Court rules to end gambling monopolies

A second landmark ruling on gambling, the ‘Placanica case’, puts pressure on EU member states to change their national laws restricting access to provision of sports-betting services.

The European Court of Justice (ECJ) ruled on 6 March 2007 in the Placanica case, that “the Italian criminal penalties for the collecting of bets by intermediaries acting on behalf of foreign companies are contrary to Community law”.

The Placanica case involves the British sports betting company Stanley Leisure plc, the three Italian operators of which, Placanica, Palazzese and Sorricchio were charged in Italian courts with pursuing organised bet-collection activity without the required police authorisation, but obtaining such authorisation was impossible. 

The Italian Courts referred the cases to the ECJ to verify wheter the Italian legislation on betting and gambling was compatible with the Community principles of freedom of establishment and the freedom to provide services.

The ECJ stated: “A member state may not apply a criminal penalty for failure to complete an administrative formality where, in breach of Community law, such completion is refused or rendered impossible by that member state.”

Positions

Stanley International Betting Ltd, a company operating in international sports betting: "This judgement reinforces the historic 2003 'Gambelli' case-law ruling on freedom to provide cross-border services in sports betting." The company is now calling on the European Commission to act by enforcing this settled law and for government and regulators to fully apply it.

European Betting Association (EBA), an association of leading European gambling operators, believes that with the Placanica ruling the legal position of regulated European-licensed operators has been further clarified and that all the necessary guidance now exists to enable governments to revisit their policies in this area. The EBA hopes that governments looking for long-term solutions that are compliant with European law protect the interests of consumers and enable a regulated European industry to develop in partnership with governments as opposed to in conflict with them, now see and seize the opportunity for a dialogue with the industry.

European States Lotteries and Toto Association, an independent European association composed of State Lottery and Toto companies established in Europe welcomes the ECJ judgment as it "recognises that member states can decide to limit gambling and betting activities through a licensing system with a single or multiple operators and whereby the licensee(s) must be able to make a sufficiently attractive offer including advertising and the use of new distribution methods to execute its channelling task. (see §55 of the judgement)." 

MEP Christofer Fjellner (Sweden, EPP-ED): "The ruling is expressively clear and sends clear message to all stakeholders: companies, Commission and member states. To the member states, the message is 'You have to change your own legislation, or we will do it for you'. And to the Commission, they have to enforce the Treaty". 

The gambling verdict was warmly welcomed by another MEP Malcolm Harbour, the EPP-ED Group Spokesperson and Internal Market Coordinator. "Many EU countries are openly flouting internal market rules and discriminating against legitimate and well-managed sports-betting activities, including major UK operators. The Placanica case brings us closer to creating a genuine single market also in the gambling sector," he said, adding that "member states cannot, on the one hand, incite and encourage people to participate in their own state sponsored gambling activities, while at the same time invoking consumer protection as a reason to suppress sports betting".

Background

The European Court of Justice (ECJ) has previously stated that any restrictions which seek to protect general-interest objectives, such as the protection of consumers, must be 'consistent and systematic' in how they seek to limit activities. Therefore, a member state cannot invoke the need to restrict its citizens' access to gambling services if at the same time it incites and encourages them to participate in state games of chance or betting offered by national operators or a monopoly. 

The November 2003 ECJ verdict of the Gambelli case makes it harder for member states to restrict gambling. The ECJ states that any restrictions on the activities of companies operating in betting businesses constitute obstacles to the freedom of establishment and that a prohibition, enforced by criminal penalties, on participating in betting games constitutes a restriction on the freedom to provide services. The case was about Gambelli, an agent for Stanley International Betting Limited, being charged in Italy with criminal sanctions on the grounds that his activities violated Italian law as he accepted bets from Italian citizens. 

However, several member states have been reluctant to apply the Gambelli-case ruling and there is a backlog of gambling cases in which the Commission has long delayed taking action (see EURACTIV February 2006). 

For more background read "From Schindler to Placanica and beyond" at bettingmarket.com.

Further Reading

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