Today, the European Court of Justice (ECJ) rendered two preliminary rulings (1) addressing key questions relating to the compliance of the Dutch legislation with the EU Treaty. The cases (C-203/08 and C-258/08) at stake originate in national proceedings involving Ladbrokes and Betfair, two companies, established in the UK.
Sigrid Ligné, Secretary General of the EGBA, said: “The Court has confirmed that if a Member State wants to prohibit or channel gambling through a single operator it has to comply with strict features that we consider are clearly not met in the context of the Dutch legislation. But it is now for the national judge to assess the consistency of the Dutch gambling policy and to make a final decision”.
She adds: “Internet raises new questions and challenges that cannot be resolved through the judicial process. It is for the European legislator to ensure that this IT-based medium which allows for the highest security standards warrants consistent customer protection and fraud control throughout the EU.”
As confirmed by the Internal Market Commissioner Barnier, there is momentum to take action at EU level in the context of a Green Paper (2) and - whenever necessary - through infringement procedures (3) against Member States that do not comply with EU law.
Sigrid Ligné concludes: “We are confident that reform of the gambling laws will take place in the Netherlands, as they already do throughout the EU. Beyond the legal considerations, you also have to look at the reality of the market. There is a consumer demand for online gaming in the Netherlands, like there is all over Europe. Increasingly, EU Member States like Italy, Denmark and France realize that online gaming is a popular leisure activity and are opening their market to competition. EGBA urges the Dutch authorities to also start regulating the market.”
In line with previous case law, the ECJ confirms that under certain strict circumstances a monopoly can be allowed to promote its offer for the purpose of fraud prevention. However, according to the ECJ:
• If the Netherlands is “pursuing a policy of substantially expanding betting and gaming, by excessively inciting and encouraging consumers to participate in such activities (…) it would have to be concluded that such a policy does not limit betting and gaming activities in a consistent and systematic manner and is not, therefore, suitable for achieving the objective of curbing consumer addiction to such activities” (Ladbrokes, case C-258/08, 28)
• "Since the objective of protecting consumers from gambling addiction is, in principle, difficult to reconcile with a policy of expanding games of chance characterised, inter alia, by the creation of new games and by the advertising of such games, such a policy cannot be regarded as being consistent unless the scale of unlawful activity is significant and the measures adopted are aimed at channeling consumers’ propensity to gamble into activities that are lawful” (Idem, point 30)
• In the context of that assessment, it is, specifically, for the national court to determine whether unlawful gaming activities may constitute a problem in the Netherlands and whether the expansion of authorised and regulated activities would be liable to solve such a problem (Idem, point 29).
When it comes to the national licensing schemes, the ECJ also confirms that:
• "Article 49 EC must be interpreted as meaning that the principles of equal treatment and the consequent obligation of transparency are applicable (…) in the field of games of chance” (Betfair case C-203/08, point 62)
• “If a prior administrative authorisation scheme is to be justified even though it derogates from a fundamental freedom, it must be based on objective, non-discriminatory criteria known in advance, in such a way as to circumscribe the exercise of the authorities’ discretion so that it is not used arbitrarily” (Betfair case C-203/08, point 50)
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Notes
(1) The preliminary ruling system (under Article 267 TFEU, ex-Article 234 of the EC Treaty) enables national courts to ensure uniform application of EU law in all the Member States. The ECJ has jurisdiction to give preliminary rulings on the interpretation of EU law in relation to specific legal questions raised by the national courts. In such rulings the Court makes every effort to give a reply which will be of assistance in resolving the dispute, but it is for the referring court to draw the appropriate conclusions from that reply in a final decision.
(2) A Green Paper released by the European Commission is a discussion document intended to stimulate debate and launch a process of consultation, at European level, on a particular topic. It may be followed by a White Paper, an official set of proposals for future EU legislation. A Green Paper on gambling is expected to be published by the European Commission in the autumn 2010.
(3) Infringement procedures brought by the European Commission (under Article 258 TFEU, ex-Article 226 of the EC Treaty) allow the ECJ to give a judgment with regard to the compliance of national legislations with EC law. Under such procedure the ECJ does not just give its interpretation of E law on specific selective questions but is able to have a broader analysis assessing as well the factual situation at stake. Seven Member States (Denmark, Finland, France, Sweden, Hungary, the Netherlands and Greece) are currently subject to an infringement procedure in relation to their gambling legislation and have already received a reasoned opinion, the last procedural step before the start of an infringement case at the ECJ.)
press release of EGBA
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