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On the 8th of September 2010 the European Court of Justice delivered a series of preliminary rulings regarding the compatibility of the German monopoly on games of chance with EU law.
The German rules on sporting bets constitute a restriction on the freedom to provide services and the freedom of establishment. One of such rulings concerns a Maltese operator Tipico.However, the ECJ finds that, having regard to the findings which they made in those cases, the German courts are right to take the view that the German monopoly rules do not limit games of chance in a consistent and systematic manner.
The ECJ observed that the fact that some games of chance are subject to a public monopoly whilst others are subject to a system of authorisations issued to private operators cannot, in itself, call into question the consistency of the German system as those games have different characteristics. The ECJ recalls that Member States have a broad discretion in determining the level of protection against the dangers emanating from games of chance. Thus, and in the absence of any Community harmonisation in the matter, Member States are not required to recognise authorisations issued by other Member States in that area. For the same reasons, and having regard to the risks posed by games of chance on the internet in comparison with traditional games of chance, Member States may also prohibit the offering of games of chance on the internet.
Green Paper
Over the last months, online gaming and lottery operations across the EU have given rise to a series of references to the ECJ, ECJ preliminary rulings as well several opinions by the Advocate General and infringement proceedings against EU member states. A number of ad hoc rulings have been delivered by the ECJ but these lacked consistency and in some case were diametrically opposed. The result is greater legal uncertainty for online gambing and lottery operators in the EU.
The EU Commission has commenced work on a Green Paper on the subject and this is due for publication in the coming months. The purpose of the green paper is to avoid further ad-hoc rulings by the ECJ in relation to gambling regulation in Europe. The best-case scenario is that the green paper eventually leads to a European directive. The Commission is expected to undertake a thorough assessment of the online industry as it currently stands and to consult online operators, both state-run and private sector.
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To download the ECJ Press release on recent rulings please Click Here.