European Gambling Sector Awaits Landmark ECJ Judgment
02 Sep, 2009
Representatives from both private and state monopoly groups believe the ECJ’s decision on the high-profile case - due to be handed down next on September 8 - will likely prove to be highly significant in shaping the future development of the remote gaming sector in Europe.
The case was originally referred to the ECJ from a court in Oporto in 2007 after the Portuguese Professional Football League and its sponsorship partner, the Vienna-based internet gaming operator Bwin, appealed fines imposed against them under a Portuguese law that grants a monopoly over online sports-betting in Portugal to the Lisbon-based charity, Santa Casa da Misericórdia.
The parties claim that the Portuguese legislation violates principles of EU law, but the wider circumstances of the case mean the ECJ’s ruling is likely to resonate across Europe.
While Europe’s highest court has previously issued several high-profile gambling-related judgments, legal experts point out that ‘Bwin Liga’ will be the first dealing directly with a state-sanctioned monopoly. It is also the first ECJ case to specifically address the internet in the context of restrictions applied to cross-border gambling services.
The judgment’s timing is also significant.
Recent research conducted by GamblingCompliance found that as many as 19 of the 27 EU member states are presently addressing their online gaming markets through reform.
The ECJ’s ‘Bwin Liga’ ruling is therefore certain to be factored into these processes that remain ongoing in core markets including France, Spain and Sweden.
“The judgment will have consequences for the provision of gambling services via the internet in all member states,” said a spokesperson for European Lotteries, the representative body for Europe’s state-controlled lottery sector. “[The ruling] is therefore expected with great interest by gambling providers in the entire European Union and [is] expected to be a landmark case.”
The ECJ is expected to answer two specific questions referred by the Oporto court: Firstly, whether the Portuguese prohibition applied against Bwin’s sponsorship violates fundamental freedoms guaranteed by the EC Treaty, and also; whether it is lawful under EU law to, “establish a monopoly in favour of a single body for the operation of lotteries and mutual betting and then to extend that monopoly to... the internet.”
In his lead opinion on the case last October, ECJ Advocate General Yves Bot said he believed that consumer protection risks associated with internet gambling granted EU states wide discretion to restrict their domestic online gaming markets.
A similar finding by the full panel of ECJ judges would be hugely influential.
As outlined in GamblingCompliance’s report, ‘Market Barriers: A European Online Gambling Study 2009’, although the likes of France and Spain have recently taken steps towards introducing a licensing system for internet gambling, other states, by contrast, are pursuing efforts to actually strengthen their national monopolies.
The likes of Greece, Germany and Norway may hope to see the legitimacy of their state monopolies effectively vindicated by Europe’s highest court next week. And an affirmative ruling on the second question referred to the court could also advance moves to see state monopoly operators in Holland and Germany establish a firmer presence on the web, as well as uphold the validity of online poker monopolies already set up in Sweden and in Austria.
European Lotteries said it believes the looming ECJ verdict will serve to strengthen the monopoly sector’s hand in the ongoing debates surrounding the sector’s future in the EU.
The group said: “Based on the Advocate General’s opinion delivered in October 2008, European Lotteries is confident that the court will deliver a judgment that will confirm the right of member states to determine how internet gambling services are provided within their jurisdiction.
“While the Advocate General’s opinion is not binding for the court, it is followed by the ECJ judges in most cases.”
But Clive Hawkswood, chief executive of the Remote Gambling Association (RGA), the private sector lobbying group, said private operators are equally confident the court will closely follow previous judgments issued in cases such as Gambelli (2003) and Placanica (2007).
“What we’re looking out for is that the ECJ maintains the same case law... and says that in terms of market access, freedom of establishment etc. there is no difference between a state monopoly and a private operator,” Hawkswood told GamblingCompliance.
“The bigger question mark over why this case could be slightly different is that it involves a lottery. But standing back from that, I can’t see a lottery as a form of gambling should be treated any differently.
“If the ECJ stepped outside the line on that it would be very disappointing. It would be very disappointing in the ECJ saw any distinction.”
Sigrid Ligné, secretary general of the European Gaming & Betting Association (EGBA), another private sector grouping, said that the EGBA was “eagerly awaiting the ECJ ruling.”
“The effect of the ruling can only be determined upon reading the verdict,” Ligné said. “Yet, we are confident that the ECJ will confirm, in line with the Gambelli and Placanica rulings, that gaming services are fully subject to the rules of the internal market.”
Beyond the two questions referred from Oporto, further issues may also be addressed by the European justices in next week’s verdict.
For example, at oral proceedings held in Luxembourg last year, the ECJ panel asked for input on wider considerations, including whether it was legal for an EU state to restrict its sports-betting market to a monopoly provider when land-based casinos and slot machines were operated under a private concession system.
With these questions of huge potential significance in certain EU countries – including, again, in Europe’s economic powerhouse, Germany – they, too, will be eagerly anticipated by the gambling sector, according to observers.
“Almost as important as the verdict itself is what the ECJ says around it, it’s the wider implications,” the RGA’s Hawkswood said.
The ECJ’s decision of the ‘Bwin Liga’ is set to be published on the morning of Tuesday, September 8. GamblingCompliance will be bringing early expert reaction to the ruling all throughout next week.
The GamblingCompliance report, ‘Market Barriers: A European Online Gambling Study 2009’, contains a full guide to existing ECJ case law up to the ‘Bwin Liga’ verdict, as well as detailed analyses of the restrictions currently applied to online gambling services in each of the 27 EU member states plus Norway.
To purchase a copy of the report, or for further information, please click here.
The case was originally referred to the ECJ from a court in Oporto in 2007 after the Portuguese Professional Football League and its sponsorship partner, the Vienna-based internet gaming operator Bwin, appealed fines imposed against them under a Portuguese law that grants a monopoly over online sports-betting in Portugal to the Lisbon-based charity, Santa Casa da Misericórdia.
The parties claim that the Portuguese legislation violates principles of EU law, but the wider circumstances of the case mean the ECJ’s ruling is likely to resonate across Europe.
While Europe’s highest court has previously issued several high-profile gambling-related judgments, legal experts point out that ‘Bwin Liga’ will be the first dealing directly with a state-sanctioned monopoly. It is also the first ECJ case to specifically address the internet in the context of restrictions applied to cross-border gambling services.
The judgment’s timing is also significant.
Recent research conducted by GamblingCompliance found that as many as 19 of the 27 EU member states are presently addressing their online gaming markets through reform.
The ECJ’s ‘Bwin Liga’ ruling is therefore certain to be factored into these processes that remain ongoing in core markets including France, Spain and Sweden.
“The judgment will have consequences for the provision of gambling services via the internet in all member states,” said a spokesperson for European Lotteries, the representative body for Europe’s state-controlled lottery sector. “[The ruling] is therefore expected with great interest by gambling providers in the entire European Union and [is] expected to be a landmark case.”
The ECJ is expected to answer two specific questions referred by the Oporto court: Firstly, whether the Portuguese prohibition applied against Bwin’s sponsorship violates fundamental freedoms guaranteed by the EC Treaty, and also; whether it is lawful under EU law to, “establish a monopoly in favour of a single body for the operation of lotteries and mutual betting and then to extend that monopoly to... the internet.”
In his lead opinion on the case last October, ECJ Advocate General Yves Bot said he believed that consumer protection risks associated with internet gambling granted EU states wide discretion to restrict their domestic online gaming markets.
A similar finding by the full panel of ECJ judges would be hugely influential.
As outlined in GamblingCompliance’s report, ‘Market Barriers: A European Online Gambling Study 2009’, although the likes of France and Spain have recently taken steps towards introducing a licensing system for internet gambling, other states, by contrast, are pursuing efforts to actually strengthen their national monopolies.
The likes of Greece, Germany and Norway may hope to see the legitimacy of their state monopolies effectively vindicated by Europe’s highest court next week. And an affirmative ruling on the second question referred to the court could also advance moves to see state monopoly operators in Holland and Germany establish a firmer presence on the web, as well as uphold the validity of online poker monopolies already set up in Sweden and in Austria.
European Lotteries said it believes the looming ECJ verdict will serve to strengthen the monopoly sector’s hand in the ongoing debates surrounding the sector’s future in the EU.
The group said: “Based on the Advocate General’s opinion delivered in October 2008, European Lotteries is confident that the court will deliver a judgment that will confirm the right of member states to determine how internet gambling services are provided within their jurisdiction.
“While the Advocate General’s opinion is not binding for the court, it is followed by the ECJ judges in most cases.”
But Clive Hawkswood, chief executive of the Remote Gambling Association (RGA), the private sector lobbying group, said private operators are equally confident the court will closely follow previous judgments issued in cases such as Gambelli (2003) and Placanica (2007).
“What we’re looking out for is that the ECJ maintains the same case law... and says that in terms of market access, freedom of establishment etc. there is no difference between a state monopoly and a private operator,” Hawkswood told GamblingCompliance.
“The bigger question mark over why this case could be slightly different is that it involves a lottery. But standing back from that, I can’t see a lottery as a form of gambling should be treated any differently.
“If the ECJ stepped outside the line on that it would be very disappointing. It would be very disappointing in the ECJ saw any distinction.”
Sigrid Ligné, secretary general of the European Gaming & Betting Association (EGBA), another private sector grouping, said that the EGBA was “eagerly awaiting the ECJ ruling.”
“The effect of the ruling can only be determined upon reading the verdict,” Ligné said. “Yet, we are confident that the ECJ will confirm, in line with the Gambelli and Placanica rulings, that gaming services are fully subject to the rules of the internal market.”
Beyond the two questions referred from Oporto, further issues may also be addressed by the European justices in next week’s verdict.
For example, at oral proceedings held in Luxembourg last year, the ECJ panel asked for input on wider considerations, including whether it was legal for an EU state to restrict its sports-betting market to a monopoly provider when land-based casinos and slot machines were operated under a private concession system.
With these questions of huge potential significance in certain EU countries – including, again, in Europe’s economic powerhouse, Germany – they, too, will be eagerly anticipated by the gambling sector, according to observers.
“Almost as important as the verdict itself is what the ECJ says around it, it’s the wider implications,” the RGA’s Hawkswood said.
The ECJ’s decision of the ‘Bwin Liga’ is set to be published on the morning of Tuesday, September 8. GamblingCompliance will be bringing early expert reaction to the ruling all throughout next week.
The GamblingCompliance report, ‘Market Barriers: A European Online Gambling Study 2009’, contains a full guide to existing ECJ case law up to the ‘Bwin Liga’ verdict, as well as detailed analyses of the restrictions currently applied to online gambling services in each of the 27 EU member states plus Norway.
To purchase a copy of the report, or for further information, please click here.