1. BELGIAN AND FRENCH VIEWS OF EUROPEAN GAMBLING REGULATION Thibault Verbiest Attorney at the Paris and Brussels Bars Thibault.verbiest@ulys.net University of Tilburg, 23 November 2005

2. Belgian and French views of European gambling regulation What is the European gambling regulation? (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. Belgian and French views of European gambling regulation (2) The ECJ case-law  Schindler, Zenatti and Läärä cases (1994-1999): restrictions ok if Non discriminatory 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.

4. Belgian and French views of European gambling regulation 2) The ECJ case-law  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

5. Belgian and French views of European gambling regulation (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

6. Belgian and French views of European gambling regulation (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

7. Belgian and French views of European gambling regulation (3)Secondary EU law and initiatives of the Commission  Gebhardt report on the services directive (April 2005)  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

8. Belgian and French views of European gambling regulation (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

9. Belgian and French views of European gambling regulation (4) France: regulatory framework  Restrictive gaming policy Act of 21 May 1836 on lotteries Act of 12 July 1983 on games of chance Act of 15 June 1907 on casinos Act of 2 June 1891 on horse races

10. Belgian and French views of European gambling regulation (4) France : regulatory framework  Games of chance 1983 Act: illegal provided that The operation involves a gaming house (remote casinos) This gaming house is open to the public Games of chance take place on the premises

11. Belgian and French views of European gambling regulation (4) France : regulatory framework  Lotteries 1836 Act: illegal provided that The offer is made to the public The intention is to make a profit The outcome of the lottery is random Two exceptions:  FDJ, also online  PMU, also online

12. Belgian and French views of European gambling regulation (4) France : regulatory framework  Perben II Act, 9 March 2004 Offence to distribute or to facilitate the distribution of tickets, to announce, to display or to make public the existence of a forbidden lottery  Criminal complicity rules

13. Belgian and French views of European gambling regulation (4) France: case-law  TGI Paris, 8 July 2005 PMU wins case against Malta established bookmaker Zeturf Debate focused on intellectual property aspects and PMU’s exclusive rights No assessment of the compliance of French gaming policy with European law Delocalization of gambling not easy: see Regulation 44/2001 Appeal lodged: should focus on Gambelli

14. Belgian and French views of European gambling regulation (4) France: case-law  TGI Paris, 2 November 2005, Summary proceedings Order condemning the two companies hosting Zeturf’s website to:  prevent the access to the site www.zeturf.com as long as online sports betting activity are offered, under a 1500 € penalty per day  to pay a provisional indemnity of 30 000 € to the PMU  Appeal lodged against the order ► Paris Court of appeal, 22 November 2005

15. Belgian and French views of European gambling regulation (4) France: case-law  Criminal Court of Nanterre, 12 November 2004 Condemnation of a French individual associated with the website www.kipari.com.www.kipari.com Following a complaint of the FDJ and the PMU, the Court ordered to stop taking bets from French residents

16. Belgian and French views of European gambling regulation (4) France: Senate report  2002 Trucy report on French gaming policy Partial vision: state protectionism but no answer to compulsive gambling and dynamism of the gaming market Ambivalent position of the French State: moral issues / State revenues ►French state regulator and majority shareholder of the FDJ Absence of regulatory initiative: regulatory framework for games out-dated and unnecessary complicated Risks: emigration of certain operators / development of illegal activities.

17. Belgian and French views of European gambling regulation (5) Belgium: regulatory framework No blanket regulation for the organization of games Three acts:  Games of chance Act 1999  National Lottery Act 2002  Sports betting Act 1963 (pool betting) Games that are not subject to any of these acts can be organized without a particular “gaming license”

18. Belgian and French views of European gambling regulation (5) Belgium: regulatory framework  Games of chance 1999 Act Article 2 “any game involving a stake and whereby the result or the winner is determined by chance” Section 4: licence requirement “No person shall operate one or more games of chance or gaming establishments without a licence … previously granted by the Gaming Commission.” Ended the « game of chance vs. competition » debate

19. Belgian and French views of European gambling regulation (5) Belgium: regulatory framework  1999 Act: Shortcomings Qualification of “stake” Betting activities on sports events excluded: fixed- odd betting not regulated ► no bookmaker permit required Technology neutral ► applies to games of chance organized by means of new technologies

20. Belgian and French views of European gambling regulation (5) Belgium: regulatory framework  National lottery Act 2002 Monopoly on remote gaming operations  Shortcomings  Initiatives to modify the 1999 Act: private gaming operators may obtain licence to operate  EC Notification Directive 1998/34 ► compulsory to notify regulatory proposal concerning information society services (ie, online gaming services), otherwise unenforceable against individual gaming operators

21. Belgian and French views of European gambling regulation (5) Belgium: regulatory framework  Consequence: Program Act December 2002 modifies 2002 National lottery Act Abolition of National Lottery monopoly No exclusive right to organize remote games

22. Belgian and French views of European gambling regulation (5) Belgium: case-law  Constitutional Court, 10 March 2004 2002 National Lottery Act partially infringes the Belgian Constitution. Explicit reference to Gambelli: MS cannot invoke public order concerns, when at the same time they incite and encourage consumers to participate in games to the financial benefit of the public purse.

23. Belgian and French views of European gambling regulation (5) Belgium: case-law  Consistent gaming policy shortcomings Court does not consider if the exclusive right of the National Lottery to organize remote gaming de facto meets EU law requirements Does not consider the consistency of the Belgian gaming policy:  Consumer Protection Act 1991►exclusive right of national lottery to advertise ?  National Lottery’s compliance with 1999 Act ?  Necessity/proportionality assessment? ►statistical evidence (Lindman case)  March 2003 contract: “National lottery shall carry out adequate marketing campaigns”► incentive to play

24. Belgian and French views of European gambling regulation (5) Belgium: future  Gaming Board: will regulate in a more consistent manner  Possible extension of the scope of the 1999 Act on games of chance to all sorts of games, including betting activities  Private operators may be granted a remote gaming license to offer and promote online casinos and games of chance

25. Belgian and French views of European gambling regulation  General conclusions Ambivalent role of the French state: public funds vs morality of gaming services ► no consistent gaming policy no single public authority competent to monitor the sector no public program to counter the negative consequences of compulsive gambling ► no responsible gaming policy Complaints lodged to the European Commission by Maltese bookmakers against French State Belgium: partial and abstract application of Gambelli Belgium willing to open up market to online private operators, not France: exclusivity of FDJ & PMU Complaints lodged to the European Commission by German firm against Belgian National Lottery Pressure growing on both MS to open market, Belgium more compliant with EU law requirements