The case law of the CJEU in the gambling sector

1. European Economic and Social Committee Hearing 6th September 2011 "On-line gambling - After the Green Paper which way forward?“by Philippe Vlaemminck The case law of the CJEU in the gambling sector

2. Policy choices Establishment & Licensing Advertising Technology Philippe Vlaemminck - 2011 Overview

3. Policy choices: type of structure • MS decides about type of games, volume and number of operators notwithstanding choices of other MS: • Prohibition ( if effective) • Monopolistic approach • Concession model • Mixed model • Basic rule is developing a consistent policy whereby more dangerous games are not less strictly regulated ( or even tolerated) ( internal consistency) • MS need also to respect choices of other MS and avoid that their policy harms other MS ( external consistency)

4. Philippe Vlaemminck - 2011 Policy choices: The principle of mutual recognition is not to be applied in the gambling sector • In the current status of EU law, the EU Member States are allowed to prohibit or restrict market access for foreign operators, who claim they can provide their games within the territory of the Member State based on the license they have obtained in their country of origin. • Therefore, a Member State can impose a national authorisation upon an operator who wants to provide his games within its territory, and can refuse/grant such an authorisation according to its own policy. • Logic consequence of previous case law • Cases such as Webb and CanalSatellitewhereby it was established that Member States also have a duty to take full account of the requirements already fulfilled in the Member State of establishment, insofar as they safeguard the same objectives pursued by the receiving State are not applicable to the gambling sector.

5. Philippe Vlaemminck - 2011 Establishing and licensing • In a single licensing system • the obligation of transparency does not apply regarding the grant or renewal of such license if it involve a public operator whose management is subject to direct state supervision or a private operator whose activities are subject to strict control by the public authorities • In a multiple licensing system • the obligation of transparency must be complied with. In such a system, the authorities must ensure a degree of publicity sufficient to enable the service concession to be opened up to competition and the impartiality of the award procedure to be reviewed.

6. Philippe Vlaemminck - 2011 Establishing and licensing(I) • Licensing conditions need to be non-discriminatory and proportionate: • No categorical exclusion of foreign ( EEA based) operators from the award procedure • No exclusion of companies quoted on the regulated markets in EEA. • No criminal sanctions can be imposed if the Member States have maintained disproportionate licensing conditions, in breach with EU law

7. Philippe Vlaemminck - 2011 Establishing and licensing (II) • Restrictive conditions which may be justified: • Requiring operators to adopt a particular legal form as a condition to participate. The obligations binding public limited companies, in particular, with regard to their international organisation, the keeping of their accounts, etc. • Requiring on line operators to have their social seat on the territory where they offer their games to consumers ( AG opinion) • A limitation of the number of concessions ( insofar as objectively defined) • The grant of a concession for a duration of up to 15 years (having regard to the concessionaire’s need to have a sufficient length of time to recoup investments required by setting up a gaming establishment.)

8. Advertising & controlled expansion • A policy of controlled expansion may be entirely consistent with the objective of drawing players away from clandestine betting and gaming to activities which are authorized and regulated. • In order to achieve that objective, authorized operators: • Must represent a reliable, but at the same time attractive, alternative to a prohibited activity. • This may as such necessitate: • the offer of an extensive range of games, • advertising on a certain scale, • and the use of new distribution techniques. • This rule applies when a MS pursues a policy of defending public order as well as when a MS pursues a policy of consumer protection ( insofar as there is an important illegal offer)

9. Advertising & monopolies • Advertising by monopolistic operator must remain measured and strictly limited to what is necessary to channel consumer to authorized operator. • it requires a proper legal framework: • A measure as restrictive as a monopoly, in order to ensure a particularly high level of consumer protection, must be accompanied by a legislative framework suitable to pursue the public interest objectives in a consistent and coherent manner. • Supply needs to be quantitatively measured and qualitatively planned.

10. Advertising & good causes allocation • Advertising within a restrictive regime is not consistent if it aims to encourage consumer’s natural propensity to gamble by stimulating their active participation in it: • Giving games positive image due to fact that revenues are used for activities in public interest (good causes) • Depicting major winnings

11. Technology & case law • The use of technology is strongly connected to the principles developed through the case law ( no mutual recognition, AML & establishment, protection of consumers & public order, legal framework) • Currently several MS are defining specific policies adapted to these principles , but the notification process was not providing any benefit for resolving any problem in a constructive manner • There is clearly a need for further study and knowledge of EU Commission in this area ( server location, white labels, e-ID, IP & payment blocking,…).

12. Philippe Vlaemminck - 2011 Thank you for your attention! ALTIUS Law firm cvba Philippe Vlaemminck EU& Trade law Tour & Taxis Building Avenue du Port 86C box 414 1000 Brussels - Belgium Tel: 02.426.14.14 Fax: 02.426.20.30 www.altius.com