France, which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator, is contrary to Articles 49 and 50 of the Treaty establishing the European Community, to assess the impairment of freedom to provide services solely from the point of view of the restrictions placed on offering on-line horserace betting, or is it appropriate to take into consideration the entire horserace betting sector in whatever form it is offered and is accessible to bettors?
from: German Gaming Law updated No. 110
In addition to the references of two Dutch supreme courts (cf. German Gaming Law updated, no. 106 and 107), the French Council of State (Conseil d’État), in its capacity as France’s supreme administrative court, has referred questions regarding the compatibility of a betting monopoly with Community law to the European Court of Justice (ECJ) for preliminary ruling (order of 9 May 2008, decision no. 287503).
The proceedings were initiated by the Malta based bookmaker ZETurf (Zeturf Limited), who sought revocation of a statutory instrument (decret no. 97-456 of 5 May 1997), which establishes a monopoly for the horse betting provider Pari Mutuel Urbain (PMU), founded in 1930, from the competent French Ministry of Agriculture. The bookmaker ZEturf, state licensed in Malta, an EU member state, argued that the betting monopoly was incompatible with Community law. As the Ministry of Agriculture showed no reaction, ZEturf filed action against this implicit refusal with the Conseil d’État on 25 November 2005.
ZEturf’s action has to be seen against the backdrop of the decision of the Tribunal de grande instance de Paris which, by decision of 8 July 2005, prohibited this bookmaker from accepting horse bets. This prohibition which was affirmed in the appeal, was repealed by a fundamental decision of the Court of Cassation (Cour de Cassation) of 10 July 2007, in particular reasoned on the basis of Community law.
The Council of State (Conseil d’État) has now decided to refer the question of compatibility of the French horse betting monopoly with Community law to the ECJ in accordance with Art. 234 EC Treaty. In this respect, the Conseil d’État asked the ECJ two questions. In essence, the Council of State inquires whether the freedom to provide services guaranteed in Art. 49 and 50 of the EC Treaty is to interpreted to the effect that it precludes a national legislation which establishes a monopoly regime in favour of a single provider, that is meant to combat crime and protect public order in a more efficient way than by less interfering action, if that regime is accompanied by a dynamic commercial policy on the part of the operator, so that a satisfactory reduction in gaming opportunities is not achieved. One aspect of this question is the necessity to be assessed as part of the proportionality test, that is the examination into alternatives to the monopoly legislation and the question as to less interfering action (considering the Rosengren decision, discussed at the oral hearing in the Case “Liga Portuguesa”- C-42/07). Another already critical point is the question whether a monopoly is legally tenable, where a monopoly undertaking, such as the economically very successfully acting operator PMU, does by no means limit gaming opportunities but seeks to increase its turnover instead. In addition to this, with his second question referred for preliminary ruling, the Conseil d’État asks whether, when assessing the justification of the impairment of the freedom to provide services, one had to take into consideration the online-offer alone or all forms of distribution.
In view of the now 16 pending proceedings for preliminary ruling relating to bets and games of chance (including three referred by national supreme courts) as well as numerous upcoming actions in infringement proceedings (after the first action against Spain for discriminatory taxation of winnings resulting from games of chance), one can now expect the ECJ to comprehensively clarify the legal questions raised.
* * *
Questions, referred to the ECJ by the Council of State:
1. Are Articles 49 and 50 of the Treaty establishing the European Community to be interpreted as precluding national legislation which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator where, although that system appears to fit the purpose of combating criminality and thus of protecting public order more effectively than would less restrictive measures, it is accompanied by a dynamic commercial policy on the part of the operator, in order to neutralise the risk of unauthorised gambling networks emerging and to channel bettors towards the lawful offer, that does not, in consequence, fully achieve the objective of reducing gambling opportunities?
2. Is it appropriate, in order to determine whether national legislation such as that in force in France, which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator, is contrary to Articles 49 and 50 of the Treaty establishing the European Community, to assess the impairment of freedom to provide services solely from the point of view of the restrictions placed on offering on-line horserace betting, or is it appropriate to take into consideration the entire horserace betting sector in whatever form it is offered and is accessible to bettors?
from: German Gaming Law updated No. 110
Administrative Court of Berlin repeals prohibition order against a sports betting agent issued by the State of Berlin
Sports betting monopoly de facto terminated
by attorney-at-law Martin Arendts, M.B.L.-HSG
The Administrative Court of Berlin (Verwaltungsgericht Berlin) had already voiced fundamental doubts regarding the constitutionality of the Interstate Treaty on Gambling in several summary proceedings during the last months and has thus granted relief from judicial execution to the sports betting agents involved (cf. German Gaming Law updated No. 102). The Administrative Court of Berlin has now repealed a prohibition order issued by the State Office for Citizens’ and Police Affairs (Landesamt für Bürger- und Ordnungsangelegenheiten), holding it to be unlawful (decision of 7 July 2008, file no. VG 35 A 167.08). The claimant, represented by ARENDTS ANWÄLTE (www.gaminglaw.de), can thus continue to transfer sports bets to a bookmaker licensed in Malta, an EU member state.
This new decision involves a prohibition order of 6 March 2008 based on the Interstate Treaty on Gambling (Glücksspiel-Staatsvertrag) and the corresponding implementation act (Ausführungsgesetz zum Glücksspiel-Staatsvertrag - AG GlüStV). The detailed reasons are still due. However, as reported, the court had already voiced considerable doubts in the proceedings for relief from execution as to whether the new regulations could constitute a constitutional authority. The state sports betting monopoly, as a considerable interference with the private sports betting providers’ and agents’ right to choose their profession was not justifiable from a constitutional point of view.
The Administrative Court of Berlin explicitly allowed appeal against this decision which will have to be reviewed by the Administrative Court of Appeal of Berlin-Brandenburg (Oberverwaltungsgericht Berlin-Brandenburg). In view of the scope of the decision, which declares the Interstate Treaty on Gambling to be untenable and contrary to constitutional law, one has to assume that the State of Berlin will exhaust this legal remedy. For the time being, though, the state monopoly has de facto ended, since the market for sports betting in Berlin cannot be sealed off from bookmakers, licensed in other EU member states, anymore.
from: German Gaming Law updated No. 109
by attorney-at-law Martin Arendts, M.B.L.-HSG
The Administrative Court of Berlin (Verwaltungsgericht Berlin) had already voiced fundamental doubts regarding the constitutionality of the Interstate Treaty on Gambling in several summary proceedings during the last months and has thus granted relief from judicial execution to the sports betting agents involved (cf. German Gaming Law updated No. 102). The Administrative Court of Berlin has now repealed a prohibition order issued by the State Office for Citizens’ and Police Affairs (Landesamt für Bürger- und Ordnungsangelegenheiten), holding it to be unlawful (decision of 7 July 2008, file no. VG 35 A 167.08). The claimant, represented by ARENDTS ANWÄLTE (www.gaminglaw.de), can thus continue to transfer sports bets to a bookmaker licensed in Malta, an EU member state.
This new decision involves a prohibition order of 6 March 2008 based on the Interstate Treaty on Gambling (Glücksspiel-Staatsvertrag) and the corresponding implementation act (Ausführungsgesetz zum Glücksspiel-Staatsvertrag - AG GlüStV). The detailed reasons are still due. However, as reported, the court had already voiced considerable doubts in the proceedings for relief from execution as to whether the new regulations could constitute a constitutional authority. The state sports betting monopoly, as a considerable interference with the private sports betting providers’ and agents’ right to choose their profession was not justifiable from a constitutional point of view.
The Administrative Court of Berlin explicitly allowed appeal against this decision which will have to be reviewed by the Administrative Court of Appeal of Berlin-Brandenburg (Oberverwaltungsgericht Berlin-Brandenburg). In view of the scope of the decision, which declares the Interstate Treaty on Gambling to be untenable and contrary to constitutional law, one has to assume that the State of Berlin will exhaust this legal remedy. For the time being, though, the state monopoly has de facto ended, since the market for sports betting in Berlin cannot be sealed off from bookmakers, licensed in other EU member states, anymore.
from: German Gaming Law updated No. 109
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