Ince case: New referral to the CJEU from Germany

Reference for a preliminary ruling from the Amtsgericht Sonthofen (Germany) lodged on 11 July 2014 — Criminal proceedings against Sebat Ince

(Case C-336/14)

 

Language of the case: German

 

Referring court

Amtsgericht Sonthofen

 

Party/parties to the main proceedings

Sebat Ince

Other party: Staatsanwaltschaft Kempten

 

Questions referred

 

I.    On the first charge (January 2012) and the second charge in so far as it relates to the period up to the end of June 2012:

 

 

1(a)    Must Article 56 TFEU be interpreted as meaning that criminal prosecution authorities are prohibited from penalising the intermediation of bets on sporting competitions carried on without German authorisation on behalf of betting organisers licensed in other Member States, where such intermediation is subject to the condition that the betting organiser too must hold a German authorisation, but the legal position under statute that is contrary to EU law (‘monopoly on sports betting’) prohibits the national authorities from issuing an authorisation to non-State-owned betting organisers?

 

1(b)    Is the answer to question 1(a) altered by the fact that, in one of the 15 German Länder which jointly established and jointly implement the State monopoly on sports betting, the State authorities maintain, in prohibition or criminal proceedings, that the statutory prohibition on the issue of an authorisation to private suppliers is not applied in the event of an application for an authorisation to operate as an organiser or intermediary in that federal Land?

 

1(c)    Must the principles of EU law, in particular the freedom to provide services, and the judgment of the Court of Justice in Case C-186/11 be interpreted as precluding a permanent prohibition or an imposition of penalties (described as ‘precautionary’) on the cross-border intermediation of bets on sporting competitions, where this is justified on the ground that it ‘was not obvious, that is to say recognisable without further examination’ to the prohibiting authority at the time of its decision that the intermediation activity fulfils all the substantive conditions of authorisation (apart from the reservation of such activities to a State monopoly)?

 

2    Must Directive 98/34/EC ¹ be interpreted as precluding the imposition of penalties for the intermediation of bets on sporting competitions via a gaming machine, without a German authorisation, on behalf of a betting organiser licensed in another EU Member State, where the interventions by the State are based on a law, not notified to the European Commission, which was adopted by an individual Land and has as its content the expired Staatsvertrag zum Glücksspielwesen (State Treaty on Gaming) (‘the GlüStV’)?

 

II.    The second charge in so far as it relates to the period from July 2012

3    Must Article 56 TFEU, the requirement of transparency, the principle of equality and the EU-law prohibition of preferential treatment be interpreted as precluding the imposition of penalties for the intermediation of bets on sporting competitions, without a German authorisation, on behalf of a betting organiser licensed in another EU Member State in a situation characterised by the Glücksspieländerungsstaatsvertrag (State Treaty amending the provisions on games of chance) (‘the GlüÄndStV’), applicable for a period of nine years and containing an ‘experimental clause for bets on sporting competitions’, which, for a period of seven years, provides for the theoretical possibility of awarding also to non-State-owned betting organisers a maximum of 20 licences, legally effective in all German Länder, as a necessary condition of authorisation to operate as an intermediary, where:

 

(a)    the licensing procedure and disputes raised in that connection are managed by the licensing authority in conjunction with the law firm which has regularly advised most of the Länder and their lottery undertakings on matters relating to the monopoly on sports betting that is contrary to EU law and represented them before the national courts in proceedings against private betting suppliers, and was entrusted with the task of representing the State authorities in the preliminary ruling proceedings in Markus Stoß [and Others, ,,,, and, EU:C:2010:504], Carmen Media [Group,, EU:C:2010:505] and Winner Wetten [, EU:C:2010:503];

 

(b)    the call for tenders for licences published in the Official Journal of the European Union on 8 August 2012 gave no details of the minimum requirements applicable to the proposals to be submitted, the content of the other declarations and evidence required or the selection of the maximum of 20 licensees, such details not having been communicated until after the expiry of the deadline for submission of tenders, in a so-called ‘information memorandum’ and numerous other documents, and only to tenderers who had qualified for the ‘second stage’ of the licensing procedure;

 

(c)    eight months after the start of the procedure, the licensing authority, contrary to the call for tenders, invites only 14 tenderers to present their social responsibility and safety policies in person, because these have fulfilled all of the minimum conditions for a licence, but, 15 months after the start of the procedure, announces that not one of the tenderers has provided ‘verifiable’ evidence that it fulfilled the minimum conditions;

 

(d)    the State-controlled tenderer ‘Ods’ (Ods Deutschland Sportwetten GmbH), consisting of a consortium of State-owned lottery companies, is one of the 14 tenderers invited to present their proposals to the licensing authority but, because of its organisational links to organisers of sporting events, is probably not eligible for a licence because the law (Paragraph 21(3) of the GlüÄndStV) requires a strict separation of active sport and the bodies organising it from the organisation and intermediation of bets on sporting competitions;

 

(e)    one of the requirements for a licence is to demonstrate ‘the lawful origin of the resources necessary to organise the intended offer of sports betting facilities’;

 

(f)    the licensing authority and the gaming board that decides on the award of licences, consisting of representatives from the Länder, do not avail themselves of the possibility of awarding licences to private betting organisers, whereas State-owned lottery undertakings are permitted to organise bets on sporting competitions, lotteries and other games of chance without a licence, and to operate and advertise them via their nationwide network of commercial betting outlets, for up to a year after the award of any licences?

  ____________

¹ Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations (OJ 1998 L 204, p. 37).

Arendts on the sports betting licensing procedure in Germany

Germany: sports betting licensing procedure from Martin Arendts

EGBA: CJEU: INCONSISTENCY OF AUSTRIAN GAMBLING LEGISLATION CONFIRMED AGAIN

Brussels, 30 April 2014

 

EGBA welcomes today’s ruling of the Court of Justice of the European Union in the Pfleger case (C-390/12) that largely follows the Opinion issued by AG Sharpston on 14 November 2013. The Court confirms its well-settled case-law according to which a national gambling legislation is compliant with EU law only if it is consistent, i.e. if the declared public interest objectives are actually pursued free of hypocrisy, in a consistent and systematic manner. Not surprisingly, the Court also rules that the burden of proof regarding the proportionality and consistency of a measure rests with the Member States. Notably, this is the first time the CJEU has confirmed the applicability of the Charter of Fundamental Rights in a ruling on gambling.

• The CJEU recalled the Member States’ burden of proof: a Member State wishing to justify a restrictive measure “[…] must supply the court called on to rule on that question with all the evidence […] to be satisfied that the measure does indeed comply with the requirements deriving from the principle of proportionality” (para 50, emphasis added).[1]

• If the national court considers “[…] that the real purpose of the restrictive system at issue is not the fight against crime and the protection of gamblers, but a mere increase of State tax revenue […], it would have to conclude that the system at issue […] is incompatible with European Union law (paras 54-55, emphasis added). Therefore, the CJEU reconfirms that “[…] Article 56 TFEU must be interpreted as precluding national legislation […], where that legislation does not actually pursue the objective of protecting gamblers or fighting crime […] in a consistent and systematic manner” (para 56, emphasis added).

• For the first time in a gambling-related ruling the CJEU confirms the applicability of the Charter of Fundamental Rights of the European Union: “[…] an unjustified or disproportionate restriction of the freedom to provide services under Article 56 TFEU is also not permitted under […] Articles 15 to 17 of the Charter” (para 59).

• Finally, the CJEU reiterates that “where a restrictive system has been established for games of chance and that system is incompatible with Article 56 TFEU, an infringement of the system by an economic operator cannot give rise to penalties” (para 64, emphasis added).

EGBA Secretary General Maarten Haijer comments: ”We welcome the Court’s decision, which confirms that the Austrian gambling legislation is in breach of EU law. Today’s ruling strengthens the requirement that Member States’ gambling laws should be consistent.”
 

Mr Haijer further adds: “In this context, we want to remind that the European Commission acted in its proper role as guardian of the treaties by launching formal infringement proceedings against six Member States last November. Whilst we encourage the Commission to take the appropriate next steps in these proceedings and open new proceedings where necessary, we especially urge the Member States to pursue their stated public interest objectives in a consistent and systematic manner free of hypocrisy.”

The Austrian Gambling system has recently been subject to several Court cases both on national and EU levels, in particular the CJEU cases C-64/08, Engelmann; C-347/09, Dickinger and Ömer as well as C-176/11, Hit and Hit Larix, in which the CJEU has detected major inconsistencies in the Austrian gambling legislation and hence declared that major parts of the Austrian system are non-compliant with EU law.
 

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[1] The first and only prevalence study on Austria [Kalke et al 2011] shows very similar prevalence rates as in open, liberalized markets such as UK