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Ban and exclusive right/monopoly of gambling in EU

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Ban on games of chance

The Schindler judgment remains the only decision where the CJEU ruled on a national (UK) general ban on a certain category of games of chance – the organisation of lotteries (subject to very limited exceptions). The Court decided that under the circumstances in question, the national legislation amounted to an obstacle to the freedom to provide services, but was not incompatible with the Treaty in view of the concerns of social policy and the prevention of fraud which justify it.

The conclusion was based on a number of considerations, in particular the moral, religious and cultural aspects of lotteries, the high risk of crime or fraud that lotteries involve and the incitement to spend which may have damaging individual and social consequences. In addition, the general ban on lotteries could not be considered to be discriminatory based on the nationality of the operators.

National legislation on gambling may also contain bans on the organisation and promotion of games of change through certain channels, in particular via the Internet. In Sporting Exchange and Ladbrokes Betting & Gaming and Ladbrokes International, the Court decided that in the light of the specific features associated with the provision of games of chance via the Internet, a total ban may be regarded as justified by the objectives of combating fraud and crime.

Exclusive right/monopoly

Most of the case-law on gambling of both the CJEU and of the EFTA Court deals with national legislation which:

• creates a public entity which enjoys an exclusive right to offer certain games of chance and which does not itself operate such services but instead manages a network of “concessions”, i.e. natural or legal persons which are allowed by an act of the competent administration to operate on the market on behalf of the public entity holding the exclusive right (The (previous) Italian system, in particular subject to the judgments in the cases Zenatti, Gambelli and Placanica);

• establishes an exclusive right/legal monopoly for a public or State-controlled operator directly by law, (E.g. EFTA Court in Case Gambing machines; CJEU in Läärä and Dickinger and Ömer.) or • limits the organisation and promotion of games of chance to one public or private operator through the grant of a single licence (E.g. Sporting Exchange, Stoß and Others, Zeturf).

The courts have developed a number of specific requirements which should be met by national regimes of exclusive rights/monopolies in order to be considered proportionate under the free movement principles. These include the need for a strict state control (chapter 5.6.2.1); the need for a particular high level of protection of consumer protection (chapter 5.6.2.2) and the need for a detailed analysis of the consistency of the national gambling policy, in particular as to the commercial strategy of the holder of the exclusive licence/monopoly and as to the overall national policy pursued in the field of games of chance (chapters 5.6.2.3-5.6.2.5).

Credit © European Union

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