Admiral Casinos EU ruling says restrictions need to be constantly justified

Admiral Casinos EU ruling says restrictions need to be constantly justified

Monday, July 11, 2016 Posted by Andy McCarron
EGBA's Maarten Haijer says that the freedom to provide services is one of the cornerstones of the EU internal market

Austria may have to look at its gaming machine regulations again to make sure they comply with European law after a judgement by Court of Justice of the European Union (CJEU).

The issue involves Article 56 of the European Treaty and the freedom to provide services. A jurisdiction is allowed to operate in a restrictive nature (typically a monopoly) as long as it can be proved to be in the interests of the population from a societal perspective – ie a genuine attempt to restrict gambling proliferation.

The Wiener Neustadt Regional Court, Austria, asked for a preliminary ruling from the CJEU an issue brought to it by Admiral Casinos, a company governed by Austrian law and authorised, in the province of Lower Austria, to operate games of chance in the form of lotteries using gaming machines.

Admiral Casinos complained that a number of individuals in Lower Austria are operating the machines after partnering with firms in Czech Republic and Slovakia, despite not having the administrative power.

However those parties have argued that that their activity is lawful as the Federal Law on games of chance and the State monopoly on games of chance are in breach of EU law, in particular Article 56 TFEU concerning the freedom to provide services.

The upshot of the CJEU judgement, which now reverts back to the national court, is that any law restricting free movement of services of gambling under the defence of public policy objectives, must not only be effective in law, but also in practice. In other words, any restrictions need to be effective on an ongoing basis, not just when the law was passed.

The CJEU said: “Article 56 TFEU must be interpreted as meaning that a review of the proportionality of restrictive national legislation in the area of games of chance must be based not only on the objective of that legislation at the time of its adoption, but also on the effects of the legislation, assessed after its adoption.”

Maarten Haijer, Secretary General of European Gaming and Betting Association, has welcomed the judgement. He stated: “The freedom to provide services is one of the cornerstones of the EU internal market. Therefore, it is of crucial importance that a restriction to any of the fundamental freedoms is appropriate and proportionate to the achievement of the stated public policy goal.

“The Court has made it clear that the assessment of whether or not a restrictive law is adequate must not stop after the law has entered into force but must continue as a dynamic process. In addition it should be reminded that the national gambling legislation in a Member State as a whole must be consistent.”

He added: “This is why we acknowledge the importance of this judgement, as it reminds Member States that restrictions to the activities of gambling providers must be in place only and as far as a public policy objective is at serious risk. We hope that this judgement will make some Member States reconsider their gambling policies, and to assess whether they are still relevant by means of periodic ex-post assessments.”

Totally Gaming Says: “The public policy defence of having restrictive gambling legislation has always been a little fluid as the CJEU has fine-tuned what is and isn’t acceptable over the past ten years through a long series of judgements and actions. But the fact that the public policy defence is an active and live development should keep Member States on their toes to make sure that they can continually justify any restrictions or be left open to a challenge in the European courts.”

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