Donnerstag, 27. Oktober 2011

Gambling: AG states that prevention of cross border gambling is against the Treaty

Brussels, 27 October 2011

Today Advocate General Cruz Villalón issued his opinion in the joined Costa and Cifone cases regarding the access of the British gambling operator Stanleybet to Italian licenses (Cases C-72/10 and C-77/10).

According to Stanleybet the procedure to award Italian licenses in fact protects operators that already had local licenses during a period in which the licensing procedure unlawfully excluded certain operators. AG Villalón confirms that licensing systems and procedures need to respect the requirements of the Treaty.

According to Villalón, who recalls the requirements for justifications of restrictions of the freedom to provide services such as in this case, in particular that legislation must be non-discriminatory, suitable and proportional (para 46 et seq),

• “National legislation which prevents any type of cross border gambling activity, irrespective of how this activity is exercised, ... , is contrary to articles 49 and 56 of the TFEU” (para 82)

• "National legislation that tends generally to protect holders of licences issued at an earlier period on the basis of a procedure that unlawfully excluded some operators can be regarded as an unjustified restriction of the freedom to provide services" (para 58). Maintaining the business position of such historical concession holders is contrary to the Treaty provisions.

• “Articles 49 and 56 of the TFEU oppose national legislation which guarantees the continuation of acquired commercial positions on the basis of a procedure which illegally excluded a number of operators” (para 69)
A date for the ruling of the European Court of Justice has not yet been set.

Maarten Haijer, Director of Regulatory Affairs at the EGBA states “We welcome the opinion of the Advocate General which confirms that Member States´ gambling legislation needs to comply with the basic requirements of the Treaty. It is the cornerstone of the Internal Market that a European licensed operator should have access to licenses in other Member States and be able to offer cross border services.”

Haijer adds: “With several preliminary questions pending in Italy alone, it is clear that we can´t continue to expect the CJEU to shape the European market. The European legislator needs to step in and introduce regulation that addresses and harmonizes licensing standards within the EU.”

Dienstag, 19. Juli 2011

Online gaming and betting: proposed new law in Germany criticised by the European Commission

Brussels, 19 July 2011

The European Commission today issued a ‘detailed opinion’ against the draft German State Gambling Treaty. This detailed opinion confirms that the Commission believes the proposed German State Treaty is in breach of EU law. If the draft is not substantially changed after this warning, Germany risks formal infringement proceedings, referral to the European Court of Justice (CJEU) and ultimately financial penalties.


The Commission has identified a number of provisions in the German draft State Gambling Treaty which are in conflict with the EU Treaty. While the draft law appears to open the market for online sports betting operators from all EU member states, it in practice reserves the market for the incumbent German monopolies. EGBA considers that several requirements in the draft State Treaty are in breach of EU law, including:

• The total number of sports betting licences available is limited without justification to seven (7), whereas the state monopoly for sports betting is exempt from the requirement to apply for a licence;
• An exorbitant tax of 16.67 percent of the amount wagered is imposed on all operators. This will make online wagering uneconomic, excluding online operators and is clearly intended to protect the current state monopoly on offline bets from online competition;
• The licensing system ‘bundles’ offline and online sports betting together and applies a commercial viability test to would-be operators, thus putting online-only operators at an automatic disadvantage in applying for a licence;
• While privately owned land-based premises are limited to 350 per license, no such restriction applies to outlets employed by the state-owned operators
• Certain casino games may be offered online but only by specified casino game operators that are already operating land-based casino games in Germany;
• An illegal expansion of marketing is encouraged for the state monopoly, but marketing restrictions are placed on other operators;
• The license fee will favour those applicants with land-based operations that attract higher margins and appears to be unrelated to the costs incurred to deliver and then maintain the license.

Sigrid Ligné, Secretary General of EGBA said today: ‘The draft German treaty has many provisions which are in conflict with EU law. But worse: it is clear that, taken together and especially including a prohibitive tax on wagers from which the incumbent state monopoly is exempt, these provisions effectively slam the door in the face of EU operators from other member states and will in fact extend the monopoly for offline to online games. The Commission must act quickly to stop this test case for its stated aim of a common EU framework for this sector ’.

The proposed German State Gambling Treaty comes after a number of preliminary rulings by the EU Court that the current State Treaty is incompatible with EU law (see inter alia Carmen Media, C- 46/08). The current law expires at the end of 2011 and the intention was to have the new treaty to come into force in January 2012.

In Germany the regions, or Länder, are competent for lotteries and sports betting while casinos and slot machines are the competence of the federal state. There is however no agreement between the Länder on this draft treaty on sports betting. Schleswig Holstein has already notified an alternative gambling law that will foster a commercially viable sports betting market for EU-licensed operators, thereby removing the attractions of the black market for consumers. The Commission raised no objections to such law and EGBA remains fully supportive of the efforts to enact it.

According to a study by Gold Media, the gross online gaming and betting revenue in Germany was €1 billion in 2009, with a 30 percent annual growth rate (1). Online gaming is a large and vibrant segment of the digital economy in Germany. Whilst material, failing to comply with EU law is only one of the major issues with the proposed State Gambling Treaty. The draft Treaty, if enacted as proposed will simply drive consumers into the hands of black market operators that will not deliver the same levels of consumer protection, that will reduce visibility of the online gaming and betting market in Germany and will forego the opportunity to raise tax revenue.

(1) http://www.goldmedia.com/en/press/newsroom/
study-betting-and-gambling-in-germany.html

For further information or comment please contact:
Sigrid Ligné: +32 2 554 08 90
Sigrid.Ligne@egba.eu

About EGBA
The EGBA is an association of leading European gaming and betting operators Bet-at-home.com, BetClic, bwinparty, Digibet, Expekt, Interwetten, and Unibet. EGBA is a Brussels-based non-profit 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 limited part of the overall European gaming market in which the traditional land based offer is expected to grow from € 79.6 Billion GGR in 2009 to € 83 Billion GGR in 2012, thus keeping the lion’s share with 87% of the market. Source: H2 Gambling Capital, April 2010

The Notification Procedure

Under Directive 98/34/EC, Member States must notify to the European Commission and other Member States draft regulations regarding products and Information Society services such as online gaming and betting, before adopting them. This 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.

The notification of a text to the Commission opens a three month standstill period during which the draft text must not be adopted. This period allows the Commission and Member States to ascertain whether the draft text presents any unjustified barriers to the internal market. The Commission and/or Member States may then issue:
• a detailed opinion, if they consider that the draft text would, if implemented, create barriers to trade, services or establishment within the EU;
• comments, if they consider that the text raises issues of interpretation or requires further details; or
• no response, if they consider that the text is compatible with EU law.
A detailed opinion attempts to prevent Members States from adopting a text, which contains barriers to the internal market, or to urge them to remove the restrictive provisions, thereby avoiding unnecessary legislative work and future EU infringement proceedings.

Once a detailed opinion had been issued, the standstill period, during which the draft text must not be adopted, is extended by one month. If, after this time, the draft text is adopted without modification, the Commission can immediately commence an infringement procedure against the Member State’s newly adopted legislation.

To access the TRIS database and search for other draft laws see:
http://ec.europa.eu/enterprise/tris/pisa/app/search/index.cfm?lang=EN

Donnerstag, 30. Juni 2011

EGBA: CJEU questions consistency of French gambling law

Brussels, 30 June 2011

The European Court today ruled once again that a monopoly can only be justified if findings prove that gambling related problems actually exist and a particularly high level of consumer protection is granted. This ruling, which concerns the former law, also adds pressure on the current French gambling legislation that was introduced in May 2010.

The European Gaming and Betting Association (EGBA) welcomes today’s ruling by the Court of Justice of the European Union (CJEU) stating once again that an EU Member State is not permitted to close its gambling market on public policy grounds while, at the same time, allowing its own monopoly operator to employ aggressive marketing encouraging consumers to play substantially more without evidencing that such marketing can effectively solve gambling related problems (Zeturf case C-212/08, para 70).

Since the French legislator has not considered it necessary to make a distinction between land-based and online distribution channels at the time of the referral, the national courts must assess the consistent and systematic approach of the French legislation as regards the entire horserace betting sector both online and offline.

In particular the CJEU insists that the French jurisdiction verifies whether:
• “the national authorities genuinely sought, at the material time, to ensure such a particularly high level of protection and whether, having regard to the level of protection sought, the establishment of a monopoly could actually be considered necessary” (para.47),
• “the State controls to which the activities of the body benefiting from the exclusive rights are, in principle, subject are actually implemented in the consistent and systematic pursuit of the objectives assigned to that body” (para.72);
• The monopoly is “based on a finding that criminal and fraudulent activities linked to gaming and gambling addiction are a problem in the territory of the Member State concerned, which the expansion of authorised and regulated activities would be capable of solving“(para.72);
• “only advertising that is measured and strictly limited to what is necessary in order to channel consumers towards controlled gaming networks” (para.71) is allowed, already having established that “the PMU makes use of sustained and growing advertising for its products, including on the internet, and is increasing the number of outlets for betting and for the products offered to bettors. It uses, moreover, a commercial strategy that seeks to draw in new audiences for the betting offered” (para.65). (1)

Sigrid Ligné, Secretary General of the EGBA said: ´Today´s ruling confirms that Member States have to choose between either a monopoly with policies which are genuinely designed to reduce gambling opportunities or a well regulated market where also EU operators can provide their services. It is a clear question of consistency.´

The Zeturf case concerns French legislation which has changed since the case was referred by the French Conseil d’Etat – the highest administrative Court – to the CJEU and thus no longer applies, but civil and criminal proceedings are nevertheless still being pursued against the Zeturf Limited, an EU licensed and regulated company providing online gambling services. Now that the CJEU has given clear indications that the former law is not in compliance with EU law, these proceedings are likely to be dropped after an assessment by the national court.

Several complaints against the new French law of May 2010, partially regulating the online gambling market, are still pending both in France and at the European Commission. Separately, the Commission has already opened a State aid investigation against the French parafiscal levy on online horse-race betting, the decision on which is expected in the second half of 2011 (State aid case C 34/10).

Footnote:
(1) Underscore added

For further information or comment please contact:
Sigrid Ligné: +32 2 554 08 99
Sigrid.Ligne@egba.eu

Donnerstag, 24. März 2011

EGBA concerned at EC Green Paper on online gambling

Brussels, 24 March 2011

The European Gaming and Betting Association (EGBA) welcomes today’s publication of the Green Paper on online gambling that will allow for a factual discussion at EU level. At the same time, the EGBA expresses its concern with the apparent lack of commitment to curb further fragmentation of the common market and ensure that consumers throughout the EU enjoy consistent standards of regulated, safe and high-quality products.

Without clear EU framework rules, the European online gambling market, estimated at € 9.08 billion in 2011 (1), risks being driven underground into the hands of black market operators to the detriment of consumers, legitimate EU licensed operators and State finances.

Secretary General of EGBA Sigrid Ligné said: “We welcome the Commission coming forward with a Green Paper and a factual discussion on all aspects of online gambling. We are deeply concerned though that the focus of the paper seems to be on a national rather than an EU approach despite the clear cross-border nature of this sector. What we expect is the Commission to propose an EU regulatory framework for online gambling, as it has done for other inherently highly regulated sectors such as telecoms or pharmaceuticals. In parallel, the Commission in its role as guardian of the Treaty should vigorously and systematically pursue infringement proceedings against those Member States that continue to violate EU law.”

The EGBA’s main comments on the Green Paper are the following:

• The Commission rightly devotes much attention to the questions of consumer protection and prevention of fraud. Indeed as confirmed by the Commission, the Internet offers unique opportunities ‘as it provides the operators with more sophisticated possibilities to track the transactions of each player compared to off-line gambling formats’. Valuable initiatives have been developed in these areas, most recently by the European standards body CEN, which issued a workshop agreement on ‘Responsible Remote Gambling Measures’ on 24 February, setting out a list of 134 concrete measures that ensure responsible gambling and provide greater protection for consumers throughout the EU.

• Unfortunately the Commission is silent on the need for hard EU rules to combat the increasing fragmentation of the Internal Market through uncoordinated national prohibitions and restrictions. Yet, as the Commission itself admits: ‘The development of internet and the increased supply of online gambling services have made it more difficult for the different national regulatory models to co-exist.’

• The cost of this fragmentation and duplication of national requirements is particularly high. A study conducted in 2010 by Price Waterhouse Coopers shows that, for France alone, the administrative and technical costs for obtaining and maintaining the national licence to operate on the French market are € 8.7 million for a single EU operator, already licensed in one or several other Member States. National licensing regimes imposing such burdens on the service providers only benefit non-EU licensed black market operators to the detriment of player protection.

• Go-it-alone national rule-making risks being at odds with the jurisprudence of the CJEU, which sets clear limits to restrictions that can be imposed on legitimate EU operators, and may infringe competition rules. Between 2006 and 2010, over 150 national draft acts and laws have been notified to the Commission for single market screening, and many have received a formal warning from the Commission for not complying with EU law. Infringement cases have been commenced against several national laws put in force despite the Commission’s early warning. However, since early 2008 no developments have taken place in the pending infringement cases and no new infringement proceedings have been opened.

Sigrid Ligné concluded: ´The launch of this Green Paper should under no circumstances cause the Commission to freeze pending or avoid opening new infringement cases against national regulations that are in violation of the Treaty.´

---------------------------------------------------------
(1) H2 Gambling Capital March 2011 (EU 27)

For further information or comment please contact:
Sigrid Ligné: +32 2 554 08 90
Sigrid.Ligne@egba.eu

About EGBA
The European Gaming and Betting Association is an association of leading European gaming and betting operators Bet-at-home.com, BetClic, bwin, Digibet, Expekt, Interwetten, PartyGaming and Unibet. EGBA is a Brussels-based non-profit 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 limited part of the overall European gaming market in which the traditional land based offer is expected to grow from € 79.6 Billion GGR in 2009 to € 83.7 Billion GGR in 2012, thus keeping the lion’s share with 87% of the market. Source: H2 Gambling Capital, April 2010.

Dienstag, 1. Februar 2011

Principality of Liechtenstein: Call for Tenders for a Casino License

by Attorney-at-Law Martin Arendts, M.B.L.-HSG

The new Gambling Act (Geldspielgesetz - GSG) and the Casino Ordinance (Spielbankenverordnung - SPBV) of the Principality of Liechtenstein allow the operation of a casino. Today, the government authorised the call for tenders. Until an evaluation report will be published, only one license will be granted. Applications for the license have to be filed by 31 March 2011, 4:30 p.m. tender documents can be requested from Amt für Volkswirtschaft for a fee of SFR 2.000,-.