Transcript Document

World Online Gambling Law Report
Summer Retreat 2004
The European legal perspective
prospects for the future
Thibault Verbiest
Attorney-at-law at the Bars of Brussels and Paris
Partner Ulys Law Firm
Professor at the University of Paris I Sorbonne
WWW.ULYS.NET
[email protected]
Law of :
• New Technologies • Intellectual Property • Media and Entertainment • Commercial Law •
Introduction & Overview
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2.
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5.
Introduction: regulatory framework
The Gambelli and Lindman decisions
Post-Gambelli jurisprudence
Position of the European Commission
Conclusion & Forecasts
European Regulatory Framework
no : EC Law not applicable
E
C
art.49: freedom to provide services
1)economic activity ?
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Restrictions may be imposed, provided that
3) not discriminatory ?
4) justified by the Treaty ?
Yes : 2) goods or service ?
5) necessary and proportionate ?
art.30
 The Internal Market Strategy for Services
 Remove all remaining barriers in the Internal Market
 Directive 98/48 : e-gaming is an information society service
 E-gaming regulation must be notified (Belgium, Denmark?)
 Electronic commerce Directive : Internal Market clause
 Member States may not impose additional obligations
 Proposal for a Directive on Services in the Internal Market
 Create a real Internal Market – Home Country control
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The European Court of Justice
The Gambelli and Lindman decisions
Lindman case
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Facts of the case
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Land based gaming operation
Advocate-General makes analogy with remote gaming operation
reception of services across borders
ECJ: 13 November 2003
 Restriction is infringing article 49 of the EC Treaty
 Burden of Proof ?
 “Analysis of the appropriateness and proportionality of the
restrictive measure…”
 “Statistical or other evidence which enables any conclusion as
to the gravity of the risks connected to playing games of
chance”
Member States must not only claim there is a
risk, but also prove that it exists
The Gambelli Case - Background
 First remote gaming case brought before the ECJ
 Opinion of Advocate-General Alber (13.03.2003):
the Italian legislation in the field of sports betting
imposed a discriminatory measure and - in view of
the facts of the case - failed the required justification
on grounds of general interest
The Gambelli Case - Decision
Is it a landmark decision ?
 Application by analogy to “remote gaming”
 Confirmation of the Schindler decision
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§ 59 “Article 4 of Law No 401/89, constitutes a restriction on the
freedom of establishment and on the freedom to provide services.”
§ 60 & 65: “the restrictions must be justified by imperative
requirements in the general interest, 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 event be applied without
discrimination”
§66: “It is for the national court to decide whether …. satisfy those
conditions. To that end… “
The Gambelli Case - Decision
§ 66 : “... To that end, it will be for that court to take
account of the issues set out in the following
paragraphs.”
Directing the discretional power of the
national court
1. Reasons of justification
2. Discriminatory character
3. Proportionate & necessary
Lindman?
The Gambelli Case - Decision
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Justification by reasons of public order
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§67 MS can impose restrictions, “inasmuch as they must
serve to limit betting activities in a consistent and systematic
manner”.
§ 69 MS cannot invoke public order concerns if the
Member State incites and encourages
consumers to
participate in games
The national authority: §19-23
“cannot
find in those restrictions any public policy
concern”
“cannot ignore the extent of the apparent discrepancy
between”
The Gambelli Case - Decision
 Discriminatory character:
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restrictions must be applicable without distinction
UK established operators = Italian operator
Discrimination: if imposed conditions are in
practice to be met more easily by Italian operators
than by foreign operators
Freedom of establishment: §48-49
“the Italian rules governing invitations to tender make it
impossible in practice for capital companies quoted on
the regulated markets of other Member States to obtain
licences “
The Gambelli Case - Decision

Proportionate & necessary?
1. Restrictions
2. Criminal
penalties
1.
Necessary to combat fraud
2.
Intermediaries lawfully constituted
& authorized
3.
Gaming provider already subject to
rigorous controls in the UK
Internal Market clause
§ 21: “The national court questions whether the principle
of proportionality is being observed, …”
Gambelli Case: some final considerations
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The Court does not formally conclude that the Italian
legislation is infringing one of the ground principles of
European Community law
Consistent gaming
policy?
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However, by directing the national court, its conclusion
should be similar to the opinion of A.G. Alber
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Internal Gaming Market?
•
Too soon to cheer?
Post- Gambelli jurisprudence
Position of the European Commission ?
Post-Gambelli jurisprudence
Post-Gambelli jurisprudence
The right to impose restrictions
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Application in abstracto or in concreto?
Justification of the restriction &
consistency of the gaming policy
 § 75 Gambelli
“It
is for the national court to determine whether the
national legislation, taking account of the detailed rules
for its application, actually serves the aims which might
justify it, and whether the restrictions it imposes are
disproportionate in the light of those aims."
Post-Gambelli jurisprudence
Belgium:
Constitutional Court
Italy: Corte Suprema di Cassazione
Germany?:
Arnsberg (Nov.2003), Stade (Nov.2003), Bayern (Nov.2003)
Berlin (Sep. 2003), Munich I (Oct. 2003), Hessen (Feb. 2004)
BGH (April 2004)
Netherlands?:
Betfair (Feb. 2004) >< Ladbrokes (2 June 2004)
Ladbrokes
District Court of Arnhem: main proceedings
1.
2.
3.
« locus » of the gaming activity
Evaluation of the Dutch gaming policy
Interlocutory judgement
The locus of the operation
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(1)
Ladbrokes: games are organized in the UK = not a
game of chance in meaning of the WoK 1964 (Betfair)
Court retakes motivation of Arnhem Court of Appeal
of 2 September 2003 (Ladbrokes summary
proceedings)
Ladbrokes offers Dutch residents a possibility to bet
without having the required license
The fact that Ladbrokes is UK based and managed is
irrelevant
Alternative approach?
Turku,
31 March 2003
 Munich I, 27 October 2003: Bet-at-Home
Locus of the operation: alternative approach
 Turku:
31 March 2003
“A lottery is arranged where the central activity concerning the game is
handled and carried out. Internet is only a distribution channel.
Possible distance sales of services do not result in the gaming activity
being considered to be arranged on every separate location where a
customer happens to reside.
In the present case, the server is situated in Mariehamn. Also PAF’s
management and administration are located on Åland. Considering that
both the maintaining of the gaming services and the operational
decision-making, the activity is practiced on Åland, whereas PAF’s
gaming activity has to be considered to be arranged on Åland”.
Locus of the operation: Alternative approach
Munich I: 27 October 2003
« Recognition » of the internal market clause
organisation of sports bets and lotteries is subject to a
monopoly.
monopoly is not adopted for reasons of public order, but
for tax reasons.
Not justified to impose to an Austrian licensed bookmaker
an obligation to obtain an additional German license.
Similar reasoning followed by criminal court of Bremen
(march 2004)
Dutch gaming policy (2.1)
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The Court recognizes the right to impose
restrictions on the cross-border provision of
gaming services, but requirements must be met
in concreto!
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Betfair case > < in concreto assessment of the
grounds of justification
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Discriminatory character
Reasons of public order
Consistent gaming policy and the de facto limitation of
« the desire to gamble »
Dutch gaming policy (2.2)
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Annual reports demonstrate that the
objective pursued is to generate as
much money as possible
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De Lotto: increase of turnover has the highest
priority (2001)
Allocation of profits to charity is a positive side
effect, but is not a justification
Release of new games
Average annual turnover increase of 10% (’97-2002)
No reference is made towards compulsive
gambling and the protection of consumers .
Dutch gaming policy (2.3)
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Expansive marketing strategy:
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the direct and indirect promotion of gaming
activities on radio and TV shows
(unsolicited) direct mail actions to attract new
customers, this in combination with « free
games »
Marketing budgets
The De Lotto is proud to announce that it won
some prices for its
jackpot advertising
campaings.
not-won-money-back” guarantee
Visit to Holland casino is a normal day out with
the family
Dutch gaming policy (2.4)
The Court held that the objective was to
stimulate the demand for games, even when
such a demand was inexistent
The Court does not see how these activities
can correspond to a consistent gaming policy
designed to reduce the possibility to participate in
a game of chance
Interlocutory judgement(3)
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The Court requests the Dutch Government and
the De Lotto to come up with some additional
“clarifications” (15.09.2004)
The Court refused to condemn Ladbrokes to
block access to www.ladbrokes.com
The Court referred to the gaming platform of the
De Lotto (www.lotto.nl) and questioned whether
the possibility to bet on foreign sports events
could be reconciled with the Dutch Gaming act
The position of the
European Commission
The position of the EU Commission
1. Electronic Commerce Directive
 Remote gaming service is service of the information
society – Notification (Dir. 98/48)
 Article 1.5 excludes “gambling activities which involve
wagering a stake with monetary value in games of
chance, including lotteries and betting transactions.”
 Scope of the exclusion: Spain?
 Free games
 Review every two years
 First Report on the application of the electronic commerce
directive (21 November 2003)
The position of the EU Commission
“Online gambling, which is currently outside the scope
of the Directive, is a new area in which action may be
required because of significant Internal Market
problems - see for example Case C-243/01s of the
European Court of Justice (ECJ press release
CJE/03/98), concerning criminal proceedings in Italy
against persons collecting Internet bets on behalf of a
bookmaker legally licensed in the UK. The
Commission will examine the need for and scope of a
possible new EU initiative. In addition, the Commission
is examining a number of complaints it has received
concerning cross-border gambling activities. “
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Scope of the exclusion: forum shopping: cf. Safe Harbours
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Regulation in new Member States
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Complaints: cf. Denmark / Greece
The position of the EU Commission
2. Proposal for a Directive on Services
in the Internal Market
 Create a real Internal Market for services, including
gambling services
 Provision of Services
 Application of the country of origin principle (Internal
Market Clause)
 A UK established bookmaker will only be subject to UK
legislation and Italian authorities must recognize the
adequate character of the protection offered in the UK.
Therefore, they cannot impose additional restrictions on
the operation of the UK bookmaker.
The position of the EU Commission
2. Proposal for a Directive on Services
in the Internal Market
 Exception
for “sensitive areas”, including gambling services
 Development of specific rules by 2010 (study?)
 As from 2005 present harmonized EU-wide rules
on gambling services
 The right to receive services across borders?
Conclusion & forecasts
 Gambelli & Lindman Decision :
Implications on national procedures?
 European Commission
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Will launch a study on the current legal and market situation
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Service Directive? Other initiatives & instruments
 EU integration :
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Justification of restrictions (consumer protection & organized crime)
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National legislation : conflicting gaming policies and the de facto
cross-border nature of remote gaming
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New Member states: Malta: Remote Gaming Regulations 2004
I thank you for your attention!
Q &A
[email protected]
www.ulys.net