An influential view on monopolies and discriminatory advertising bans in EU nations
The online gambling industry can take heart from two recent EU legal opinions that show that the Advocates General at the European Court of Justice maintain an impartial approach in giving legal opinions.
This week Advocate General Mazák released an opinion in which he questioned online gambling market restrictions in Austria.
The AG was commenting on the legality in European law of the de facto monopoly exercised by Casinos Austria. The comments arise from the case of Ernst Engelmann (C-64/08) currently before the European Court of Justice.
AG Mazák opined that the requirement that a gambling company have an establishment in Austria “...is a clear example of direct discrimination against companies who are seated in another member state”.
The AG observed: “Contrary to the view of the Austrian government, [...] controls can be enforced on any company established in a [EU] member state and in addition, sanctions can be applied irrespective of the place of residence of its management”.
He also commented that licenses in the gaming sector must be awarded in a public and transparent manner, saying: “Article 43 EC and 49 EC preclude national provisions […] which exclude from the tendering process candidates from the [European] Community which do not have the nationality of that member state”.
The national court has to determine whether fiscal objectives of the legislation in fact only constitute “an incidental beneficial consequence”, Advocate General Mazák observed. Should this not be the case, the monopoly regime is in violation of EU law, he asserted...regardless of the level of advertising [by the monopoly]
Turning to the question of the degree of advertising undertaken by state monopolies and whether this proves or disproves the extent to which such states are concerned over the welfare of citizens, the AG recommended that the courts in EU nations must further examine whether the advertising in question merely informs the potential gambler of the availability of gambling products, or whether the promotional activities actually and actively encourage gamblers to participate in games of chance.
The European Gaming and Betting Association, a trade association that includes most of Europe's major online gambling companies among its members, welcomed the AG's thoughts, saying that his opinion, if subsequently confirmed by a European Court of Justice ruling, would signal the end of Casinos Austria’s de facto monopoly on poker and casino games, and lead to important and necessary reforms in that country.
"Austria has clear profit-driven objectives when it comes to gaming and betting, with no consistent or systematic consumer protection policy," the Association said in a statement.
"The Austrian market has been continuously expanding with massive monopolists’ advertising expenditure. 77 percent of the shares of Casinos Austria are held by private shareholders, including banks and insurance companies."
Sigrid Ligné, Secretary General of the EGBA said: “In this context, there is no acceptable justification to prevent reputable European competitors from offering online poker and casino games to Austrian players”.
In cases C-447/08 and C- 448/08, in which advertising was also a factor, Advocate General Bot confirmed in joint Swedish newspapers cases that EU Member States must not discriminate against EU operators.
Two Swedish newspapers, "Expressen" and "Aftonbladet" brought their cases to the ECJ after the editors were exposed to criminal sanctions by Swedish government officials for accepting gambling advertisements from non-Swedish online gaming and betting operators duly licensed in other Member States.
In his opinion, Advocate General Bot concluded that:
“While a member state is entitled to restrict activities associated with gambling within its territory, the measures which it adopts for that purpose must not be discriminatory, even if they are based on the defence of public order”.
”[European] Community law precludes national legislation under which […] anyone who promotes participation in internet gaming organised by a company established in another member state is liable to criminal penalties, whereas anyone who promotes participation in such gaming organised within the national territory without an authorisation does not incur such penalties.”
This confirmation by AG Bot that Sweden must not apply discriminatory sanctions towards licensed EU operators was also welcomed by EGBA.
Secretary General Ligné commented: “It is remarkable that leading national newspapers, which are financed through and very much dependent on the sale of advertising, are unfairly deprived of substantial sources of revenue.
“The marketing prohibition that applies to legal EU operators in Swedish media does not have any impact on the overall level of consumption of games of chance in Sweden. Svenska Spel and ATG conduct heavy advertising campaigns throughout the territory and Swedish consumers also receive advertising from other Member States on television”.
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