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