Ruling on three cases referred to it by the German courts on Wednesday (8 September), the European court found that while monopolies were sometimes justified, Germany's efforts to promote gambling were inconsistent with its goal of protecting consumers.
"German rules on sporting bets constitute a restriction on the freedom to provide services and the freedom of establishment," reads the ECJ's judgement.
While the Court acknowledged that such restrictions may be justified to protect the public interest, such as combating gambling addiction, it stressed that in the German case, the public monopoly does not pursue the objective of combating the dangers of gambling in a consistent and systematic manner.
Indeed, state monopolies drive intensive advertising campaigns to encourage gambling in casinos and on automated games to maximise profits, the Court noted.
"In such circumstances, the preventive objective of that monopoly can no longer be pursued, so that the monopoly ceases to be justifiable," the ECJ concluded.
Austrian law goes beyond what's necessary to fight crime and fraud
In a similar case, the ECJ yesterday (9 September) found Austria to be in breach of EU law.
The Court noted that Austrian legislation, which only allows companies with their seat in Austria to operate casinos, contravenes EU rules on the freedom of establishment and discriminates against companies with their headquarters in another member state.
It also found that excluding operators whose seat is in another member state is disproportionate, as the measure goes beyond what is necessary to fight crime and fraud.
In an earlier ruling, the Court stated that EU countries could ban online gambling if their aim was to combat fraud (EurActiv 07/06/10).
EU Green Paper being prepared
EU Internal Market Commissioner Michel Barnier announced in February that after years of ad-hoc rulings by the ECJ to regulate gambling in Europe, the EU executive would seek a more coherent way to address the issue (EurActiv 12/02/10).
A Green Paper on the matter is due to for publication in the coming months. Member states have not been consulted on gambling since they decided to leave the issue out of the Services Directive in 2006.
