Favourable European Court of Justice Ruling
Regulated gambling markets have an obligation to ensure full transparency, legal certainty and equal treatment.
The European Court of Justice has again ruled that national regulators must not discriminate against foreign companies trying to enter their markets from other EU nations, warning that it is against EU law for national legislation to seek to protect the market position of incumbents.
In an important preliminary ruling Thursday in the joint cases Costa and Cifone on access to Italian gambling licenses by European operators, the court confirmed that Member States of the EU cannot protect vested economic interests and thereby discriminate against new operators under the guise of consumer protection or fraud prevention.
In particular, the Court ruled that a national restriction is justifiable only if it does “not have as a true objective the protection of the market positions of the existing operators”.
“The very fact that existing operators have been able to start up several years earlier than the operators unlawfully excluded confers on them an unfair competitive advantage [which] constitutes a new breach of Articles 43 EC and 49 EC and of the principle of equal treatment,” the court found.
“The objective of ensuring continuity, financial stability or a proper return on past investments for operators cannot be accepted as overriding reasons in the public interest” it added, also noting that in cases where nations justify restrictions on grounds of reducing gaming opportunities and combating criminality this cannot stand where the Member States “has long been marked by a policy of expanding activity with the aim of increasing tax revenue.”
In a blow for Italian regulators, the court found that the Italian gambling legislation, in the manner in which it regulates the gambling market, is not consistent with the claimed objectives of protecting consumers from gambling addiction and limiting gambling activity in Italy.
The court pointed out that the aim of the Italian legislation is to protect incumbents and increase tax revenues. Such objectives cannot serve to justify violations of EU law.
Sigrid Ligné, Secretary General of the European Gaming and Betting Association commented on today’s ruling: “This very positive ruling confirms that national legislation that opens up and regulates the gambling market may not discriminate against new operators but must guarantee fair market access.
“The Court has made particularly clear the ‘red lines’ that Member States must observe when they regulate gambling; it is high time for the European Commission to enforce the consistent case law of the CJEU and pursue complaints and infringements procedures accordingly ”
Executives at Stanleybet were jubilant over the ruling, which the company claims recognises for the third time that Stanleybet was discriminated against by the Italian licensing system.
David Purvis, CEO of Stanleybet, said: “Stanleybet has received from the CJEU a definitive recognition of its right to enter the Italian market under conditions of equality and fairness vis-a-vis the other national operators.
“This ruling confirms once again that Stanleybet was discriminated against by the Italian Republic. After twelve years of legal battles, this third CJEU ruling must surely put an end to the unlawful distortions, the discrimination and the unjust limitations of the Italian licensing system.”
“The European Commission must also take heed from this following its 2010 decision to close the Italian infringement proceedings. The decision of the CJEU indicates that this closure was premature. I hope this is a lesson to be learned and from now on the Commission will not allow political considerations to overtake EU law in other jurisdictions such as France, Greece and Germany”, David Purvis concluded.
