ECJ: EU Countries Have Compliance Obligations

The court singles out Poland and Latvia

Two EU member states received a warning from the European Court of Justice through two separate judgments which should remind them of their obligation to comply with EU laws. Both are of interest for the industry because they're both related to online gambling.

The Polish case arose because the national lawmakers failed to refer the draft legislation on internet gambling to the European Commission, so the ECJ considered whether a law was enforceable when it had not been referred in draft form to the European Commission during the legislative process and under the procedure prescribed by Directive 98/34.

In the end it noted that:

*The provisions at stake 'are capable of constituting ‘technical regulations'…drafts of which must be the subject of communication.'

*It is to the national judiciary to establish 'those provisions that constitute conditions which can significantly influence the nature or the marketing of the product'

* Back in 2010, the European Parliament was alerted of the Polish Gambling Act in respect to issues of compliance with EU law, including the lack of notification; as a result, the EC was questioned by the Petition Committee, which then issued a report in 2011.

As for the Latvian case (C-470/11), in it the court expressed concern regarding the country's restrictions on the freedom of other Member States to provide gambling services, questioning whether such a gambling law is compatible with the European Treaty.

In the case, the ECJ findings were that:

* Such restrictions; 'must be based on objective, non-discriminatory criteria known in advance, in such a way as to circumscribe the exercise by the authorities of their discretion so that it is not used arbitrarily'

* 'It is also necessary for the competent authorities to base each of their decisions on reasoning which is accessible to the public, stating precisely the reasons for which, as the case may be, authorisation has been refused'

* The national courts must ensure that legislation 'genuinely meets the concern to reduce opportunities for gambling and to limit activities in that domain in a consistent and systematic manner.'

* 'It is therefore for the national court to verify, in particular, that the State strictly supervises the activities related to betting and gaming; that the refusal of the local authorities to authorise the opening of new establishments of that type genuinely pursues the declared objective of protecting consumers; and that the criterion of ‘substantial impairment of the interests of the State and of the residents of the administrative area concerned' is applied without discrimination.'

It has been stated by Sigrid Ligné, secretary general of the internet gambling trade group European Gaming and Betting Association, that the ECJ has once again confirmed that Member States are required to refer draft gambling legislation to the EC.

"If they fail to do so, the legislation can´t be enforced against operators. Likewise, we are satisfied that the Court firmly recalls that restrictions to the market can only be justifiable subject to strict conditions,' he said, adding: 'What is worrying is that these are well known and longstanding requirements that Member States should, but many do not comply with. As recently confirmed by Commissioner Barnier, Member States' compliance with European rules is essential.

"The Commission has acknowledged that in addition to the 9 pending infringement procedures, 28 complaints against 12 Member States will now be investigated. We are confident that the Commission will take appropriate legal action.'

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