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EU ADVOCATE GENERAL RELEASES OPINION IN AUSTRIAN ONLINE GAMBLING CASE

Written On 4/1/11  By Frank Polliern :

Criminal law cannot be used to enforce gambling laws that do not comply with EU law
 
In Europe, Advocate General Bot has released his opinion regarding ECJ case C-347/09, an Austrian online gambling issue in which the AG opines that criminal law cannot be used to enforce gambling laws that do not comply with EU law
 
The case follows an earlier finding in September 2010 by the European Court of Justice which concluded that Austrian legislation on internet gambling is in conflict with European law due to a lack of transparency in the licensing process, and the requirement that licensees have a presence in Austria - circumstances that could be applied to other new national regulatory schemes emerging in Europe.
 
According to the AG “...a member state cannot enforce a criminal sanction in relation to an administrative formality [… which] is refused or made impossible by the member state concerned in violation of EU law”. He further confirms that the mutual recognition principle is relevant for the online gambling sector.
 
According to AG Bot “the obligation of mutual recognition of authorisations delivered in other member states would become relevant” if monopolies are held incompatible with EU law.
 
The Court itself has recently confirmed that the EU Treaty does not allow legislation that "obliges [a] person to obtain a new licence, without due account being taken of the fact that the conditions of issue are, essentially, the same as those which apply to the licence already issued to that person in another EU Member State´.
 
Requiring operators to fulfill essentially the same conditions they have already fulfilled in another Member State constitutes discrimination on grounds of nationality, which is prohibited by the EU Treaties.  Creating a double regulatory burden is contrary to the principle of trust and sincere cooperation between the Member States and thereby violates fundamental EU law.
 
Finally, AG Bot recalls that a monopoly - given its very restrictive nature - can only comply with EU law if it delivers a particularly high level of consumer protection. The ECJ has already established that where monopolies are allowed, these may not trivialise gambling, or give it a positive image, promote the fact that revenues are used for public interest activities or promote major winnings.
 
In this context, it is very doubtful whether these criteria are met in Austria given the massive advertising spending of the Lottery monopoly with Euro 39.37 million for 2010 alone.
 
The AG´s opinion is not binding, but will be considered by the European Court of Justice, together with the written contributions and the oral hearing that took place earlier this year. A date for the ruling has not yet been set.
 
Sigrid Ligné, secretary general of the European Gaming and Betting Association commented on the AG's  opinion this week, saying: “The ECJ is continually refining its jurisprudence, as the recent critical rulings on the German and Austrian gambling legislation show. It provides ammunition to the European Commission to finally refer long-pending infringement cases against the gambling legislation of a series of Member States."
 
Ligné took the opportunity to again push the EGBA view that regulatory harmonisation in the EU is desirable. “The Green paper on online gambling confirms that the Internet provides more sophisticated possibilities to track the transactions of each player compared to off-line gambling formats, [and] it is time to work towards a sustainable solution and introduce EU harmonised rules for online gambling”, she said.

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