1. Remote gambling: the EU legal framework Evelyn Heffermehl Member of the Brussels Bar ULYS Evelyn.heffermehl@ulys.net Warsaw Friday, 18 November 2005

2. Remote gambling: the EU legal framework Which legal framework are we talking about? (1) The EC Treaty  article 50 EC Treaty: services are provided for remuneration  Article 49 ECT: freedom to provide services within the Community  Article 46 ECT: discriminatory restrictions ok if public policy, public security, public health.

3. Remote gambling: the EU legal framework (2) The ECJ case-law  Schindler, Zenatti and Läärä cases (1994-1999): non discriminatory restrictions ok if Justified by imperative reasons of general interest: to curb harmful effects of gambling Necessary and proportionate: must guarantee the achievement of the objective pursued and not go beyond what is necessary.  The Gambelli and Lindman cases (2003): limitation of possible restrictions Consistent gaming policy Clear guidelines to national courts on how they should use their discretional power to interpret the facts of the case Country of origin principle Proof of clear and present risks for consumers Proof of proportionality by submission of statistical or other evidence

4. Remote gambling: the EU legal framework (3)Secondary EU law and initiatives of the Commission  E-commerce directive (2000): second report awaited 2005 Ensure free movement of information society services Internal market clause Exclusion of gambling services  Study on gambling services in the internal market To evaluate how the differing laws regulating online and offline gambling services impact on functioning of the Internal Market To evaluate whether those laws restrict the economic and employment growth associated with gambling services Publication of report June 2006  Proposal for a Directive on Services in the Internal Market (Jan 2004) Country of Origin principle (//internal market clause) Gambling excluded from COP

5. Remote gambling: the EU legal framework (3)Secondary EU law and initiatives of the Commission  Gebhardt report on the services directive (April 2005)  Complete exclusion of gambling To finance public budget To protect society at large MS have the right to impose restrictions on cross-border provision of services to maintain social order and consumer protection  Mutual recognition & Country of Destination Country of origin rules do not apply in fields of consumer protection, environmental protection, labour law MS may invoke Country of Destination principle if :  Reasons of public interest (social policy)  This interest is not yet protected by provisions applicable to the service provider in his Country of Origin (equivalence)  These rules are proportionate, generally applicable, business- related in nature

6. Remote gambling: the EU legal framework (3) Secondary EU law and initiatives of the Commission  Inconsistency of the Gebhardt report with ECJ case-law The right of MS to impose restrictions is not absolute: see Gambelli and Lindman (consistent gaming policy) Restrictions of cross-border gambling to secure public revenues is not a justified ground to override the freedom to provide/receive services Schindler, Zenatti, Gambelli cases  Vote on Gebhardt report postponed until 21 November 2005  EP’s plenary will probably vote in January 2006

7. Remote gambling: the EU legal framework (4)National case-law after Gambelli  Very diverging, sometimes conflicting Decisions from the Supreme and Constitutional courts in Germany, the Netherlands, Italy, France and others  Germany Supreme Court and Constitutional Court question the legality of German gaming policy  The Netherlands Conflict between summary proceedings and main proceedings decisions  Italy Supreme court decision leads to ECJ referrals District Court of Rome refuses to enforce Italian gaming restrictions to a UK licensed bookmaker

8. Remote gambling: the EU legal framework (4)National case-law after Gambelli: Germany  Landgericht München, 27 October 2003 Held that the local gaming monopoly was not adopted and maintained for reasons of public order, but mostly for tax reasons Not justified to impose on an Austrian licensed bookmaker an obligation to obtain an additional German license: COP  German Supreme Court, 1 April 2004 Editor of an online newspaper cannot be held liable for inserting a link to an Austrian licensed bookmaker Court questioned consistency of German gaming policy with Gambelli Referred to the LG decision

9. Remote gambling: the EU legal framework (4)National case-law after Gambelli: Germany  German Federal Constitutional Court, 27 April 2005 Doubts on the compatibility of the German cross-border gaming restrictions (arti.248 StGb) with the requirements of European law Necessity of in concreto analysis of the compliance of these national restrictions with EU law and of the risks of cross-border gambling for society Referral to the ECJ almost inevitable in e-gaming cases Questioned the proportionality of criminal repression against gaming activities duly licensed in another MS

10. Remote gambling: the EU legal framework (4)National case-law after Gambelli: Germany  German Federal Constitutional Court, oral hearing 8 November 2005 Case relating to the consistency of a provision of the German criminal code (art.284) with the freedom to exercise a profession (art.12 German constitution) Court asked local authorities to act prudently and refrain from too restrictive actions against local intermediaries while decision pending Decision delayed until February 2006 but oral hearing seems to indicate that there will be a liberalisation of the German gaming market

11. Remote gambling: the EU legal framework ( 4)National case-law after Gambelli : The Netherlands  Supreme Court 18 February 2005: Summary proceedings Maintains the exclusive rights of De Lotto and Holland Casino  Court of Arnhem, 2 June 2004: Main proceedings, interim judgment Proof of a consistent gaming policy required Doubts on consistency with EU law  Court of Arnhem, 31 August 2005 Dutch online gaming restrictions consistent with EU law Foreign bookmakers must stop offering online services to Dutch citizens

12. Remote gambling: the EU legal framework (4)National case-law after Gambelli: Italy  Supreme Court April 2004 Gaming restrictions compatible with EU law  Larino District Court, 2004 Referral to the ECJ: Court questions the consistency of gaming restrictions with EU law by referring to the Supreme court’s decision Other courts have also referred to the ECJ Decisions awaited  Rome District Court, February 2005 Refused to enforce gaming restrictions to a UK licensed bookmaker Italian law is not applicable to remote gaming operations No infringement of the exclusive rights of the national operator

13. Remote gambling: the EU legal framework (4)National case-law after Gambelli: France  TGI Paris, 8 July 2005 Pari Mutuel Urbain wins case against Malta established bookmaker Zeturf Debate focused on intellectual property aspects and PMU’s exclusive rights Court did not assess the compliance of French gaming policy with European law Delocalization of gambling not easy: see Regulation 44/2001

14. Remote gambling: the EU legal framework (5) Conclusions and forecasts  Diverging post-Gambelli case-law points out the need for a Community act in the field of gambling  Act would probably be sector specific (see exclusion of gambling services from the Gebhardt report)  Swiss Institute’s report will serve as a basis for a future EU act  The number of complaints to the Commission on national gambling restrictions have increased significantly  Distortions are likely to increase as Great-Britain and Malta adopt a more liberal approach towards online gambling  ECJ referrals decision  Second review of the e-commerce directive