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Questions and answers on the “Gambelli-Case” |
• How does Gambling concern the European Court of Justice (ECJ)?
Even the previous jurisprudence of the ECJ regarded the provision of gambling as a commercial activity in terms of the EC-Treaty (we are, after all, talking about money). Restrictions the freedom of services guarantee as g by the EC-Treaty must therefore “be justified by imperative requirements in the interest of the common good, be suitable for achieving the objective which they pursue and not go beyond what is necessary in order to attain it. They must in any way be applied without discrimination” (Gambelli Judgement, margin no. 65)
• What is new in the Gambelli-judgement ?
In this case, the ECJ dealt, for the first time, with a penal provision restricting the freedom to provide services. In reviewing the proportionality of the impugned provision, the ECJ stipulated the examination criteria to be observed by the national courts. These criteria are binding on German courts.
• Do betting customers also have the right to invoke the freedom of services guarantee ?
Yes, customers can rely on the prevailing jurisprudence of the ECJ, with regard to the so-called passive freedom to provide services. (Potential) customers are entitled to receive or to benefit as recipient from the services offered by a supplier established in another Member State without being hampered by restrictions (see Gambelli-judgement margin no. 55). Art. 285 of the German Criminal Code is therefore inapplicable insofar as Community Law takes precedence over it.
• What kind of discretionary power is attributed to the member states when restricting the freedom to offer services in the area of sporting bets ?
According to the ECJ “moral, religious and cultural factors” as well as the “morally and financially harmful consequences” of gambling can be taken into account (Gambelli-judgement margin no. 63). Thus the Member States and their authorities have a “margin of appreciation”. However, this does not mean, that thefreedom of services and freedom of establishment guarantees can be restricted with free discretion.. Rather, the imposed restrictions must comply with the rather strict conditions set forth by the ECJ – i.e. they must be non-discriminatory as well as proportional and appropriate.
• Is a drop in tax revenues a suitable justification for a restriction of the freedom of services guarantee?
From a Community Law perspective, the answer is clearly No. The ECJ explains this as follows: Tax income “may only be a fortunate side effect, but not the real reason for such restrictive policies”.
• Under which circumstances can a restriction of the freedom to provide services be considered “appropriate”?
Only where a comprehensible and coherent policy is being pursued. The ECJ explicitly refers to advertisement for state lotteries:
“In so far as the authorities of a Member State incite and encourage consumers to participate in lotteries, games of chance and betting to financial benefit of the public purse, the authorities of that state cannot invoke public order concerns relating to the need to reduce opportunities for betting in order to justify measures such as those at issue in the main proceedings.”
Given the extensive publicity for the provision of sporting bets by the state-owned Oddset and the market expansion strategy pursued by the German Lotto- und Toto Block, the restrictions on foreign providers from the EC cannot be upheld for this reason.
• Could the German states agree to only license German (state) providers?
From a Community Law perspective: clearly not. Discriminatory, i.e. regulations discriminating against providers form other Member States are never justified. Restrictions must apply without differentiation, i.e. they must apply in the same way and with the same conditions for providers established in Germany as well as for those from other Member States alike (Gambelli-judgement margin no. 70).
• Why did the ECJ not declare the Italian criminal law provision to be unlawful?
The ECJ did not have the authority to directly declare the Italian provision as unlawful in these proceedings. The judgement was rendered in the context of a preliminary reference, which was used by the Italian penal court dealing with the case, to clarify preliminary questions of Community Law. In such a case, the ECJ interprets Community Law, not the relevant national provisions.
Nonetheless, from our point of view the ECJ clearly indicated which decision should be reached by the Italian court. It clearly questioned the proportionality of the penal sanction.
• Does freedom to provide services lead to the “Wild West” ?
No, of course not. The ECJ has, on several occasions stressed that regulations to combat fraud, in particular, are admissible. However, these regulations must not go beyond what is necessary. Regulations entailing controls and penalties, which the supplier of the service is subject to in his Member State of establishment where he is lawfully constituted must be taken into consideration. Especially with regard to the strict licensing conditions and the adequate control of English and Austrian bookmakers a restriction to the freedom of services guarantee should not be valid on the grounds of fighting fraud alone. |
