The Swedish Gam bling Monopoly in
Perspect ive of EC- law
Master Thesis for t he Masters of Law program
(Tilläm pade studier, 20 poäng)
Department of Law
School of Econom ics and Com m ercial Law
Gothenburg University, Decem ber 2005
Aut hor
Bobi Mitroviû
Supervisor
Thom as Erhag
Som e people refer to it as “gam ing”; ot hers refer to it as
“gam bling”. The m ere fact of what you call it, could reveal your
standpoint and it rem inds m e of the philosophical t hesis
whether t he glass is half full, or half em pty. The truth lies in
the eyes of the beholder.
Abst ract
The European Com m unit y is based upon t he principle of free m ovem ent of the four
freedom s, and aim s to create one int ernal in which m easures of harm onization are
ut ilized. Thus, principally, a m onopoly as t he Swedish gam bling m onopoly is
contrary to t his objective. Nonet heless, the Treat y on t he European Union provides
derogations based on public policy, public securit y and public health. Gam bling has,
so far, not been t he object of any harm onization initiative wit hin the European
Union.
In brief , t he rulings of t he European Court of Justice have shown t hat t he national
m onopolies are indeed infringing on European Law, and it was not until in Schindler
these argum ents were developed f or t he first tim e in connection wit h gam bling
services. However, no violation will be established if a restrictive legislation can be
justified by objectives of social policy and consum er protection aim ed at lim iting t he
harm ful effects of gam bling activities, and if t he restrictions are non- discrim inatory
and proportionat e to t hese objectives. Moreover, according to Gam belli , the raising
of m oney for good causes cannot in itself justify a restrictive policy. The case also
pointed out t hat t he national gam bling rest rict ions are only acceptable according t o
the Treaty if they reflect a concern to bring about a genuine dim inution in gam bling
opportunities and if the financing of good causes, or of the stat e, constitutes an
incidental beneficial consequence. The Mem ber Stat es have so far enjoyed a large
discretionary power in regulating gam bling, but the discretionary power is not
lim ited by t he f act that other Mem ber St at es have regulated gam es of chance in a
m ore liberal way. Since it is for t he nat ional court to det erm ine whet her t he
legislation serves the aim s which m ight justify it and if it is proport ional, different
national courts have been m aking different interpretations.
Many gam bling m onopolies t oday act m ore like a privat e business rather than a
com pany wit h a public health m andat e. In order t o avoid risking dissolution of
m onopolistic structures, the state aut horized com panies m ay have t o m odify or
perhaps wit hdraw from certain areas, products or m arket ing cam paigns. In t he light
of recent cases in nat ional courts of Holland and Germ any, it appears that a state
which actively seeks to stim ulat e dem and for gam bling products, either through the
developm ent of new gam bling gam es; the opening up of new channels of
dist ribution; or the roll out of aggressive m arket ing cam paigns, could have som e
difficulty justif ying its national gam bling rest rictions. The Swedish gam bling
m onopoly has, so far by the Swedish Courts, not been seen as one of t hose; however
there are strong indicat ions pointing towards the opposite.
The focus has increasingly ended up on legal interpretat ions around t he possibilities
of , and t he obstacles for, stat e regulation and has recently placed Nordic gam bling
m onopolies under scrut iny. Most of t he Nordic countries are under pressure as
private operators have inst igated objections against t he state m onopolies in several
jurisdictions.
Table of Contents
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2.3.2 Pr inciple of Pr oport ionalit y ....................................................................................... 12
&RPSHWLWLRQ/DZDQG6WDWH0RQRSROLHV )UHH0RYHPHQWRI6HUYLFHV )UHHGRPRI(VWDEOLVKPHQW 2.6.1 Except ions ...................................................................................................................... 15
2.6.2 Pr inciple of Overr iding Reasons of General I nt er est ...................................... 16
3URSRVDORI6HUYLFH'LUHFWLYH 'LUHFWLYHRQ(&RPPHUFH (XURSHDQ&DVH/DZRQ*DPEOLQJ 2.9.1 Schindler ......................................................................................................................... 19
2.9.2 Läärä ................................................................................................................................ 21
2.9.3 Zenat t i ............................................................................................................................. 22
2.9.4 Anom ar ............................................................................................................................ 23
2.9.5 Gam belli .......................................................................................................................... 24
2.9.6 Opinion of Adv ocat e General Siegbert Alber .................................................... 26
2.9.7 Lindm an .......................................................................................................................... 27
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6ZHGLVK*DPEOLQJ0RQRSRO\XQGHU6FUXWLQ\ 6ZHGLVK&DVH/DZRQ*DPEOLQJ 3.5.1 Case 5819- 01 ............................................................................................................... 35
3.5.2 Case 7119- 01 ............................................................................................................... 37
3.5.3 Case 3841- 04 ............................................................................................................... 37
3.5.4 Case Ö 4474- 04 ........................................................................................................... 38
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&RPSDQLHVYWKH6WDWH 3.6.1 Mark et Act iv it ies .......................................................................................................... 38
3.6.2 New Pr oduct s ................................................................................................................ 41
3.6.3 Legislat iv e Measures .................................................................................................. 42
&+$37(5,9 $1$/<6,6 $SSOLFDELOLW\RIDQ$FWLYLW\ZLWK(&ODZ 4.1.1 Does t he Regulat ion Concer ned Relat e t o an Econom ic Act iv it y? ............ 45
4.1.2 Does t he Econom ic Act ivit y Relat e t o t he Free Prov ision of Serv ices or
Goods? ........................................................................................................................................... 46
4.1.3 I f t her e is a Rest r ict ion in Place, is it Discrim inat ing?................................... 47
4.1.4 I s t he Rest r ict ion Just ified? ..................................................................................... 47
4.1.5 I s t he Rest r ict ion Necessary and Pr oport ionat e? ............................................ 48
(XURSHDQ&DVH/DZ &ODULI\LQJ*DPEHOOL 4.3.1 Guidelines Narr ow ing t he Scope of I nt erpr et at ion ......................................... 51
4.3.2 A slight Shift in t he Bur den of Proof .................................................................... 53
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35(9(17,1*$/&2+2/$1'1$5&27,&6 Chapter I – Introduction
CHAPTER I
Int roduct ion
1.1 Background
Internet gam bling com panies are, to t his date, a sm all group of com panies that have
m anaged t o sustain profitable beyond t he so called “Int ernet bubble”. Not m any
years ago, investors were t hrowing m oney at “dot.com com panies” t hat were not hing
m ore than a business plan predict ing future prof its in correlation with t he projected
increased Int ernet access throughout t he world. The ever- ex panding accessibility of
the Int ernet has led to increasing opportunities for gam bling and, in part icular,
cross- border gam bling. This growt h continues wit h lim it ed, if any, support from
m any governm ents t hroughout t he world in the form of effective regulatory
schem es. In m ost of t he European jurisdictions, gam bling is st rict ly controlled by the
national governm ents. National gam bling m onopolies ex ist in several countries. This
m eans that the sam e hand supplying gam bling is regulating it. At t he sam e tim e t he
m onopolistic struct ure of gam bling is being questioned, bot h on t he national and
internat ional arena, due to an increased pressure of general deregulat ion and
harm onization within the European Union.
In Sweden, ATG and Svenska Spel AB, has a concession 1 to provide gam bling services
according t o t he Lott eries Act. As a result, they can dict ate price, supply and all
ot her relevant conditions concerning t heir off er. Moreover, t here is a lot of m oney t o
be m ade wit hout com petition, approx im at ely
75 billions in annual t urnover in
Europe2 , even t hough t his industry, for t he f irst tim e in years, is facing decreased
growt h. Further, it has been not ed that Internet poker has increased 600 percent
during the period Novem ber, 2003 to Novem ber, 2004. 3
1
This perm ission is given by t he Swedish governm ent according t o t he Lott ery Act .
2
Ayolt Z., (2005).
3
2005/ 06:KrU3.
7
Chapter I – Introduction
One of the European Union’s m ain objectives is to create one int ernal m arket. On
one hand, the state owned com panies, or the Mem ber Stat es to be precise, do not
want one European m arket in this aspect. On the other hand, gam bling com panies
such as Ladbrok es, Unibet, Betfair et c want s a piece of t he billion Euro m arket.
Mem ber stat es argue t hat gam bling m ust be state controlled in order to secure the
protection of general interests, such as, public policy, public securit y and public
healt h. Gam bling com panies argue t hat t he Mem ber St ates are benef it ing their
public purses and t hat gam bling com panies could shield m any of t he general
interests asserted by the Mem ber Stat es. Actually, in com parison to alcohol for
ex am ple, t here are far m ore countries that have som e kind of regulat ed gam bling
m arket with t he stated purpose of prot ecting citizens from harm , restricting crim inal
behaviour and for the purpose of f inancially benefiting public interest.
The focus has increasingly ended up on legal interpretat ions around t he possibilities
of , and t he obstacles for, stat e regulation and has recently placed Nordic gam bling
m onopolies under scrut iny. Most of t he Nordic countries are under pressure as
private operators have inst igated objections against t he state m onopolies in several
jurisdictions.
The European Union has addressed the need for legislative action to avoid fut ure
dist ort ions of the internal m arket by initiating t he so called “Report on gam bling”
(planned publishing Novem ber 2005), reviewing the E- com m erce Direct ive for the
second tim e as well as debating the proposal for a Services Directive in the European
Parliam ent (January, 2006). Any subsequent legislative proposal in this field will
be the result of a com plex debate bet ween the diverging int erest s of the European
Union, national m onopolies and private operat ors; the balance between t he defence
and prom otion of the freedom to provide services in the internal m arket, the loss
of revenues or jobs in the industry and t he need to com bat fraud and m oney
laundering, prevent gam bling addiction and prot ect consum ers.
1.2 Purpose and Questions of Research
This paper, intends to discuss the European Com m unit y regulations t hat concern t he
Swedish gam bling m onopoly. Most im port ant aspects of the Treaty are t he freedom
to provide services and t he freedom of establishm ent. The objective wit h this paper
is to answer following questions:
1. What is t he law in f orce concerning gam bling m onopolies wit hin the
European Com m unity and Sweden respect ively?
2. Is the Swedish m onopoly in breach of any provision(s) of the Treaty?
a) If affirm ative, can it/ t hey be justif ied?
3. Under what circum stances could the m onopoly cont inue t o ex ist?
4. What circum stances could underm ine t he m onopoly?
8
Chapter I – Introduction
1.3 Delimitations
I have delim ited t his paper to apply law in force on t he Swedish gam bling m onopoly.
I will not enter deeply into the Mem ber States’ national regulations or int o t he
regulatory discrepancies between t hem wit hin the European Com m unity, ex cept for
when it is necessary in order to understand a case or an argum entation et cetera. The
purpose is not to elaborate ot her Mem ber Stat es’ law in force. However, by looking
at the oddity am ong t he Mem ber States’ regulations, one can enlighten and
understand the case law within t he European Com m unity. A relevant question, m ore
of a form al nat ure, is when a national Court should be obliged to refer a m atter t o
the European Court of Justice, but it will briefly be addressed. For purpose of t his
paper, t he questions set forth in t his report will be ex am ined t hrough the
supranational approach, which m eans that the Swedish gam bling m onopoly is
im posed EC- law, and could very likely be considered in breach of the sam e. The
opposite approach, the interstat e approach regards t he Mem ber St at es as the
m asters of the Treaty, whereby the quest ions set forth in t his report would not even
be an issue.
1.4 Method
In order to answer t he proposed questions, I have studied t he Treaty, Directives and
proposals of t he sam e, Com m ission reports as well as ot her sources from the
European Com m unity. Additionally, since t he regulatory fram ework has proven
insuf ficient , t he European Court of Justice has som e case law in this question. In
conjunction to t his, national European case law has been ex am ined too. Most of the
facts of com pany nature have been acquired f rom public docum ent ations and
appreciat ions, since som e of t he m ost interesting facts, very lit tle surprising, are
confidential.
1.5 Disposition
This paper is predisposed as f ollows. Chapt er II ex plains the European f ram ework
and it s purpose is to elucidate the law in force within Europe. This will be conducted
by ex am ining the Directives and proposals of Services and E- com m erce. In addition,
the European case law will thoroughly be ex am ined. Chapt er III addresses the
Swedish fram ework and const itut es the background for t he questions of research. In
Chapter IV an analysis is m ade whet her t he Swedish gam bling m onopoly is in
conjunction wit h, or in breach of, the Treat y on t he European Union/ Com m unity. In
this last chapter, the questions set forth in this report will be answered as well.
9
Chapter II – European fram ework
CHAPTER II
European Fram ework
2.1 Background
Already in t he early 1990s, the European Com m ission (hereinaf ter t he Com m ission)
dem onstrated a certain int erest in t he “gam bling sect or” since its substantial
econom ic im portance and pot ential. 4 The Mem ber States were of t he opinion t hat t he
regulation of casino gam es, lotteries and ot her types of gam es was an ex clusive
Mem ber Stat e’ s m att er. When the Com m ission, in 1992, first addressed a European
gam bling regulation it underlined that a legislative initiative could not be ex cluded,
even if it was not required. Given t he fact t hat t echnological developm ents open up
m arkets worldwide and the Com m unity becom es ever m ore closely int egrated, it
could not be precluded t hat t he Com m ission will have to reconsider its position in
view of new and as yet unforeseeable trends. 5 The wording “unforeseeable trends”
aim s at the inform ation society, m ost m anifest ly dem onst rated by the growth of the
Internet , a society, as we all know, without geographical frontiers.
In the view of m ost governm ental regulators, online gam bling is probably the wild
wild west of the gam bling world. Online or Internet gam bling is largely unregulated,
and in fact illegal in m any countries. There are basically t hree distinct regulatory
schem es for Internet gam bling. 6 The first schem e, practised by countries lik e the
United States and Switzerland, is to outlaw Int ernet gam bling, because Internet
gam bling underm ines gam bling policies, m ay com pete with stat e lott eries, and
cannot be easily tax ed. 7 Other countries, like Great Britain and Australia have taken a
different approach by ex pressly authorizing gam bling, controlling it, and t ax ing it.8
4
5
6
IP (91)904.
IP (92)1120.
See Fridolin W., (2000).
7
Ibid.
8
Ibid.
10
Chapter II – European fram ework
Under a t hird type of approach, m any European count ries t hrow m oralistic concerns
to t he wind by running their own gam bling concessions. Gam bling is a good
ex am ple of how different the point of attacks can be bet ween countries.
Since March 7, 2001, Great Britain has essent ially been t he pioneer of the global
gam bling industry. The m ove was to dum p the t ax on sports betting in ex change f or
a pledge by its fam ed book m akers to shut down t heir offshore Int ernet operations
and reopen t hem at hom e. The change of the t ax code m ade Britain t he first world
power to em brace Internet gam bling. 9
2.2 The Core of the European Comm unity
The European Union (hereinaft er t he EU) was founded to avoid fut ure sim ilar
incidents t o t he world wars, and by polit ical and econom ical unification, t he EU seeks
to attain long and prosperous peace. Sweden becam e a m em ber of t he EU January 1,
1995 and has ever since been resigned to EC- law 10 . The European Union em braces
m ore t han t he econom ical field but in t his regard, by looking at gam bling as an
activity, it m ust be considered t o have an econom ical im pact in order to be aff ected
by the Treat y. Hence, the question if the activity is econom ical will t herefore be t he
first step in t he analysis of t his paper, see sect ion 4.1.1 Does t he Regulation
Concerned Relat e t o an Econom ic Activit y.
Fundam ental t o t he European Com m unity (hereinaf ter the EC) is t o have one internal
m arket whereas goods, persons, services and capital can m ove freely across the
national borders wit hin t he EC. All obst acles to com petition, est ablishm ent,
providing and receiving t he freedom s, are aim ed t o be overcom e. However, wherever
there are m ain rules, t here are ex cept ions as well. In t his chapter, I will em phasize
on t he European case law since it is the single m ost im portant source of law
regarding gam bling.
2.3 Legal Principles
There are som e f undam ental legal principles wit hin t he EC- law, t o which the
European Court of Justice often ref ers. As t he Treaty has m any loopholes, these
principles constit ut e a very im portant tool in t he int erpretation. In order t o
understand t he case law later in this chapter, the basic and m ost relevant legal
principles will be outlined. The general legal principles that derive f rom the Treaty
are t he principles of legality, loyalty, non discrim ination equality, subsidiarit y and
proportionality. Principle derived by case law is t he principle of overriding reasons;
see section 2.6.2 Principle of Overriding Reasons of General Int erest.
9
Brunker, M., (2004).
10
The four freedom s (free m ovem ent of goods, persons, services and capit al or som et im es even five
when referring t o t he freedom of est ablishm ent ) derive from t he EC- Treat y. The EC- Treaty derives from
EEC (European Econom ic Com m unit y), ECSC (European Coal and St eel Comm unit y) and Eurat om (Treat y on
at om energy). The Union st ruct ure fashioned at Maast richt is built on t hree pillars whereas t he European
Com m unit ies are one of t hose t hree. The ot her t wo are: CFSP (Comm on Foreign and Securit y Policy) and
JHA (Cooperat ion in t he Fields of Just ice and Hom e Affairs).
11
Chapter II – European fram ework
2.3.1Principle of Non Discrim ination
The principle of non discrim ination im plies t hat every att em pt to discrim inat e based
on nat ionality is prohibit ed and it is ex pressed in article 12 of the Treat y. It states
that natural and legal person of a Mem ber Stat e shall be t reated as resident s and
com panies in ot her Mem ber Stat es. ECJ has several tim es stated t he Treat y not only
to prohibit direct (open) discrim ination, but also indirect (hidden) discrim ination and
the latt er can be m anifested t hrough illusionary regulations not targeting at
nationality, but f or instance unjustified requirem ent s of settlem ent or language.
Therefore, this is one of the cornerstones of the EC striving f or an int ernal m arket
which is based upon an open m arket econom y wit h free com petition. The
discrim inat ing effect of an indirect discrim ination can however be considered as a
m erely accidental occurrence if t he negative eff ect is objective in proportion to its
aim and based on other t han t he nat ionality of the effected econom ical activity. 11
2.3.2Principle of Proportionalit y
This principle is elucidat ed in art icle 5.3 of the Treaty whereas “(A)ny action by t he
Comm unity shall not go beyond what is necessary to achieve t he objectives of this
Treaty. ” It m eans t hat actions taken by EC institut ions, to achieve a certain objective,
are not t o be m ore burdensom e or far- reaching than necessary for achieving the
object ive. 1 2 In t he event of choosing from several actions striving to achieve an
object ive, t he least burdensom e should be chosen. 13 The principle ex presses a
balance bet ween m eans and object ives, and ECJ often refers to the phrase
“appropriat e and necessary”.
Actions prohibiting gam bling services m ust be considered proportional in order for
the Mem ber St at es to continue t o keep t heir trade barriers. However, t here is som e
uncertainty regarding what t he principle really constit ut es of and how it should be
conducted. In som e cases, t he ECJ have chosen to conduct a m ore lim it ed
proportionality test t han in ot her cases. The criterions have varied between one and
three, and between an alternat ive and cum ulative form ulation 1 4 , but have been
considered to be of litt le practical signif icance since the Court usually m akes a
collected assessm ent and very seldom on the very single criterions. 15
An ex tensive t est, however, com prises of three questions16 : (1) Is t he action suitable
or appropriat e to achieve the objective it pursues? This question pertains to causality
by which t here has to be a connection between the m eans and t he ends. (2) Is the
action necessary in order to achieve t he object ive? The objective of t he m easure
m ust not be capable of being achieved by alternative m eans that are less restrictive.
11
Bernit z, U. and Kjellgren A. (2002), p. 229.
12
Snell, J. (2002), p. 200 and de Burka, G. and Craig, P. (2003), p. 816 and Bernit z, U. (2002), p. 115.
13
Ibid.
14
Eriksson, I. O. (2003), p. 587.
15
Hett ne, J. and Eriksson I. O. (2005), p. 156, and Meyrowit ch, A., Allrot h, E. and Het t ne, J. (2005) p. 56-
57.
16
Hett ne, J. and Eriksson I. O. (2005) p. 155 and Snell, J. (2002), p. 196, 198 and 200.
12
Chapter II – European fram ework
(3) Is t he act ion in reasonable proportion t o the objective? This question targets the
Court to conduct a cost- benefit analysis of t he regulation by weighting the national
interest against the Com m unit y interest of free trade.
2.4 Competition Law and State Monopolies
The provisions of com petition are applicable to gam bling m onopolies. Article 81
prohibits lim itations of com pet itive m easures while article 82 prohibits abuse of
dom inant position. Furt her, article 86.1 prohibits Mem ber Stat es from enacting or
m aintaining any m easures in force, contrary to the provisions in t he Treaty, in the
case of public undert akings and undertakings to which Mem ber Stat es have grant ed
special or ex clusive rights. The activit y in question m ust be of an econom ic nature
and any public body carrying on an econom ic activity is considered as an
undert aking. 17 The borderline bet ween econom ic and non- econom ic act ivities is
som et im es difficult t o draw in the public sector, as activities, such as health, social
security and education have a diffuse st atus. However, gam bling activities are clearly
of an econom ic nat ure. 1 8 ECJ has established that a m onopoly can be incoherent wit h
EC- law 1 9 since it is not im plied t hat all rights are coherent with EC- law, as art icle
86.1 depend upon provisions it is referring to. 20 The m ere grant of ex clusive rights is
norm ally not considered in quarrel wit h the Treaty, unless it is construct ed in a way
unable to avoid breaching art icle 86 through t he pract ise of the m onopoly, f or
ex am ple by abusing its dom inat ing position. 21 Nevertheless, an ex ception is given, in
article 86.2, to m onopoly undertakings running operat ion of services of general
interest or to t hose which have t he character of a revenue- producing monopoly, as
these are considered entrusted with a particular task im portant enough t o
safeguard. These are im posed the provisions of com petition, but only to an ex tent
where t he provisions do not rest rain t hem from com pleting t heir assigned task.
Gam bling com panies are considered as revenue- producing undertakings and it is
im plied t hat t he undertakings take advantage of their special or ex clusive rights t o
provide incom e to t he st ate. 22 However, the developm ent of trade cannot under any
circum stances be affect ed contrary t o the interest of the EC. Hence, the m ain
question is whet her t he developm ent of trade is affected t hrough t he freedom to
provide services and the freedom of establishm ent, which constitute t he
developm ent of trade.
2.5 Free Movement of Services
One of t he basic freedom s is declared in article 49 - t he f reedom to provide
services. The article states that “(W)it hin t he f ramework of t he provisions set out
below, restrictions on freedom to provide services within t he Comm unit y shall be
17
Korah, V. (2000), p. 149.
18
Faull, J. and Nikpay, A. (1999), p. 279- 280.
19
C- 393/ 92, Almelo and C- 320/ 91, Corbeau .
20
C- 202/ 88, France/ Commission .
21
SOU 2000:50 p. 130.
22
Allgård. O. and Norberg S. (2004), p. 292, especially foot not e 87.
13
Chapter II – European fram ework
prohibit ed in respect of nat ionals of Mem ber Stat es who are established in a St ate of
the Com m unity other t han t hat of t he person for whom t he services are int ended”.
Not only is any discrim ination on grounds of nationality prohibited, but also any
restriction on, or obstacle to, the f reedom to provide services, even if they apply
without distinction t o nat ional providers of services and to those est ablished in ot her
Mem ber States. 23
Restrictions are only allowed to be im posed and m aintained by Mem ber States,
provided t hat no distinctions are m ade on grounds of nationality or residence, if
they can be justif ied by ex em ptions provided by EC- law. The prohibition is relating
to direct and indirect discrim inat ion of foreign services provided on t he concerned
national m arkets, but can also enact t o t he adoption of non- discrim inatory rules t o
foreign services. 2 4 Further, article 49 also im pedes restrictions im posed a provider of
services established in anot her Mem ber State where he is aut horized to provide that
service. 2 5
In article 50 the definition of a service is given. “Services shall be considered t o be
services within the m eaning of this Treaty where they are norm ally provided for
remuneration, insof ar as they are not governed by the provisions relating t o freedom
of movement for goods, capit al and persons.” This ex plains why the ECJ always
inquires if t he question concerns t he m ovem ent for goods, capital or persons, before
it can conclude t he activity as a service.
In Schindler 2 6 , t he Court concluded lottery activities to fall within t he scope of
services and not goods. 27 This distinction constitut es the second st ep in the analysis,
see section 4.1.2 Does t he Econom ic Activity Relate to t he Free Provision of Services
or Goods?
Seeing that services play a larger role in the inform ation econom y t han goods, it is
also a m ore apt area for t he ECJ t o uphold national restrictions. The reasons for this
are that national m easures can be of a m ore variety and the restrictions are often of
anot her nat ure than strictly protectionist, as oppose to t he nat ure of goods. 28 In
practise, the free m ovem ent have not com e as far for services as for goods. 29 A t otal
of 70 percent of t he Mem ber States’ GNP is com prised by services, but only 20
percent const it utes the t rading between them . 30
23
C- 42/ 02, Lindman paragraph 20.
24
de Burka, G. and Craig, P. (2003), p. 803. See also Case 110/ 78, Van Wesemael ; Case 279/ 80, Webb ,
Opinion of Advocat e General Slynn; Case C- 154/ 89, Commission/ France, Opinion of Advocat e General
Lenz and Case C- 180/ 89, Commission/ Italy.
25
Case C- 76/ 90, Saeger , Opinion of Advocat e General Jacobs, paragraph 12.
26
C- 275/ 92, Schindler .
27
Ibid, paragraph 25.
28
Bernit z, U. and Kjellgren, A. (2002), p. 229- 230.
29
Bernit z, U. (2005) p. 25.
30
COM(2002)441 final.
14
Chapter II – European fram ework
2.6 Freedom of Establishment
Establishm ent , which is som et im es referred t o as the fifth freedom , is described in
article 43 as the pursuit of business and free m ovem ent for the self- em ployed.
“Within t he f ramework of the provisions set out below, restrictions on t he freedom of
establishment of nationals of a Member State in t he t erritory of anot her Member
State shall be prohibit ed. Such prohibition shall also apply to rest rictions in t he
setting- up of agencies, branches or subsidiaries by nationals of any Mem ber State
established in the territory of any Member State. ”
This provision gives EC nationals, bot h natural and legal persons, the right t o set up
a business in a Mem ber State ot her than t heir own. The right com prises t o set up a
perm anent base if so is desired whilst the freedom t o provide services is seen as a
tem porary right which does not necessarily involve residence. The diff erence
between t he right of establishm ent and t he right t o provide services is one of degree
rather than of kind. 3 1 According t o Gebhard 32 , a person can be established in m ore
than one Mem ber Stat e, especially as com panies are sett ing up branches or
subsidiaries, and m em bers of a profession are establishing a second professional
base. 33
The question of establishm ent , in a gam bling case, was f or t he first tim e ex am ined
in Gam belli (see 2.9.5 Gam belli) since it had not been adduced in prior case law,
even though circum stances were at hand (see 2.9.3 Zenat ti).
2.6.1Ex ceptions
Ex ceptions t o the f reedom of establishm ent are stat ed in the articles 45 and 46, and
sam e ex ceptions are applicable to t he freedom to provide services via article 55.
Article 45 attends to activities ex ercised by of ficial authorit y, and has not been
applicable t o any gam bling case. Art icle 46 st ates that “(T)he provisions of t his
Chapter 34 and measures taken in pursuance t hereof shall not prejudice the
applicability of provisions laid down by law, regulation or administrative action
providing for special treatment for foreign nat ionals on grounds of public policy,
public security or public healt h ”.
All restrictive m easures, discrim inating or not, have to be justified by t he Treaty’ s
derogations. In addition they m ust be necessary and proport ional t o t he pursued
object ive. These requirem ents are called “rule of reason” from which t he principle of
overriding reasons of general interest derive. ECJ has concluded t hat derogations
aim ing at prot ect ing t he recipient of a service such as consum er protection and
31
St einer, J. and Woods, L. (2003) p. 338.
32
C- 55/ 94, Gebhard .
33
Ibid, p. 339.
34
This chapt er is referring t o t he chapt er (II) of est ablishm ent but t he sam e provisions are applicable t o
t he chapt er (III) of services according t o art icle 55.
15
Chapter II – European fram ework
public order can justify restrict ions on t he freedom to provide services. 35 In t he
Gouda case3 6 , the Court elaborated t he rule of reason concerning services by stating
that obstacles t o t he freedom to provide services, arising from national m easures
which are applicable wit hout distinction, are perm issible only if those m easures are
justified by overriding reasons relating to the public int erest , if they guarantee t he
achievem ent of t he intended aim and do not go beyond what is necessary in order t o
achieve it . 37
By virt ue of article 46, t he Treaty provides t hree ex ceptions: (1) public policy, (2)
public security and (3) public healt h. They shall, according to case law 38 , be viewed
holistically, and t herefore it is questionable if only one f ulfilled requirem ent is
enough. Following argum ents does not just fall within one ex ception, but often
within all three, and t hey are constantly being adduced as ex cept ions with a
changing outcom e over the years since the circum stances have varied: Responsible
gam bling policies as it aim at lim iting the ex ploit ation of the hum an passion f or
gam bling. Organised crim e as m oney laundering, tax evasion and frauds levelled at
consum ers are som e of the undesired consequences. The allocation of the profits t o
public benefit, which constitutes econom ical m otives, was in Schindler , considered
as pertaining to the public int erests in addition t o the ot hers.3 9 But in Zenatt i, t he ECJ
ex pressed it should m erely com prise an incident al benef icial consequence and not
the real just ificat ion f or the restrictive policy adopted. 40
2.6.2Principle of Overriding Reasons of General Interest
As articles 28 and 30 only apply t o “goods” and not to “services”, the doctrine of
Cassis de Dijon, is neither applicable to services nor establishm ents, see section 2.5
Free Movem ent of Services. However, services and establishm ents have got ten t heir
correspondence to t he Cassis de Dijon t hrough t he Gebhard 41 case.4 2 The Court put
forward f our requirem ents t hat m ust be f ulfilled by a nat ional m easure restricting
the freedom s guaranteed by the Treaty. The Gebhard t est 4 3 , as it is called, states that
the restriction m ust:
1. be applicable in a non- discrim inatory m anner
2. be justified by reasons of public interest
35
See t he joined cases 110/ 78 and 111/ 78 Van Wesemael , paragraph 28; 220/ 83 Commission/ France,
paragraph 20; and 15/ 78 , Koest ler , paragraph 5. Reference was m ade in Läärä paragraph 33 and Zenatti
paragraph 29.
36
C- 288/ 89, Gouda.
37
Ibid, paragraphs 13- 15.
38
C- 275/ 92, Schindler , paragraph 58. However, Advocat e General Gulm ann could not preclude t hat t hese
argum ent s when considered separat ely, would not just ify t he restrict ion imposed. Opinion of Advocat e
General Gulm ann, paragraph 92.
39
C- 275/ 92, Schindler , paragraph 60.
40
C- 67/ 98, Zenatt i , paragraph 36.
C- 55/ 94, Gebhard , see also C- 369/ 96, Arblade, in Läärä paragraph 31 it is referred t o C- 288/ 89,
Gouda
42 Bernit z, U. (2005) p. 208.
43 C- 55/ 94, Gebhard , paragraphs 37, 39 and 46 by referring t o C- 19/ 92, Krauss, paragraph 32.
41
16
Chapter II – European fram ework
3. be suitable for the pursuance of the aim ed object ive
4. not go beyond what is necessary to achieve t his objective
These four questions com prise t he three last steps in t he analysis. The first question
in t he Gebhard t est constitutes t he t hird step in t he analysis, see section 4.1.3 If
there is a Restriction in Place, is it Discrim inating?, the second question constitut es
the fourt h step in t he analysis, see section 4.1.4 Is t he Restrict ion Just ified?, the
third and fourth questions constit ut es a proport ionality test and the fif th step in the
analysis, see section 4.1.5 Is the Restriction Necessary and Proportionate?
2.7 Proposal of Service Directive
The European Council initiated an econom ic process of reform in Lisbon 44 striving f or
EU to be the m ost com pet itive intellect ual econom y within 2010. The area of services
was targeted as t he m ost im port ant in this progress, but t here are still m any
obstacles within t he EU.
In Decem ber 2000, t he European Com m ission published a report wit h t he objective
to rem ove all rem aining service barriers45 . The ult im ate aim is to at tend t he
m ovem ent of services wit hin a count ry in t he sam e m anner as m ovem ents between
count ries wit hin the EU. To facilitate t hat aim , a two- step approach was set out. A
first report 4 6 was to ident if y ex isting barriers, and a second report 4 7 was to bring
forward a package of initiatives dism antling t he barriers.
A proposal for a Service Directive48 , which is to take eff ect within 2010, endeavours
the principle of origin 4 9 in art icle 16 (also known as an internal m arket clause), but
according to article 18 gam bling activities are ex cluded from t his principle, at least
tem porarily. By virtue of article 40, t he Com m ission shall have one year to inquire
the possibility to present a proposal for harm onisation regarding gam bling activities.
The tem porary ex clusion regarding gam bling activities has its ex planation in t he
widely differences between the nations’ outlooks on how gam bling activit ies should
be tackled – t o rest rict it or tax it. In the pream ble of the proposal it is clearly stated
that t his Directive does not im ply an abolition of ex isting gam bling m onopolies. 50
In January, 2006, t he European Parliam ent is ex pect ed to vot e regarding t he
proposal for Directive on services, and especially the int ernal m ark et principle, A
44
Lisbon, European Council, Presidency conclusions (2000).
45
Ibid. This proposal had gambling included in t he principle of count ry of origin whereby it was rejected
by Germ any (Gerhard Schröder) and France (Jaques Chirac).
46
COM(2002)441 final.
47
COM(2004)2 final.
48
Ibid.
49
The principle stat es t hat once a service provider is operat ing legally in one Mem ber St at e, it can m arket
it s service in anot her Member St at e wit hout having t o subm it t o furt her rules t han of it s original Mem ber
St at e. For ex ample, a UK- based gam bling provider would not have t o acquire a Swedish gambling license
according t o t his principle. However, t his is not t he case since gam bling is ex cluded from t he direct ive
unt il furt her not ice.
50
COM(2004)2, pream ble paragraph 35.
17
Chapter II – European fram ework
m ajority of the Mem ber States seem to support to ex clude gam bling, tax es and
healt h case. 51
Moreover, a com parative st udy on “Gam bling Services in the Int ernal Mark et” is being
conducted by the Com m ission. 52 Subject of investigation is the effectiveness of the
national restrictions in m eeting the invoked public interest objectives (public order,
consum er protection, m edia pluralism , and the prot ection of cult ural policy
object ives), taking into account t he requirem ents set out in the case law of t he ECJ.
The result will have an effect on how gam bling ought to evolve wit hin t he EU –
tax ed, banished or som ething in bet ween. Therefore, the study is of great
im portance, but it has been argued t hat it s independence and im part ialit y is in
danger. 53
2.8 Directive on E- Commerce
The Directive st rives t o ensure that Inform ation Society services benefit f rom the
internal
m arket
principles of
free m ovem ent
of
services
and
freedom
of
establishm ent and to be provided throughout t he Union if t hey com ply with t he law
in t heir Mem ber State.
Directive 1998/ 34/ EC, am ended by Direct ive 98/ 48/ EC, state t hat an inf orm ation
service is a service if 5 4 : (1) norm ally provided for rem uneration at a distance, (2)
conducted by electronic m eans and (3) ex ecuted at t he individual request of
recipient of services. By this, e- gam ble can be considered as a service of the
inform ation society. Furt her, t he Directive on elect ronic com m erce5 5 im poses, as well
as the Direct ive on services, the int ernal m arket clause ex pressing t he principle of
count ry of origin in art icle 3. However, by virtue of article 1, the directive is not
applicable to gam bling activities.
An adoption of a European regulatory fram ework for e- gam ing services seem s to be
appropriate, in view of t he de facto borderless nature of e- gam ing services and the
need to regulate t he inform at ion society from a higher level t han that of the Mem ber
States. An EC f ram ework would, partly establish t he ground principles f or the crossborder provision of e- gam ing services and harm onize consum er prot ection in t he
field of gam ing legislation, partly give Mem ber States a certain degree of flex ibility
51
Dagens Industri, (2005- 11- 29).
52
The Comm ission appoint ed t he Swiss Inst it ut e of Comparat ive law, which has form ed a consort ium wit h
t he Cent re for t he St udy of Gam bling of t he Universit y of Salford t o carry out t he econom ic part of t he
st udy.
53
According t o t he European St at e Lott eries and Tot o Associat ion t here are doubt s concerning the
independence and impart iality of t he Centre for t he St udy of Gambling of t he Universit y of Salford t o
whom t he econom ic part is out sourced. Salford are sponsored by a number of Brit ish operat ors in t he
gam bling sect or, in part icular an im port ant Brit ish ‘bookm aker’ involved in m ost of t he cases t ried before
t he It alian court s and referred t o t he European Court of Just ice, which is endeavouring t o radically m odify
t he legal fram ework regulat ing t his sphere of act ivit y. And it is alarm ing since t he Cent re for t he St udy of
Gam bling of t he Universit y of Salford st at es on it s websit e that it s Sponsors’ Advisory Board ‘m eets t o
ensure t hat t he legit im at e int erest s of sponsors are adequat ely secured’ (Writt en question E- 2206/ 05 ).
54
Direct ive 98/ 34/ EC, art icle 1.2.
55
Direct ive 2000/ 31/ EC.
18
Chapter II – European fram ework
to adopt tailored national m easures, in com pliance wit h t he European fram ework.
Therefore, such a fram ework could be advocated to be in t he best interest of all
parties concerned.
2.9 European Case Law on Gambling
The conflict between the essence of the EC, in its free m ovem ent, and the obst acles
for these freedom s across borders t hat follows from a m onopoly is const antly being
brought before national Courts and t he ECJ. In t hose cases, the public interests are
being questioned and at t rial in order for t he European m onopolies to sust ain. There
is no ex plicit regulation within t he EC as far as gam bling is concerned, but on one
hand t he basic freedom s and com petition distortion can and are being adduced,
m ainly by t he Com m ission, and on t he ot her hand, t he Mem ber Stat es are adducing
the public interest and its overriding reasons, in favour of the m onopolies. The
Com m ission recognizes that nat ional restrictions can be just ified by public int erest
object ives, but according to t he jurisprudence of t he ECJ, t hese restrictions m ust not
go beyond what is necessary to attain these aim s of public interest.
However, in one precedential case56 , the ECJ wit hheld t hat in absence of any EC
legislation, the Mem ber States has t he power to individually assess, based upon their
social m odel, what kind of m easures should be im posed to m aintain order in society.
For ex am ple, if one Mem ber Stat e prohibits certain gam bling act ivities while another
practises a less restrictive regim e, neit her does it necessarily im ply that the m ore
restrictive m easure is disproportionate in relation to the objective pursued nor
unnecessary.
Later jurisprudence has stressed t hat a restriction could only be allowed if legal
disposition im posing such a restriction de facto corresponded to the evok ed
object ives. 57 Theref ore, it could be argued t hat a restrict ion m ust have a legal
disposition concerning t hat object ive insert ed in the legal instrum ent, in order for a
Mem ber State to evoke f or ex am ple the protection of consum ers.
2.9.1Schindler 5 8
The Schindler verdict from 1992 was t he first prelim inary ruling concerning
gambling. The main question of the case was if the freedom to provide services
constitut ed an obst acle f or a national legislation prohibit ing lotteries.
The background to the case was a m ailed invitation t o British citizens from the
Schindler brot hers to take part in a Germ an lot t ery. G. and J. Schindler were agents
for SKL59 and, therefore, responsible for sending advertisem ent, ordering form s and,
if necessary, lottery tickets, on behalf of SKL. The invitations were stopped in the
British custom s since lot teries of this kind were prohibit ed according to British law.
56
C- 275/ 92, Schindler , paragraph 61; Schindler, opinion of A.G. Gulm ann, paragraphs 101- 102.
57
C- 67/ 98, Zenatt i, paragraph 46.
58
C- 275/ 92, Schindler .
59
Süddeut sche Klassenlott erie.
19
Chapter II – European fram ework
Main questions were whether lott eries were considered to f all wit hin t he scope of the
free m ovem ent of services according to article 49 Treat y, and if t hat service could be
restricted when it com es to gam es and lotteries.
By way of introduction, ECJ regarded the activity in quest ion to be considered as an
econom ic activity 60 , see section 4.1.1 Does the Regulation Concerned Relate to an
Econom ic Activity? If the activity would not have been considered as an econom ic,
the Treat y would not be applicable.
The objects at issue were also to be related to “services”, and not “goods”, even
though t hey were physical products61 , see section 4.1.2 Does t he Econom ic Activity
Relat e to t he Free Provision of Services or Goods?, f or f urther reasoning. According
to the ECJ, t he activit ies in question were m erely the first step t owards the
organisation and conduction of a lot tery and t herefore t hey could not be considered
as independent from t he lott ery. The British legislation was also considered t o
constitut e an obstacle to t he freedom to provide services62 , even t hough t he national
m easure was applicable without distinction. 6 3
What was st ated nex t has in t he afterm at h becom e a lodestar f or the protectionist
argum entat ion of t he Mem ber Stat es. ECJ f ound the restriction on t he cross- border
provision of lot tery services com patible with t he Treat y by considering: 64
a) the part icular nat ure of lotteries including m oral, religious and cult ural
aspects,
b) the general trend wit hin the Mem ber St ates t o regulate and even forbid
gam bling wit h t he purpose to cont rol privat e prof its,
c) the f act t hat lot teries in m any cases increase the risk of different kinds of
crim inality, inter alia fraud,
d) that lotteries give incentive t o spend m oney wit h possible negative individual
and social consequences and
e) although not considered to be an objective justification as such, lott eries are
an im portant contributor f or the financing of good causes and public int erest
act ivities.
ECJ concluded t he above- m entioned circum stances to justify t he discretional power
of national aut horit ies to determ ine the ex t ent of the protect ion afforded by a
Mem ber Stat e on its t erritory with regard to lott eries and other form s of gam bling.
Thus, when a Mem ber St ate forbids advertisem ent on t heir t erritory, for big lotteries
organised in another Mem ber State, it does not constitut e an illegitim ate restriction
on t he freedom t o provide services. On t he cont rary, such a restriction is necessary
in order t o m aintain the protection set forth by the Mem ber Stat e on t he subject of
lotteries.
60
C- 275/ 92, Schindler , paragraph 19.
61
Ibid, paragraph 25.
62
Ibid, paragraph 45.
63
Ibid, paragraphs 43 and 47.
64
Ibid, paragraph 60
20
Chapter II – European fram ework
Advocat e General, A.G. Gulm ann, shared the sam e view in his prelim inary ruling by
reasoning that, in view of the unknown im plications of an open and com petitive
gam ing sector, it was not possible to identify less restrictive m easures for achieving
the pursued objectives. 65
2.9.2Läärä66
In Läära, the case in point was whet her nat ional legislat ion reserving t o a public
body the right to run the operation of slot machines, on t he territory of t he Mem ber
State concerned, was compatible with t he provisions in the Treaty, especially the
freedom to provide services.
Läärä, a private person, had been of fering gam bling on slot m achines, on behalf of a
British com pany without a licence. According t o Finnish law, only one subject could
be granted a licence f or operating gam es on slot m achines and at the tim e period in
question, it had been granted t o RAY6 7 . Läärä argued for his cause t hat the prospects
of winning offered by t he slot m achines was not based ex clusively on chance but
also, to a large ex tent, on t he skill of the player. Therefore, those m achines could
not be regarded as gam bling m achines, and t he Finnish legislat ion was contrary t o
the EC rules governing t he free m ovem ent of goods and services.
The Court considered t he slot m achines as goods that could fall wit hin article 30 6 8 ,
but not in this case, for elaboration see section 4.1.2 Does the Econom ic Activity
Relat e to the Free Provision of Services or Goods? It was, however, stated that such
legislation constit ut ed an obstacle to the freedom to provide services. 69
The Finnish Court want ed to know if an analogy could be m ade with t he Schindler
ruling. Läärä, unhappy with t he verdict in Schindler , argued t hat t he cases diff ered –
Schindler was about an international lott ery wit h high prizes, while t his regarded an
ent ertainm ent gam e wit h sm all prizes.7 0 But according to Schindler , the organization
of lot teries was to be equally applicable to other com parable form s of gam bling 71 . 72
ECJ ruled t hat Finnish law was consistent wit h EC- law, considering Schindler , since
the provision aim ed at the pursued objective. The aim ed objective was to lim it
ex ploitation of t he hum an passion for gam bling, to avoid t he risk of crim e and f raud
65
C- 275/ 92, Schindler , Opinion of Advocat e General Gulmann paragraph 126.
66
C- 124/ 97, Läärä.
67
Raha- aut om aat t iyhdist ys (Associat ion for t he Managem ent of Slot Machines)
68
C- 124/ 97, Läärä, paragraph 20.
69
C- 124/ 97, Läärä, paragraph 29.
70
C- 124/ 97, Läärä, paragraph 11.
71
C- 275/ 92, Schindler , paragraph 49.
72
ECJ had in t he past declined t o equat e cert ain gam es wit h lot t eries of t he t ype considered in Schindler,
see C- 368/ 95, Familiapress. The case concerned com pet it ions published in m agazines in t he form of
crosswords or puzzles, giving readers who had sent in t he correct solut ions t he chance of being ent ered
in a draw from which a num ber of t hem were select ed as prize- winners. As t he Court not ed, part icularly
in paragraph 23 of t hat judgm ent , such gam es, organised only on a sm all scale and for insignificant
st akes, do not const it ut e an econom ic act ivit y in t heir own right but are m erely one aspect of t he edit orial
cont ent of a m agazine.
21
Chapter II – European fram ework
to which t he activities concerned give rise and to aut horise those activities only wit h
a view to the collection of funds for charity or for other benevolent purposes. The
Court concluded t hat there were no disproportional regulations wit h respect to t he
aim ed object ive, or discrim inatory for t hat m at t er. According t o Schindler , national
aut horities had a discret ional power to determ ine the ex t ent of the protection t o be
afforded by a Mem ber St ate on it s territory wit h regard to lotteries and ot her form s
of gam bling.
The Court considered t he Finnish provision f ulfilling all t he requirem ents necessary
in order to obtain an ex ception from t he EC freedom s. It was also point ed out t hat
"…given t he risk of crime and fraud…", t here were no alternatives (such as tax ation)
to a non- prof it m aking approach t hat were equally ef fect ive to ensure "…t hat strict
limits are set to t he lucrative nat ure of such activities". 7 3 In addition, “…t he m ere fact
that a Mem ber State has opted for a system of prot ection which differs from that
adopt ed by another Mem ber Stat e, cannot affect t he assessment of t he need for, and
proportionality of, t he provisions enacted to t hat end. Those provisions m ust be
assessed solely by reference to the objectives pursued by the national aut horities of
the Mem ber State concerned and the level of protection which they are int ended t o
provide. 74
Contrary to t he quot ed opinions and decisions, it was Advocate General La Pergola’ s
opinion t hat t he Finish law, granting RAY the right to run gam bling m achines, did
not m eet t he criterion of proportionalit y. However, the ECJ saw it diff erently and did
not follow this opinion. 75
2.9.3Zenatti 76
In 1998, the main question was whether a national provision restricting t he taking of
bets could const it ute an obstacle to t he freedom to provide services according t o the
Treaty.
Zenatti ran a cent re for the ex change of inform ation on sport bet s and act ed as an
interm ediary in Italy for a British com pany (SSP77 ) specialising in t aking bet s. In Italy,
betting where only perm itted on events organized by t he national Olym pic
Com m itt ee, CONI78 (sports events) and t he national equine organization, UNIRE79
(horse races). Other subjects could subm it invitations to t ender for licenses t o
organize bets, in ret urn for, paym ent of the relevant levies, and being subject t o
com ply with m inist erial guidelines regarding t he proper m anagem ent of betting
activity.
Läärä, C- 124/ 97, paragraph 41.
Ibid, paragraph 36.
75 Läärä, C- 124/ 97, Opinion of Advocat e General paragraph 40.
76 C- 67/ 98, Zenatt i .
77 SSP Bett ing Lt d.
78 Com it ato Olimpico Nazionale It aliano.
79 Unione Nazionale Increm ent o Razze Equine.
73
74
22
Chapter II – European fram ework
Zenatti argued t hat Schindler was not applicable since t his case dealt wit h
com petence and skilf ulness in predicting t he outcom es. By referring to skilf ulness,
betting could be int erpreted as a contest rather t han gam bling. According to Zenat ti,
the justifications in t erm s of social considerations and prevent ion of fraud should
not be considered as enough t o restrict t he free m ovem ent of services. The Italian
Court on the other hand advocat ed for an analogy with Schindler before referring t o
the ECJ.
ECJ did observe two discrepancies between t he cases. Firstly, in Schindler , Great
Britain had a total ban against large- scaled lott eries, while in t his case, there was no
total ban. Instead, t he governm ent let certain selected organizat ions t o run gam bling
with special regulations. The Court st ressed that t he m ere fact t hat one Mem ber
State prohibits certain gam ing act ivities, while anot her Mem ber State advocates a
less restrictive regim e, for ex am ple, by granting a lim ited num ber of licenses, does
not necessarily im ply that t he m ore restrictive m easure is disproport ionat e in
relation to the objective pursued, or unnecessary.8 0 Secondly, in the case set forth,
the freedom of est ablishm ent could apply since SSP possessed the right to run
gam bling business in another Mem ber Stat e and aim ed at the sam e freedom in Italy.
Notably, the Italian Court did not raise bot h quest ions before t he ECJ. Hence, the ECJ
only considered t he question regarding t he m ovem ent of services, since it was
prevent ed from ex am ining t he case on the basis of establishm ent. 8 1
The ECJ concluded t hat, according to previous case law, the freedom t o provide
services m ay be restricted by Italian law, if it could be m otivat ed by social
considerations and aim ed to prevent t he harm ful effect t hat could be caused by
gam bling.
Advocat e General Fennelly was of the opinion t hat it was for t he national Court t o
consider whet her the t wo conditions, necessary and proportionat e, were m et.
Further, Fennelly condem ned a Mem ber Stat e t o engage eit her directly or t hrough
certain privileged bodies in t he active prom otion of off icially organized gam bling
with t he prim ary objective of financing social activities, however worthy, under t he
guise of a m orally justified policy to control gam bling. 82
2.9.4Anom ar 83
The question concerned Portuguese legislation relating t o t he operat ion and playing
of games of chance or gambling under decree- law and whet her it complied wit h EClaw. The questions were raised by Anomar 84 (the Port uguese national association of
operat ors in t he gam bling machine sector) against t he Portuguese state.
The Port uguese decree provided t hat t he right to operate gam es of chance or
gam bling was reserved t o the stat e. Alt hough t he state alone is entit led to that right,
80
C- 67/ 98, Zenatt i , paragraphs 34- 35.
81
Ibid, paragraph 20- 23.
82
C- 67/ 98, Zenatt i , Opinion of Advocat e General Fennelly, paragraph 32.
83
C- 6/ 01, Anomar .
84
Associação Nacional de Operadores de Máquinas Recreat ivas
23
Chapter II – European fram ework
it could be ex ercised, other t han by the state or anot her public body, subject t o
aut horization in the form of an adm inistrative licensing agreem ent.
The decree- law was acknowledged by t he Court t o be applicable without distinction
to its own nationals and nationals of other Mem ber St ates, and constit ut e a barrier
to the f reedom to provide services. Nonet heless, such a law was considered justified
in view of the concerns of social policy and the prevention of fraud . 85
By referring to Läärä86 and Zenatti 87 , ECJ stressed t hat t hat t he possible ex ist ence, in
ot her Mem ber Stat es, of legislation laying down conditions for the operation and
playing of gam es of chance or gam bling which are less restrictive than t hose
provided for by t he Port uguese legislation has no bearing on t he com patibility wit h
EC- law. 88 Therefore, t he choice of m et hods for organising and controlling t he
operation and playing of gam es of chance or gam bling, falls within the m argin of
discretion which the national aut horit ies enjoy. 8 9
2.9.5Gam belli 90
In t he Gam belli case t he quest ion raised was if a national legislation, which prohibits
on pain of crim inal penalties the pursuit of t he activities of collecting, taking,
booking and forwarding offers of bets, in particular bets on sporting events, wit hout
a licence or aut horization from the Mem ber St ate concerned, constit utes a restriction
on t he f reedom of est ablishment and t he freedom to provide services provided for in
articles 43 and 49 of the Treaty respectively.
Gam belli was an Italian agency, one am ong m any, t hat belonged t o t he English
bookm aker Stanley91 . The agencies were accused of having collaborat ed in Italy wit h
a bookm aker abroad in the activit y of collecting bets which is norm ally reserved by
law t o the state, t hus infringing Italian law. Such activity was considered t o be
incom patible wit h the m onopoly on sporting bets, and was solely enjoyed by CONI92 .
The case bef ore t he Italian Court 93 ,
94
did not quite correspond to the facts already
considered by the ECJ in Zenatti . Recent am endm ents to an Italian provision
dem anded a re- ex am ination of the issue by t he ECJ. It becam e known t hat t he
85
C- 6/ 01, Anom ar , paragraph 75.
86
C- 124/ 97, Läärä, paragraph 36.
87
C- 67/ 98, Zenatt i , paragraph 34.
88
C- 6/ 01, Anom ar , paragraph 80- 81.
89
Ibid, paragraph 88.
90
C- 243/ 01, Gambelli .
91
St anley Int ernat ional Bet t ing Ltd.
92
Com itat o Olimpico Nazionale It aliano (The nat ional Olym pic Com m itt ee).
93
Tribunale di Ascoli Piceno, t he It alian court which was referring t he case t o t he ECJ.
94
The lower Court of Sant a Maria Capua Vet ere (It aly) refused t o condem n Gambelli for infringing t he Act
concerning bett ing and gambling act ivit ies on sport s compet it ions. First ly, because t he concerned act ivit y
was governed by UK law. Therefore t he It alian legal prohibit ion was not applicable. Secondly, and going
against t he jurisprudence of t he European Court of Just ice, t he Court held t hat t he restrict ion of a UK
aut horized act ivit y was against t he principles of t he int ernal m arket . In t he appeal procedure, t he Court of
Ascoli Piceno (It aly), asked a prelim inary ruling on t he compatibilit y bet ween t he It alian Act and art icle 49
of t he Treat y.
24
Chapter II – European fram ework
restrictions were dictated chiefly by the need t o prot ect sports Totoricevit ori, a
category of private sect or undertakings. Not only that, no public policy concerns
were f ound by the Court in t hose restrictions able to justif y a lim itation of the rights
guaranteed by the EC or constitutional rules. 95
Further, t he national Court questioned whether the principle of proport ionality was
being observed, having regard, f irst to the severity of the prohibition im posed wit h
crim inal penalt ies which m ay have m ade it im possible in practice f or lawfully
constitut ed undertakings or EC operators to carry on econom ic activit ies in t he
betting and gam ing sect or in Italy, and secondly to the im port ance of t he national
public interest protected and for which t he EC freedom s were sacrif iced.
Forem ost, t he Italian Court also considered t hat it could not ignore t he ex tent of the
apparent
discrepancy
between
national
legislation
severely
rest rict ing
t he
acceptance of bets on sporting events by foreign EC undert akings on one hand, and
the considerable ex pansion of betting and gam ing which t he Italian state was
pursuing at nat ional level for the purpose of collecting tax ation revenues, on the
ot her.
Gambelli ,
In
bot h
the
freedom
to
provide
services
and
the
freedom
of
establishm ent 9 6 were addressed. ECJ cam e with a ground breaking verdict , at least
according t o m any ant i- m onopolists. It stat ed that the Italian Act was an obstacle to
the f reedom of establishm ent 9 7 and to the freedom to provide services. 9 8 Gam belli
argued t hat it was rem arkably that bettors in Italy were not only deprived of t he
possibility of using book m akers established in anot her Mem ber State, even t hrough
the interm ediary of operators established in Italy, but by doing so they were also
subject to crim inal penalties. The Court agreed that t he prohibit ion in question,
enforced by crim inal penalties, was a restriction on the freedom to provide services.
The sensational stat em ent was t he Court ’ s notion t hat aut horities of a Mem ber State
cannot invoke public order concerns relating t o t he need to reduce opport unities for
betting in order t o just ify m easures if t hey incite and encourage consum ers t o
participat e in lott eries, gam es of chance and betting to t he financial benefit of the
public purse. 99 Under present case, the state owned gam bling com pany had been
m arketing their gam es aggressively in addition t o a planned increase in am ount of
gam es. By these m eans, the purpose of t he policies pursued could not have been t o
lim it gam bling, and t heref ore t hey did not have any right to lim it t he free m ovem ent
of services.
Regarding t he ex ceptions100 , the Court referred to paragraph 36 of t he judgm ent in
Zenatti , concluding t hat restrictions m ust in any event ref lect a concern to bring
95
C- 243/ 01, Gambelli , paragraph 19.
96
This was not addressed in Zenat t i since t he nat ional Court had not raised t he quest ion.
97
C- 243/ 01, Gambelli , paragraphs 48- 49 and 59.
98
Ibid, paragraphs 54 and 59.
99
Ibid, paragraph 69.
100
Measures ex pressly provided for in Art icles 45 and 46 EC, or just ified, in accordance wit h t he case- law
of t he Court , for reasons of overriding general int erest .
25
Chapter II – European fram ework
about a genuine dim inution of gam bling opport unities, and the financing of social
activities through a levy on t he proceeds of aut horized gam es m ust only const itut e
an incidental beneficial consequence and not t he real just ification for the restrictive
policy adopted. However, the Court concluded that it is f or t he national Court t o
determ ine:
1. Whet her t he restriction on t he freedom of establishm ent and on t he freedom
to provide services could be justified by im perat ive requirem ents in the
general int erest, be suit able for achieving t he objective which t hey pursue
and not go beyond what is necessary in order to att ain it. In any event, they
m ust be applied without discrimination . 10 1
2. Whet her it in practice were m ore easily for It alian operat ors than for foreign
operat ors to, regarding the m anner in which t he conditions were laid down,
subm it invit ations to tender for licences to organise bets on sporting events.
If
so,
those
conditions
do
not
satisfy
the
requirem ent
of
non-
discrim inat ion . 1 02
3. Whet her t he im posed rest rict ions were restrictions beyond what is necessary.
Especially as in this case “… where the supplier of t he service was subject in
his Mem ber State of establishment to a regulat ion entailing controls and
penalties 103 , where t he int ermediaries were lawf ully constitut ed” and where
”… before t he stat utory amendm ents eff ected by the Italian Act in question,
those int erm ediaries considered t hat they were permitted t o transm it bets on
foreign sporting event s”. 1 04
4. Finally, whet her the aim s which m ight justify t he national legislation are
actually served, and in t he light of those aim s, whet her t he rest rictions it
im posed were disproport ionat e. 10 5
As I will analyse in chapt er IV, the delegations m ade by the ECJ to the national Court,
has been advocated by either side. The fact t hat each question was given guidelines
to the national Court t o consider, is undisput ed. The difference of opinion is
com posed of how strict t he guidelines could be interpreted and t herefore how m uch
discretionary scope the ECJ actually had left to the national Court.
2.9.6Opinion of Advocate General Siegbert Alber
I would like to give som e consideration to Advocat e General Siegbert Alber’ s
opinion, since he kind of paved t he way for the criticism in Gambelli . One should
rem em ber t hat t he ECJ has m ore political considerat ions to em brace t han t he
101
C- 243/ 01, Gambelli , paragraph 65.
102
Ibid, paragraph 71.
103
Stanley was aut horized t o carry on its act ivit y in t he Unit ed Kingdom and abroad which m ade it subject
t o rigorous controls in relat ion t o t he legalit y of it s act ivit ies, which were carried out by a privat e audit
company and by t he Inland Revenue and Cust om s and Ex cise.
104
C- 243/ 01, Gambelli , paragraph 73.
105
Ibid, paragraph 75.
26
Chapter II – European fram ework
Advocat e General, sharing a m ere opinion, and often so in the spirit of de lege
ferenda.
Alber did go f urt her in his analysis of the case by not delegat ing t he quest ions to the
national Court to determ ine. The questions did not lie wit hin the discretional power
of the Mem ber State to determ ine, according to Alber.
Given the circum stances in the case, Alber did not consider Italy to practise a
consistent policy in order to lim it the supply of gam bling, partly due to aggressive
m arketing, which was aim ed to incit e and encourage, partly due to t he fact that
legislation had opened up the possibility to offer an increased am ount of supply of
gam bling. The claim ed objectives, once stated, but no longer pursued, could no
longer justify obstacles to the freedom s set f ort h in the Treaty. 106
Alber also st ressed that it had becom e evident f rom the Mem ber St ates’ statem ents
that they were afraid of the econom ic consequences a change in t he gam bling
m arket could bring about . 10 7
In conclusion, when as in this case, the object ive required for a justificat ion can be
questioned due to inconsistent politics and no overriding reasons of general int erest
is at hand, it can only be disproportional with a pain of crim inal penalties.
2.9.7Lindm an 1 08
In Lindman, the question brought before ECJ was where a gambling winning should
be tax ed. The ECJ had t o determ ine whet her a national legislation, im posing t ax on
lotteries won abroad, was compatible wit h t he f reedoms wit hin the Treaty; both t o
provide and receive services.
The Finnish wom an Lindm an had during a stay in Sweden bought a lot tery ticket on
which she lat er won SEK one m illion. The Finnish governm ent wanted Lindm an t o
pay incom e tax on the winning, even if all prizes in Finnish lot t eries were ex em pt ed
from tax f or the buyer of the ticket since t he organiser of t he lot tery was subm itt ed
to pay a lottery tax . The sam e rules apply in Sweden.
Lindm an argued t hat the Finnish legislat ion was discrim inating since she would not
have been im posed to any incom e tax if she had lived in Sweden or if she had won in
a Finnish lottery.
The
Finnish
Governm ent
adm it ted
t hat
t he
national
legislation
could
be
discrim inat ory, but t hat it should be justified by reasons of public int erest such as
the prevent ion of wrongdoing and fraud, the reduction of social dam age caused by
gam bling, the f inancing of activities in the public int erest and ensuring legal
certainty.
According to case law 109 , the reasons which m ay be invoked by a Mem ber State by
way of justif ication m ust be accom panied by an analysis of appropriat eness and
106
C- 243/ 01, Gambelli , Opinion of Advocat e General Alber, paragraphs 23, 121 and 122.
107
C- 243/ 01, Gambelli , Opinion of Advocat e General Alber, paragraph 127.
108
C- 42/ 02, Lindman .
27
Chapter II – European fram ework
proportionality of t he rest rict ive m easure adopt ed by t hat state. 11 0 Furt her, the ECJ
stated that it lacked evidence from the ref erring Court, in order to conclude a
particular causal relationship between t he gravity of the risks connected to playing
gam es of chance and t he participation by nationals of the Mem ber Stat e concerned
in lotteries organized in other Mem ber St ates. 11 1
For that reason, ECJ concluded t hat article 49 of t he Treaty prohibits winnings from
gam es of chance, organised in other Mem ber States, being im posed incom e tax , as
winnings from gam es of chance conducted in t he Mem ber State in quest ion are not
tax able.
Thus, in line with t he European integrat ion, even t he area of tax at ion is becom ing
harm onized, and count ries m em bers of the EU and EFTA are now f orced to change
their tax legislation in accordance wit h the ruling.
2.10 Afterm ath of Gambelli
Gambelli has been interpret ed bot h in favour of , and against, a gam bling m onopoly,
and will later be elaborated in chapter IV. This section aim s to outline partly, t he
different verdicts of the nat ional Courts post t he Gam belli case partly, show actions
taken against countries subm it ted t o t he provisions in quest ion. The fact that it has
been interpret ed differently by the Courts, indicates the uncertainty from Gam belli,
and t hat is the only t hing for sure that Gam belli has rendered. Following has
happened since Gambelli , in chronological order:
Novem ber 2003, Germ an Court rules in favour of Westdeutsche Lotterie Gm bH u.
Co. oHG and Ladbrokes was forced to close down it s Germ an language Int ernet
sites. 112
However, in February 2004, the Hessischer Verwaltungsgerichtshof (Adm inistrative
Court of Appeal of Hessen) stat es that Article 284 of the Germ an Crim inal Code is
not applicable t o the off ering of bets to Germ an consum ers, by foreign bookm akers,
whether from wit hin Germ any or online. Penalising f oreign bookm akers would
constitut e a blatant breach of Article 49 in t he light of t he ex t ensive m arketing m ade
by Oddset to raise f unds for the 2006 World Cup. 1 13
February 2004, subsequently, t he Adm inistrative Court of Kassel declared t he
current stat e of licensing provisions on gam bling as unconstit utional. Article 12 of
the Germ an Const itution concerns the freedom t o choose one’ s profession and the
state'
s ex clusive right t o operate sports betting was considered incom patible wit h
it. 114
109
C- 55/ 94, Gebhard and C- 100/ 01, Oteiza Olazabal .
110
C- 42/ 02, Lindman , paragraph 25.
111
Ibid, paragraph 26.
112
Keuleers, E., (2005).
113
Ibid.
114
Hessischer Verwalt ungsgericht shofs in Kassel, verdict 9 February, 2004.
28
Chapter II – European fram ework
March 2004, t he Com m ission sends a warning (letter of form al not ice) t o Denm ark
im posing it to justif y its restrictions on non- Danish bookm akers, or else it will be
brought before the ECJ. 115
April 2004, Germ an Constitut ional Court , Bundesgerichtshof (BGH), declares it would
be unjustified to im pose an Austrian licensed bookm aker an obligat ion t o obt ain an
additional Germ an license. It referred to a decision of the Landgericht München I of
27 October 2003, in which t he Court concluded the gam bling m onopoly of
organizat ion of sports bets and lotteries to be adopted and m aintained by tax
reasons and not of public order. A Germ an Gam belli case is to be ex pected before
the ECJ. 11 6
May 2004, t he Finnish governm ent rejects licence applicat ions from European Sports
Betting Consultants and Ladbrokes on t he grounds that licences granted t o Oy
Veikkaus AB and Fintot o Oy are still in force.1 17
May 2004, t he m ost im portant Italian judiciary body com petent in interpreting
ordinary laws (the Unit ed Sections of the It alian Court of Cassation) conf irm s the
legality of the Italian state’ s m onopoly. 1 18 The opinion of t he Court is that t he
purpose is t o “canalize” t he dem and into m ore checkable syst em s in order to com bat
crim inality. 119
June 2004, an int erlocut ory judgem ent is given by the Court of Arnhem , in which
ex plicit reference was m ade to Gam belli and in which it was held t hat rest rictions
im posed t o prevent Ladbrok es entering the Dutch m ark et were inconsistent wit h
European Law. The outcom e was in respect of t he m arketing budget (
25 m illions)
of De Lot to organization and Holland Casino, and t he very deliberate attem pts t o
stim ulate dem and f or new gam bling products. It can be argued in consist ency wit h
Gambelli , as no public order in order t o justify restrictive m easures could be
adduced, where participation in lotteries, gam es of chance and betting were
encouraged by the Mem ber State wit h the aim to accrue the public purse. 1 20
In July 2004, t he Italian Suprem e Court rules in f avour of Italy'
s restrictive gam bling
polit ic. As the restrictions were justified by public order int erest (keeping gam bling
free from crim inality), it did not constit ut e a restriction on t he freedom of
establishm ent and t he freedom to provide services provided for in Articles 43 and 49
of the Treaty respectively. Not ably, the Larino Dist rict Court subsequent ly referred
the case (Placanica1 21 ) to t he ECJ. Its judgm ent is still pending.
October 2004, the Com m ission refers Greece to t he ECJ for infringing Union
regulations on the free m ovem ent of goods and services, since Greek Law Num ber
115
IP/ 04/ 401.
116
Keuleers, E., (2005).
117
Ibid.
118
Ruling no. 23272 of May 18, 2004.
119
Del Nino, A., (2004).
120
Keuleers, E., (2005).
121
Case C- 338/ 04, Placanica.
29
Chapter II – European fram ework
3037 ex plicitly forbids electronic gam es wit h "elect ronic m echanism s and software"
from public and private places, with offenders facing fines of 5,000 to 75,000 euros
and im prisonm ent of one t o twelve m ont hs. 12 2
Later in October, the Swedish Suprem e Adm inistrative Court delivers a ruling in
favour of the stat e’ s gam bling m onopoly. This is followed by Douglas Roos (CEO of
Ladbrokes) accusing t he Court of "running political errands". 1 23
Novem ber
2004,
legal
proceedings
are initiated
against
online bookm aker
Sportingbet, by Hungary'
s Gam bling Supervision, on grounds of contravening t he
gam bling legislation. A fine has already been im posed Provim ar Kft , Sportingbet'
s
Hungarian m edia buyer Ft 500,000 and asked t he com pany to rem ove Hungarianlanguage cont ent from the Sport ingbet website. 1 24
Sam e m ont h, a Court of appeal upheld t he decision of Oslo'
s Municipal Court t hat
the planned state m onopoly on gam bling m achines violates the European Econom ic
Area (EEA) Agreem ent regulat ions1 25 . Prior to this, a letter of f orm al not ice was sent
by the EFTA Surveillance Aut hority in April sam e year, in which a m onopoly was not
considered to be the answer in t he prevention of gam bling addiction or under- age
gam bling, to control software, to introduce new regulations m ore quickly, or t o
com bat crim e. In the end it stated t hat sam e effects could be achieved by the
im position of stricter rules on private operators. 1 26
February 2005, the Dutch Suprem e Court upholds a ruling im plying that Ladbrokes,
as it does not have a Dut ch bet ting licence cannot accept bets from cust om ers based
in Holland. 1 27
May 2005, a recent governm ent decision preventing Ladbrokes from operating in
Finland is overturned by the Finnish Suprem e Adm inistrative Court. 1 28
June 2005, as oppose to previous ruling, the Swedish Suprem e Adm inistrative Court
decides not to overt urn the Swedish governm ent's decision 1 29 to reject an application
from Ladbrok es to be allowed to set up bet ting operations in Sweden. 13 0
July 2005, le tribunal de grande instance de Paris ruled t hat Zet urf Ltd should stop
accepting bets on French horse racing. 1 31
August 2005, t he Norwegian Court of Appeal overturns an earlier ruling by the Oslo
Town Court, concluding that t he granting of a m onopoly on gam bling m achines t o
Norsk Tipping does not violate European Econom ic Area (EEA) rules on free
122
IP/ 04/ 1227.
123
Dagens Industri (2005- 06- 20).
124
Keuleers, E., (2005).
125
As EFTA m em bers Norway should be imposed t he sam e rules.
126
PR(04)10, see also PR (04)35.
127
Keuleers, E., (2005).
128
Press release, Ladbrokes (2005).
129
Fi2003/ 6390.
130
Swedish Suprem e Adm inist rat ive Court , 3841- 04.
131
Keuleers, E., (2005).
30
Chapter II – European fram ework
m ovem ent of services and freedom of establishm ent. The Court found the granting
of a m onopoly proportionate to t he policy aim ing to decrease t he supply of betting
and cited Läärä. 13 2
August 2005, a Dutch Court rules in favour of online gam bling rest rict ions and
orders t he UK based book m aker Ladbrokes to st op of fering online services to Dutch
citizens. A penalty per day f or non com pliance is im posed by the Court. 1 33
Septem ber 2005, an at t ended and ant icipated decision is being delayed t o early
2006. 1 34 The Germ an Federal Constitutional Court is to regard the provision of
betting services by private com panies. According to Wulf Ham bach, the Court has
delayed its decision, in response to huge public pressure; he nonetheless concludes,
that t he fact t hat t he Court has asked for an oral hearing, m ay strongly indicat e a
preference in favour of liberalising t he Germ an bett ing m arket. 135
Novem ber, 2005, the Swedish Suprem e Court ref ers a case to t he ECJ, regarding
Unibet’ s interlocut ory legal prot ection concerning t he polem ic of t he freedom to
provide services and Swedish provisions.
132
Ibid.
133
Ibid.
134
Case number: 1BvR 1054/ 01
135
Ham bach, W., (2005).
31
Chapter III – Swedish fram ework
CHAPTER III
Swedish Fram ework
3.1 Background
In Sweden, t he gam bling and lot t ery m arkets are regulat ed whereby only certain
actors are allowed, t hese actors being public benefit organizations, t he horse racing
industry and t he Swedish st ate13 6 , see Appendix 1, chart 1.
Within gam bling and lot tery, from the Mem ber States’ point of view 1 37 , t here is an
estim at ed high risk for unscrupulous arrangers t o ex ploit a lot tery, f or ex am ple, f or
crim inal purposes such as fraud or usury. Furtherm ore, lott eries and gam bling
involve risks of social and econom ic considerations for consum ers. Hence, lotteries
have for m any years been subject to stat e regulation in Sweden, as well as in ot her
parts of the world.
However, the Swedish state has a double function since it, part ly conducts the
com m ercial operation of gam bling (through Svenska Spel and ATG), partly carries
out supervision (through The Swedish gam bling board - Lott eriinspektionen). Bot h
operations are subm itt ed to t he Departm ent of Finance. The double function of the
state is oft en referred to as leading t o a situation of conf lict. On one hand, gam bling
m ust be suppressed by t he legislator, but on t he other hand gam bling m ust be sold
as a product.
3.2 The Swedish Monopoly
Last year (2004), the Swedish gam bling m arket am ount ed t o approx im ately SEK 36,5
billion, see Appendix A, table 1. The subject s allowed to conduct gam bling and
lottery activit ies in Sweden are Svenska Spel AB, AB Trav och Galopp (ATG) and
136
Svenska Spel AB, AB Trav och Galopp (ATG), Spero (A- Lott erierna and IOGT- NTO- lott erierna).
137
SOU 1992:130, p. 99 and prop. 1995/ 96:169, p. 11.
32
Chapter III – Swedish fram ework
public benefit organizations. Svenska Spel is a com pany wholly owned by t he
Swedish
state
which
arose
through
a
fusion
between
Tipstjänst
AB and
Penninglott eriet AB, in January 1997. The fusion was m ade t o st rengt hen the
com panies due t o increased dem and of gam bling and increased com petit ion. 1 38 The
operations of Svenska Spel include bettings at sporting events and dog races, the
operation of gam bling m achines and t he organization of lott eries. ATG is owned by
the horse racing indust ry and operates bett ings at horse races. "Public benefit
organizat ions" is a collective t erm t hat covers voluntary organizations t hat carry out
work for t he public benefit. The public benefit organizations organize lotteries and
bingo. All Swedish operators were grant ed perm ission a, in 2002, t o use new
technologies, such as the Internet, for t he distribution of lot teries.
3.3 National Legislation
Two Acts of parliam ent governs lott eries in Sweden: The Lot t ery Act and The Casino
Act. The Lott ery Act establishes general regulation of all lott ery activit ies in Sweden.
The Casino Act regulat es casinos operat ing by int ernational rules of gam bling. The
governm ent has granted Svenska Spel a perm it t o arrange casino gam bling, and t he
first opened in June 2001. To t his date, Decem ber 2005, there are four casinos in
the cities of St ockholm , Göt eborg, Malm ö and Sundsvall respectively. A third Act of
interest is the Public Procurem ent Act . However, in its § 2, services supplied by
undert akings entrust ed ex clusive rights, according t o Swedish provisions and in
accordance wit h EC- law, shall be ex cluded from the Act. Consequently, as in section
2.4 Com pet ition Law, it all com es down to whether t he Swedish provisions are
incoherent wit h EC- law. For purpose of t his paper, em phasis is t herefore put on t he
Lottery Act.
3.3.1Lot tery Act
The Lottery Act is forem ost to be applicable on lot teries organised for t he public. By
virt ue of § 3, a lott ery is defined as ”an act ivity where one or more participants may,
with or wit hout a stake, obtain prizes of a higher value t han t hat which each and
every one of the ot her participants may obtain”.
Main principle in § 9 states that lotteries are only to be organised after an obtained
perm it , which according to § 10, only can be obtained if the operat ions can be
assum ed t o be conducted in an appropriat e m anner from a general point of view and
in accordance wit h direct ions, conditions and regulations issued.
As stated in § 15, t he perm it can f urt her only be granted to Swedish legal ent ities
that are non- profit associations that, according to its constitut ion, have the
prom otion of object s that are of public benefit within t he country and that conducts
activities that principally satisfy such object ive.
According to § 27, only state owned gam bling com panies can obtain a perm it t o
arrange gam bling on tok en m achines, that is, only Swedish undertakings.
138
Prop. 1995/ 96:169, p. 12.
33
Chapter III – Swedish fram ework
In § 38, there is a prohibition on prom otion of participation in unlawful lot teries
arranged wit hin t he country or in lotteries outside t he country. Note t hat lotteries
out side t he country do not have t o be unlawf ul, they are per definition ex cluded.
This m eans that only Swedish lot t eries are to be prom ot ed in Sweden. The
preparatory work advocat es the prohibition on prom otion of participation t o be
necessary, as the prohibition of organising lott eries without perm ission ot herwise
would be point less, in order for the current st ate to sustain. 139 Moreover, as the
prohibition in § 15 could be justif ied by overriding reasons, § 27 was viewed in t he
sam e m anner, hence, no am endm ents was t herefore suggested in the preparatory
work.
In accordance t o § 45, t he governm ent has granted request s from ATG, Svenska Spel
and A- Lot t erierna t o organise gam bling over t he Int ernet. The paragraph off ers the
possibility to grant special lottery perm its in other cases and according to ot her
procedures than ot herwise provided by the Lottery Act.
The supervisory body is Lotteriinspektionen (t he Gam bling Board), and its duties
include t he supervision of t he Swedish gam bling m arket, based on t he prot ective
aim s specif ied in t he Lottery Act. Perm its f or lot teries are granted at t he level of a
m unicipalit y, a region or across the whole country. Other perm its are granted by
m unicipalit ies, county councils, the Gam bling Board, or by the governm ent .
By virtue of § 45, it is a crim inal offence to organise a lottery in Sweden wit hout a
perm it , but participat ion is ex cluded from the crim inal of fence. It is also forbidden
to prom ote participation in lott eries arranged outside t he country. Violations m ay
result in fines or im prisonm ent.
3.4 Swedish Gambling Monopoly under Scrutiny
The Com m ission has received several com plaint s regarding t he Swedish legislation
concerning slot m achines and t he m onopoly in general, whereby a form al notice was
subm itted to t he Swedish governm ent. The not ice ex pressed standpoints regarding
the purpose of t he Swedish legislation and it s com patibility with EC- law. 1 40 The
Com m ission considers the Swedish gam bling m onopoly to m ainly have an econom ic
purpose. 14 1
The reply14 2 , given in t he end of 2004, advocated profit m ax im ization as
subordinat ed t o public interest. Notably, t he not ice m ainly refers to slot m achines;
inter alia t he Jack Vegas- and Miss Vegas- m achines and t he public procurem ent of
them . Thus, the entire gam bling legislation was not at scrutiny.
Subsequent ly, all m arketing regarding t he Jack Vegas and Miss Vegas ended in 2001
since it constit uted one of t he m ost addictive form s of gam bling according t o
139
SOU 2000:50, p. 155
140
COM:s ref SG- Greffe(2004).
141
Ibid, p. 17.
142
Fi 2004/ 4965.
34
Chapter III – Swedish fram ework
Folkhäsoinstit utet 14 3 . Svenska Spel has on the ot her hand, m ade large m arketing
investm ents regarding t heir ot her products. In 2003 over SEK 800 m illion were spent
on advertising by the state owned gam bling com panies and even m ore has been
spent since t hen. 14 4 The Swedish governm ent has ex plained t he aggressive m arketing
as necessary in order t o com pet e wit h foreign gam bling com panies. 1 45 Since t he
nat ure of gam bling has becom e border- less, the fact that there ex ists a gam bling
m onopoly has been erased.
3.5 Swedish Case Law on Gambling
There are not m any cases brought before t he national Court s t hat t ouch t he
question of applicabilit y of EC- law on national provisions. Most of t he cases concern
the advertisem ent of a gam bling com pany. A few cases have been brought before
the Courts of Appeal, and none have been referred t o the ECJ, unt il recently.
However, three cases, present ed below, were recently brought bef ore t he Swedish
Suprem e Adm inistrative Court and t hey all f aced the sam e outcom e. Case 5819- 01
is very elucidative whilst case 7919- 01 only ref ers to t he first one as it was first
announced t hat day. The last case has been referred to the ECJ by t he Swedish
Suprem e Court, thus, it is pending.
3.5.1Case 5819- 01
The case concerned an arrangem ent of gam bling offered by SSP Overseas Betting
Lim ited (SSP) in which Wermdö Krog AB was the interm ediary. Werm dö had
previously been subm itt ed a fine by t he Swedish Gambling board. The question was
if § 38 of the Swedish Lot tery Act, t he prohibition of prom oting participation in
foreign lott eries, was compatible with t he Treat y.
It was m ainly a question of whet her national provisions were discrim inating foreign
com panies as t hey, f rom a general point of view, were ex cluded from t he operation
of gam bling and lottery.
Adduced argum ents by SSP and underlying causes were the following:
•
The pract ical effect of the Swedish provisions does not correspond to the
claim ed underlying objectives. It is irrelevant if t he objective is in line wit h EClaw, if it is not practised.
•
Svenska Spel and ATG are investing an estim at ion of SEK 800 m illions each
year in m arket ing.1 46 If t he st ate really safeguards consum ers against gam bling
143
Report from Folkhälsoinst it ut et (2003), p. 51.
144
The inform at ion derives from Swedish Suprem e Adm inistrat ive Court , case num ber 5819- 01, in which
an appreciat ion was m ade. The m arket ing cost s are explicit ly specified in t he annual report of Svenska
Spel but according t o Chief Inform at ion Officer, Andreas Jansson, t he m arket ing cost s of Svenska Spel
am ount t o SEK 250 m illion (sponsoring are not included in t his post ). Direct or of Comm unicat ions, Claes
Tellm an, adds t hat t he cost s were SEK 330 m illions before discount s and t hat t he confidential discount s
are of large proport ions.
145
Fi 2004/ 4965, p. 6.
146
Swedish Suprem e Adm inist rat ive Court , 5819- 01.
35
Chapter III – Swedish fram ework
addiction, then it should be addressed in t he sam e way as alcohol and tobacco,
and advertisem ent should be prohibit ed for all operators.
•
As a result of the aforem ent ioned, Sweden has m ore addictions am ong youths
than ot her European count ries. It enhances t he im age of the Swedish state of
not giving priority to consum er interest but to benefit the public purse.
•
ATG has obtained a perm it to prom ote participat ion in lotteries organised
abroad. The perm ission is conditioned wit h allied foreign organizations t o
receive
equivalent
perm issions.
Therefore,
it
appears
as
the
Swedish
governm ent only perm it s foreign com panies as long as foreign consum ers
could be assum ed t o cover the dom estic loss derived from playing abroad.
•
Overall, the Swedish st ate is represent ing a politic that contributes t o an
increased num ber of gam bling products wit h t he objective t o benefit t he public
purse, whereby no overriding reasons can be applicable.
The Court followed the Swedish st ate’ s argum ents and asserted t hat Gam belli did
not affect t he Swedish case law as adduced by SSP. Gam belli has t o be viewed in t he
light of t he Italian fram ework, partly as the legislative change was m ade to protect
certain private operators as others were prohibit ed to continue, partly due to Italian
policy conducted whereas a substantial increase was m ade in t he num ber of gam es
of fered.
The m ost cent ral question, acknowledged by t he Court, was whet her t he objectives
were real. Put m ore concret e, whet her restrictive policy pract ised by t he Mem ber
State is a question of public interest, and t herefore em braced by overriding reasons,
or a quest ion of protecting a m onopoly from foreign com petit ors in order to benefit
the public purse. SSP has part icularly adduced ex tensive m ark eting, continuous
introduction of new products and t he fact that gam bling is increasing constantly.
The Court did conclude that t he m arket ing was ex tensive and intensive, and
therefore, consum ers were “incit ed and encouraged to participate in lott eries, gam es
of chance and bet t ing ”14 7 . However, in order f or the Swedish m easures to be
incom patible wit h EC- law, t he actions m ust be “to t he financial benefit of the public
purse”14 8 . Albeit , it would be naive to t hink that t he econom ical contribution plays a
m inor im portance, however, it could not be tak en for grant ed t hat it was the only or
com pletely dom inating objective. 14 9
Further t he Court stat ed the crit eria of proportionalit y to play a less prom inent role
in perspective of EC- law than adduced by SSP. When several alternatives are at hand,
it lies within t he discretionary assessm ent of t he Mem ber Stat e t o choose which
alternative, as long as it is not disproportionat e considering t he aim ed objective
(Läärä paragraph 39 and Gambelli paragraph 75). 150 Considering t he circum stances,
147
C- 243/ 01, Gambelli , paragraph 69.
148
Ibid.
149
Swedish Suprem e Adm inist rat ive Court , 5819- 01, p. 500.
150
Ibid, p. 499.
36
Chapter III – Swedish fram ework
the legislat or could not be invoked to, wit h regards t o a proportionalit y test, choose
a less restrictive m odel.
By ref erring to Läärä paragraph 37 and Zenatt i paragraph 35, t he Court em phasized
that even though gam es in issue were not totally prohibited it could not serve as
evidence of that t he nat ional legislat ion was not in realit y intended to achieve t he
object ives of public interest. And by t he vast am ount of m oney involved, risk of
attracting crim inality and fraud was considered as evidently high.
As far as the prohibition in § 38 is concerned, the Court acknowledged the
unf ort unat e wording. Thus, it clarified t hat according to preparat ory work 15 1 , no
discrim inat ion was int ended since the m easure is applicable on both Swedish and
foreign lott eries for which a perm it had not been obtained.
As the ECJ delegated discretionary assessm ent to the national Courts which
com prised an obligation to, from tim e to t im e, ex am ine if practical application was
in accordance wit h EC- law, the Court acknowledged t he outcom e to m ay vary over
tim e. The Court t herefore rem arked t he governm ent adoption of a directive15 2 as this
will result in a proposal for legislative adaptation to the developm ent of EC- law, and
in part icular to recent case law.
3.5.2Case 7119- 01
In this case the question was whether the prohibition of prom ot ing participation in
foreign lott eries could be applicable to the circumstances and if the provisions were
applicable to EC- law.
A banner had been placed on a website by person A.B. whereby visitors were
directed to SSP’ s website. A.B. had received reim bursem ent for t his act ion which lead
the Court to assent previous verdicts by lower Courts and t he gam bling board, by
which t he Swedish provisions were found to be in accordance wit h EC- law.
3.5.3Case 3841- 04
Ladbrokes had been refused an application, by the Swedish government, t o organize
gambling. The quest ion was whet her t he government had ref used t he application
correct ly, in accordance with EC- law.
Ladbrokes wanted to obtain a perm it from t he Swedish governm ent t o organize
gam bling, but was ref used on grounds t hat surplus shall accrue t o public int erest.
According t o Gam belli , t he raising of m oney for good causes cannot in it self justify a
restrictive policy, whereby Ladbrokes quest ioned the reason for the rejection.
The Swedish Suprem e Adm inistrative Court did acknowledge t he unlucky wording of
the refusal in its deceptiveness and im perfection. The decision can t herefore be
considered as incorrect . However, the outcom e in the decision is not cont rary to the
151
152
Prop. 1998/ 99:29 p. 11 f.
Governm ent direct ive 2004:76, which by t he way was brought t o a st andst ill in Decem ber, 2005
(Dagens Indust ri 2005- 12- 09).
37
Chapter III – Swedish fram ework
Lottery Act or EC- law according to hitherto case law. Thus, the governm ent’ s
decision should not be reversed based upon t he inadequate ex planatory statem ent.
3.5.4Case Ö 4474- 04
Unibet has questioned t he prohibit ion of promotion of participation and sued the
Swedish state for loss of income due t o t he maintaining of the prohibit ion. For the
first time, the Swedish Supreme Court has referred a gambling case to the ECJ.
In March 2003, Unibet was given a leave to appeal 15 3 in the Swedish Suprem e Court
regarding t he quest ion t o plead t he cause of confirm ation whet her cert ain Swedish
provisions concerning lotteries are incoherent wit h t he freedom to provide services
according t o article 49 of the Treaty, especially t he m ark eting. The Swedish Court of
Appeal had previously dism issed the claim on t he plea, based on that a cause of
confirm ation could not be considered perm itt ed by EC- law. 15 4 However, t he Swedish
Suprem e Court has ref erred t he case t o t he ECJ in clearance of the following
questions:
1. partly, if EC- law constit utes a right for t he com panies to a real t rial of t heir
claim s regarding int erlocutory legal prot ection by the proclam ation of nonapplicability of Swedish provisions,
2. partly, if EC- law, t heref ore regarding t hese int erlocutory claim s, im plies an
assessm ent according t o national interlocut ory provisions or crit erions
provided by EC- law,
3. and partly, if , so, which are these EC- criterions.
3.6 Predicaments of the Swedish Gambling Monopoly –
Gam bling Companies v. the State
In t he following sect ion, the argum ents regarding the Swedish gam bling m onopoly
are divided in t hree categories: m arket activities, new products and legislative
m easures. Each cat egory will be elucidat ed from bot h sides. All argum ent s adduced
by the gam bling com panies will be followed by those of t he Swedish st ate.
3.6.1Market Activities
A f irst group of argum ents concern m arket activit ies and are based on stat e incom es
and its drastic increase as a result from aggressive marketing . More t han SEK 900
m illions was spent last year (2004). 15 5 ATG and Svenska Spel are m arketing
them selves in several m edia by financing Channel 75 and the show “Spelbolaget ” in
Channel TV4+ , m ain sponsoring t he t wo highest divisions in Swedish f ootball, ice
153
Swedish Suprem e Court , Ö 752- 05.
154
Swedish Court of Appeal, Ö 9251- 04.
155
Market ing cost s for Svenska Spel were probably larger during 2004 t han for 2005 since it has been
adduced t hat t he m arket ing cost s have been decreased during 2005, sim ilar t o t he levels of 2001, which
am ount s to SEK 600 m illions according t o t he report from Folkhälsoinst it ut et , (2003) p. 57. The
m arket ing cost s of ATG were SEK 310 m illions, according t o t he annual report of ATG (2004).
Consequent ly, t he t ot al market ing cost s am ount t o m ore t han SEK 900 m illions.
38
Chapter III – Swedish fram ework
hockey and t he Swedish national handball t eam . Overall it has been concluded t hat
the m arketing efforts m ade by the state are of an aggressive m anner. 15 6 The fact that
the state did invest large am ounts in m arketing prior to 2001, when m arketing of
foreign lott eries were alm ost non- ex ist ent 157 , is incoherent wit h the intent ions
adduced by the stat e.
New forms of distribution have cont inuously m ade gam bling even m ore accessible,
inter alia through grocery stores15 8 (3 800 agent s), Int ernet and m obile phones.
Svenska Spel’ s total of 6 300 agents, whereby 3 400 are bett ing agents, and ATG’ s
total of 2 030 agent s have steadily increased during the years. 159 Further, the control
is not rigorous as m erely 200 controls were conducted on t he total of 2 200 sit uated
localities (7 100 gam bling m achines). During 2004 and 2003, 624 and 598 controls
were conduct ed respectively. 1 60
The fact is that Sweden has a gambling addiction am ount ing to 2 percent (whereby
0,6 percent are pat hological gam blers), while Britain despite t heir com petitive
m arket, albeit very restrictive m arketing, only am ounts to 1,2 percent. In Britain, for
ex am ple, m arketing t hrough the m edia of t elevision is prohibit ed f or gam bling
com panies. 16 1
Great sports contribution is em phasized by the state as a cogent reason t o keep t he
m onopoly. However, facts show that only 25 percent, of Svenska Spel’ s t otal
earnings, for 2004 of SEK 4,8 billions, accrued to the sports, constituting m erely 1,2
billion 1 62 . Furtherm ore, t he governm ent has earm arked SEK 1,4 billions for 2005 16 3 ,
but it is still a poorly contribution and decept ive since it is pretended t o be m ore
substantial in the public debat e. Attention should also be directed to t he f act that
heavily discounted 1 64 sponsoring is included in t he SEK 1,2 billion- post, which in
reality const it utes m arketing of state activities. In an open m arket , im plying t he
ex istence of m ore effect ive com panies, the t ot al earnings would be f ar great er.
Hence, the sam e am ount of sponsorship could accrue to sport s from t he gam bling
com panies, especially as there would be no room for heavily discount s.
Another deceptive fact is that m erely 14 m illion is earm arked for preventing
gam bling addiction, sum m ing up to 0,46 per t housand of t he gam bling m onopoly’ s
turnover. Cont ribution in the work against gam bling addict ion is not even
156
Concluded in Swedish Suprem e Adm inist rat ive Court , 5819- 01, and even in early preparat ory work
SOU 1992:130 p. 186.
157
In 2001, all foreign gam bling com panies t oget her had m arket ing cost s am ount ing t o SEK 4,1 m illions
while t he st at e’ s am ount ed t o SEK 450 m illions, according t o report from Folkhälsoinst it ut et , (2003), p.
57 and 59.
158
ATG’ s product Harry Boy can for ex ample be purchased in ICA st ores around t he country, according t o
annual report of ATG, (2004).
159
See www.svenskaspel.se and www.at g.se
160
2005/ 06:KrU3.
161
Resum é, (2005- 11- 30).
162
Annual report of Svenska spel, (2004).
163
Budget proposal for 2005.
164
Direct or of com m unicat ions, Claes Tellm an, confirm s t hat t he discount s are of large proport ions, but
were not willing t o share t he inform at ion in det ails.
39
Chapter III – Swedish fram ework
com parable t o contributions against alcohol and narcotic addictions, albeit t heir
greater social repercussions. 165 Approx im at ely 100 000 have a gam bling problem ,
while approx im at ely 25 000 are pathological, that is, having an addiction. This can
be com pared to the estim at ion of 16 000 and 26 000 abusers of alcohol and
narcotics respectively. 1 66 The am ounts invested in the work against these addict ions
are ten folded the am ounts invest ed in the work against gam bling addictions.
The fusion between Tipstjänst and Penninglott eriet form ing Svenska Spel, instead of
the proposed transference of Tipstjänst to t he public benefit organizat ions, has
evident ly shown the disinclination t o let the public receive all gam bling earnings. 16 7
Swedish gam bling com panies168 have conciliat ed on ethical guidelines regarding
m arketing, but even ethical m ark eting has as it s objective to encourage and incit e
gam bling; therefore the Swedish state’ s inducem ent is an air of ridicule.
The Swedish stat e is of anot her opinion in the question of t he m arket activities.
Aggressive m arketing and new form s of distribut ion are upheld as a response to t he
internat ional com petition that distorts the Swedish gam bling m onopoly. These
activities cannot serve as evidence for underm ining t he adduced m ain objective by
the stat e. Reasonably, in order to canalise the ex ist ing gam bling dem and, one
cannot refuse t he com panies, grant ed a license, from act ively introducing new
product s, conduct m ark eting efforts or offer new form s of distribution as these
safeguards
a
higher
em bezzlem ent. 1 69
consum er
Moreover,
protection
m arketing
advertisem ents have been reduced
1 70
costs
and
for
m inim izes
the
outdoor-
and
risks
of
t elevision
by 20 percent and are back at the levels of
2001. 1 71 The im portance of restrictive m arket ing has been ex pressed by the
governm ent in proposition 2002/ 03:93 p. 23. Rigorous controls have also result ed
in withdrawals of alm ost 200 token m achines from restaurants where gam bling has
becom e a too dom inating elem ent. 172
A free m arket would render a worse statistic concerning t he gam bling addiction in
Sweden. Contrary to t he statistic above, official studies have shown the opposite t o
what t he gam bling com panies are adducing. 17 3
The contribution is of vital im portance in t he public interest and a deregulation of
the gam bling m arket would probably lead to deficits and ruin m any of the sport
organizat ions around t he country. 174 However, t his object ive is secondary in relation
to t he public interest, but would not even be an objective in an open m arket as t he
165
See Appendix D – Subvent ion of t he work against gambling addict ion in relat ion t o m easures
prevent ing alcohol and narcot ics.
166
Report from Folkhälsoinst it ut et , (2003), p. 19.
167
Prop. 1993/ 94:243.
168
Svenska Spel, ATG, Folkspel, A- Lot t erierna, IOGT- NTO- lot t erierna (Spero) och Svebico.
169
Fi2004/ 4965 p. 6.
170
Annual report of Svenska Spel, (2004).
171
The level of 2001 was SEK 600 m illions according t o t he report from Folkhälsoinst it ut et , (2003), p. 57.
172
Fi2004/ 4965 p. 6.
173
Affärsvärlden, (2005- 11- 24).
174
SOU 1992:130 p. 178.
40
Chapter III – Swedish fram ework
surplus only would accrue to shareholders. Moreover, a poll 1 75 has shown that m ore
than 46 percent t hink that Svenska Spel’ s sports contribut ion is less than SEK 10
m illions, while 86 percent guess that it is less than SEK 1 billion. This serves as an
evidence of that Svenska Spel’ s m arketing is neither poorly nor deceptive in relation
to the perception of the general public.
It is im portant t o bear in m ind t hat it is not the responsibility of Svenska Spel t o treat
people wit h gam bling problem s, but to work preventative and offer consum ers the
possibility to control t heir gam bling. To com pare gam bling wit h alcohol or narcotics
is not fair since t he latter’ s greater repercussions. For the year 2005, SEK 14 m illions
have been earm arked which should be com pared to t he am ounts contribut ed by t he
foreign gam bling com panies and not with t he turnover of Svenska Spel.
Regarding t he f usion form ing Svenska Spel, there were a num ber of reasons,
whereas gaining large- scale benefit s were one of the m ain objectives. A fusion
would also result in decreased m arketing as only one com pany would m arket its
product s, instead of two. 176
The et hical guidelines, conciliated by the Swedish gam bling operat ors, are m ore far
reaching t han any ot her general consum er protection as f ar as m arketing is
concerned, whereby it serves its objective satisfyingly.
3.6.2New Products
A second group of argum ents derive from t he m anner in which new product s have
been launched. At present, Svenska Spel offers m ore than 20 products while ATG
of fers at least 10 products, see Appendix B and C. The aggressive increase of offers
are represent ed by m ore gam bling opport unities f or each product (Jok er, Kung Keno,
Lotto et cet era, see Appendix B and C), but also of shorter int ervals between bet and
payback, and the lat t er has according t o research proven to be t he m ost addictive
form of gam bling.1 77 Other products that have been crit icised are Jack Vegas and
Miss Vegas, introduced in t he 1990s, since t heir close equivalent; t he one arm ed
bandits were abolished in 1978 for being too addictive. The opening of t he
internat ional
casinos Cosm opol
serves anot her
m easure in contrast
to t he
conclusions that quick gam bling and gam bling in casino environm ent are two of the
m ost addictive form s of gam bling. Furt her, recently t he Swedish governm ent gave
Svenska Spel perm ission to organize Internet pok er 178 despit e t he dissuasion of
Folkhälsoinst it utet 179 - to deny its addictive character would be ignorant. By this,
Sweden will be t he first state lott ery to offer online poker. The perm it is, however,
com bined with conditions in respect of its addictive charact er. According t o Douglas
175
Annual report of Svenska Spel, (2004).
176
See Prop. 1993/ 94:243.
177
Report from Folkhälsoinst it ut et , (2003), p. 51.
178
Press release, Depart m ent of Finance, (2005- 11- 24).
179
The Opinion on Lett er of Referral, Folkhälsoinst it ut et , (2005).
41
Chapter III – Swedish fram ework
Roos (CEO of Ladbrok es), the restrictions im posed on Svenska Spel could easily be
com plied by the gam bling com panies, if t hey were given perm ission t o operate. 18 0
An argued fact behind t he prohibition in § 38 is t o obstruct foreign based gam bling,
since Swedish fram ework cannot be im posed on t hem . Not withstanding this, t he
ex istence of int ernational co operations enables Swedish consum ers t o place bets in
foreign countries, inter alia, regarding Vikinglott o 18 1 and ATG182 . Therefore, Svenska
Spel and ATG are m arketing gam bling act ivities organised abroad, but this privilege
is solely reserved t o t hem . Int ernat ional horse bett ing am ounts a t urnover of SEK
606 m illions18 3 whereby SEK 537 m illions derive from bets placed in Sweden, which
m akes it ex t rem ely prof it able for ATG to run the internat ional pool of bett ing.
New products are just ified by the Swedish state in the sam e way as the aggressive
m arketing, which is m ainly to enable to face the internat ional com petition and the
borderless character that gam bling has becom e. One of the assignm ents of Svenska
Spel, im bedded in the perm ission granted by the governm ent, is to m eet ex isting
gam bling dem ands of Swedish consum ers, whereby it is inevitable not t o offer new
product s or to introduce int ernational casinos. A gam bling responsibilit y policy was
adopt ed t hroughout t he group of com panies during 2004 and a specific staff
departm ent was appoint ed called “Sam hälle och ansvar” (Society and responsibility).
Concrete m easures taken com prise of t he enforcem ent of stake lim itations, the
gam bling card, volunt arily suspensions, registration of personal gam bling budget,
the possibility to f reeze accounts, lim ited opening hours and t he offering of less
aggressive products as an alt ernative to ex isting products offers. So called sensitive
gam es are im posed an age lim it, gam bling on credit is being counteracted while
healt hy gam bling environm ents are being prom oted. Every gam bling agent, as well
as every lot tery ticket , has inform ation wit h t he support
lines off ered by
Folkhälsoinst it utet. Regarding casinos, perm ission granted by t he governm ent
should clearly ex press a restrictive m arketing of the casinos. 1 84 In addition, the
negative effects of the public health is suppressed by the state by (a) keeping the
level of pay back down 1 85 as well as (b) t he num ber of gam bling agents. Int ernet
poker has, by the way, been com bined wit h several conditions in order to secure
consum er int erests.
3.6.3Legislative Measures
The t hird group of argum ents com prise of legislative m easures, in particular t he
crim inalisation of , as stated in § 54, the prohibition of prom oting participation in
180
Kuriren, (2005- 12- 01).
181
Collaborat ion wit h Nordic count ries and Est onia.
182
Collaborat ion wit h Norwegian gam bling com pany Norsk Rikst ot o, but V75 has been launched in
Holland, Germ any, Aust ria and Est onia, according t o t he annual report of ATG, (2004).
183
Annual report of ATG, (2004)
184
Prop. 1998/ 99:80 p. 25.
185
(1) St rykt ipset and Målt ipset m ax im um 50 %, (2) Lot t o m ax im um 45 %, (3) Number gam es wit h daily or
m ore frequent draws m ax im um 55 %, (4) Ot her num ber gam es m ax im um 45 %, (5) Oddset m ax im um 85
%, (5) ATG has a perm it of 65- 85 % m ax im um pay back.
42
Chapter III – Swedish fram ework
foreign lot teries by virtue of § 38, which was rem oved in the Act of 1994, but lat er
reintroduced and current ly valid. As stated before, these provisions do not appear t o
apply to the state as the internat ional co operations are allowed t o ex ist. In t he light
of Gam belli , the Com m ission has lodged a com plaint stating the crim inal offence in
§ 54 of t he Lott ery act not to be proportional in relation to its objective. 186
Moreover, § 27 in t he Lottery Act discrim inat es foreign subjects as only state owned
com panies can be grant ed perm ission to organise gam bling on token m achines. 1 87 A
foreign com pany owned by the Swedish state would, however appear to, lose its
foreign character.
The ex istence of t he Lottery Act has been assert ed by the state as sufficient in t he
work to counteract the econom ical, social and personal harm f ul eff ects of
gam bling 188 . Despite this, risks of f rauds and consum ers int erest are only being
described in general t erm s and not put in a concrete form . 18 9 It appears as the state
presum es foreign organisers of pursuing fraudulent behaviour, but t here are no
em pirical proofs that such behaviour occurs or would occur. Moreover, it would go
against any m arket econom ic principle to believe that such behaviour would be able
to continue to ex ist in a com pet itive environm ent , partly due to legal aspects, part ly
due to t he badwill it would cause. Theref ore it cannot be justified to restrict all
com panies on this ground.
More of a lack of a legislat ive m easure is t he negligence of t he Public Procurem ent
Act. According to t he t he st at e- run Public Procurem ent Authority, (Näm nden för
Offentlig Upphandling), Svenska Spel m ust abide by the Swedish Public Procurem ent
Act. Nevertheless, Svenska Spel has always decided not to abide by the Act.
In conclusion, t here are possibilities for the state to control the gam bling and lottery
m arket without ex cluding other subjects than non profit associations. Num erous of
areas ex ist where private undertakings are allowed to provide services and products,
despit e t he harm f ul eff ects it m ight cause from tim e to tim e. In t he end, it is
evident ly shown t hat t he prim ary reason, for keeping t he gam bling m onopoly, is
econom ical.
In t he area of legislative m easures, the Swedish state relies on the Swedish Suprem e
Adm inistrative Court, since it has concluded § 38 of not being in quarrel with EC- law
and § 54 was considered proportional t o its objective. In addition, Gam belli is not
applicable to the Swedish m easures since t here are too vast discrepancies between
the m easures in question. The reason f or which a thorough test of proportionality
was assigned in Gambelli was due to ECJ’ s doubtf ulness whet her t he It alian
m easures could be justified by overriding reasons of public interest. 19 0
186
COM:s ref SG- Greffe(2004).
187
Ibid, p. 24.
188
St at e defence docum ent T 2417/ 03.
189
See prop. 2002/ 03:93 p.1, SOU 1992:130 p. 99.
190
Fi2004/ 4965, p. 9.
43
Chapter III – Swedish fram ework
As far as § 27 is concerned, it cannot be considered t o discrim inate. The wording of
the paragraph, and t he practise of t he sam e19 1 , is applicable without distinction. The
ex clusion em braces all com m ercial operators, dom est ic, as well as, foreign
applicants.
Frauds and ot her crim inal act ivit ies are com m only known t o be attracted t o
gam bling m arkets due t o the vast am ount of m oney involved. In a debat e article19 2 ,
Bosse Ringholm (Swedish m inist er of finance) em phasized t hat “risks of fraud and
ot her type of criminalit y is tackled by, partly police m easurements, partly legal
framework stating t hat all gambling activities should be conducted by Swedish
undert akings controlled by the state”. 19 3
The Public Procurement Act is not applicable t o Svenska Spel’ s operat ions. Suppliers
considered neglected have the possibilit y to refer the question t o the national Courts,
which have the authority t o decide how t he Act should be interpreted. In the end, it is a
question for the ECJ to consider. 19 4
Conclusion of t he st ate, is that the gam bling m onopoly is not breaching EC- law. The
object ive of the m onopoly is to supply a healt hy and secure gam bling m arket where
social considerat ions are of priority, but at the sam e tim e, where t he variety of
gam bling dem ands is satisfied. Therefore, t he m arket is regulat ed and activities are
privileged t o a few num ber com panies without any profit interests. The surplus shall
accrue t o public int erest such as child- and yout h organizations, sports and other
non- governm ental organizations, horse racing industry, culture and public purse. 1 95
Also, in recent case law the Swedish Suprem e Adm inistrative Court concluded
Swedish legislation to be coherent with EC- law. 1 96
191
This am endm ent was proposed in prop. 1996/ 97:7, p. 148 and comm ent ed as it is “just an adjust m ent
reflect ing t oday’ s ownership of t he gambling com panies.
192
Aft onbladet , (2004- 01- 13).
193
Aut hor’ s translat ion.
194
2005/ 06:KrU3.
195
See prop. 1995/ 96:169, p. 11, prop. 1998/ 99:29, p. 7, prop. 1998/ 99:80, p. 21, prop. 2001/ 02:47, p.
12, prop. 2001/ 02:153, p. 10 and 15 and also prop. 2002/ 03:93, p. 13 and 15 and t he Annual report of
Svenska Spel, (2004).
196
Swedish Suprem e Adm inist rat ive Court , 5819- 01.
44
Chapter IV – Analysis
CHAPTER IV
Analysis
4.1 Applicability of an Activity with EC- law
In t his chapter, an analysis will be done by an initial outline on how the applicability
of an activity, in perspective of EC- law, is conducted, by looking at five questions.
This section will elucidat e its relevance, as well as im pact, and will be ex plained in
the following headlines. The structure for t he analysis derives f rom , the aut hor and
attorney at Bar of Brussels, Keuleers’ work. 1 97 The first quest ion derives f rom the
nat ure of t he Treaty, t he second from Schindler , the t hird, fourt h and fift h questions
derive from Gebhard . 198
1. Is the activity econom ic?
2. Is the activity applicable to goods or services?
3. Is the restriction discrim inatory?
4. Can t he restriction be justified?
5. Is the restriction necessary and proportionat e?
Furtherm ore, European case law, especially Gam belli will be elucidated wit h a
clarifying aim . Swedish case law and its legislation will also be analyzed as well as
the predicam ents of the Swedish fram ework . In the end, the questions of research
for this report will be addressed.
4.1.1Does t he Regulation Concerned Relate to an Econom ic
Activit y?
Even if t he European integration em braces m ore than econom ical fields, it is of
param ount im portance t o ex am ine if a regulat ion relates to an econom ic activity,
since t he Treaty only applies to econom ic activit ies, see sect ion 2.2 The Core of t he
197
Keuleers, E. (2003).
198
Bernit z, U. (2004), p. 452.
45
Chapter IV – Analysis
European Com m unity. In early EC case law, som e Mem ber Stat es advocated
gam bling of not being an econom ic activity 199 , since lotteries have the character of
relax ation and am usem ent, and not an econom ic objective as it is based on chance.
By virt ue of this, ECJ would have been prevented to inquire whet her national
restrictions were in breach of EC- law. However, ECJ held t hat it was evident from the
facts of the cases, as they were presented t o the Court, that t he econom ic
significance of gam bling activities was considerable in all the Mem ber States. It
rem arked, by ref erring t o case 13/ 76 (Doná), t hat im port of goods or providence of
services in ex change for rem uneration shall be considered as an econom ic activity as
stated in t he Treaty. The elem ents of chance, relax at ion and am usem ent did not
prevent t he activity from being an econom ic. 20 0
4.1.2Does the Econom ic Act ivity Relate to the Free Provision of
Services or Goods?
It is essential to, albeit not very easy to m ake, a distinction between goods and
services, as referred t o in section 2.5 Free Movem ent of Services and section 2.9.1
Schindler.
In
t he
latt er
section,
ECJ considered
the
activities
of
sending
advertisem ents and application form s as specific st eps in the organization of a
lottery, which could not as such be considered as the final objective. Therefore, the
activities were considered t o fall wit hin the scope of services, and not of goods. ECJ
determ ined the activity by look ing at t he nature of its principal activity, according to
the principle “accessorium sequit ur”. 2 01 By not considering gam bling in t he scope of
goods, the doctrine of Cassis de Dijon and article 31 of the Treaty do not apply.
Gam bling, as a service, distinguish itself from a state m onopoly of a com m ercial
character, as article 31 of the Treaty aim s at prot ecting suppliers of goods. In t he
area of gam bling, the suppliers are lim ited due to t he nat ure of gam bling as it is
provided as a service t o the end consum er, and not as a physical product. Moreover,
during t he last decade, gam bling has evolved t o be provided virt ually as well, which
has m ade its nature even clearer and assignable to the nat ure of a service.
Despite t hat goods were involved in bot h the Schindler and Läärä cases, ECJ
considered t he activities of being provided for rem uneration by an operat or t o
enable persons to part icipate in a gam e of chance with t he hope of winning. Thus,
by virtue of article 50, they had to be considered as services. Furtherm ore, in Läärä,
ECJ stated t hat “(I)n t hose circum stances, gam es consisting of the use, in return from
money payment, of slot machines such as those at issue in t he main proceedings,
199
C- 275/ 92, Schindler , paragraph 16.
200
C- 275/ 92, Schindler , paragraph 19.
201
Ex pressed in case law, for ex am ple, C- 368/ 95, Fam iliapress, Opinion of Advocat e General Tesauro.
The case concerned compet it ions published in m agazines in t he form of crosswords or puzzles. As t he
Court st at ed, part icularly in paragraph 23 of t hat judgm ent , such gam es, organised only on a sm all scale
and for insignificant st akes, do not const it ut e an econom ic act ivit y in t heir own right but are m erely one
aspect of t he edit orial cont ent of a m agazine.
46
Chapter IV – Analysis
must be regarded as gambling, which is comparable to the lotteries form ing t he
subject of the Schindler judgment ”. 20 2
Contrary to Schindler , the Läärä slot m achines them selves were goods in the strict
m eaning of article 30 of t he Treat y. However, as the Court lacked suf ficient
inform ation in relation to t he effects of the adopt ed restrictive m easure, it was
forced to conclude t o be unable to answer t he question whether t he nat ional
m easure was incom patible with article 30 or not . 20 3
4.1.3If there is a Restrict ion in Place, is it Discrim inating?
Mem ber States are only allowed to im pose and m aintain rest rict ions provided that no
dist inct ion is m ade on grounds of nationality or residence2 04 , according to article 49
of the Treaty. Therefore, besides its obvious purpose to prohibit direct and indirect
discrim inat ion of foreign services, it also serves the purpose of the adopt ion of nondiscrim inat ory rules t o f oreign services. 20 5 In Saeger , ECJ stated t hat “article 49 of the
Treaty requires not only the elim ination of all discrimination against a person
providing services on t he ground of his nat ionality but also t he abolition of any
restriction, even if it applies without distinction t o national providers of services and
to t hose of ot her Member States, when it is liable to prohibit or otherwise impede
the activit ies of a provider of services established in another Member State where he
lawf ully provides similar services”20 6 .
None of t he regulations in Schindler , Läärä or Zenatti , were discrim inatory on
grounds of nationality. However in Gam belli , ECJ held t hat “(I)t is for t he national
court t o consider whet her t he manner in which t he conditions for submitting
invitat ions to tender f or licences to organise bet s on sport ing events are laid down
enables t hem in practice to be met more easily by Italian operators t han by foreign
operat ors. If so, those conditions do not satisfy the requirement of nondiscrim inat ion ”. 2 07
4.1.4Is t he Restriction Justified?
A non- discrim inating rest rictive m easure has to be justified by derogations provided
in t he Treaty. Article 46 of the Treaty provides derogations on grounds of public
policy, public security or public health. These are of socio- econom ic reasons2 08 and
202
C- 124/ 97, Läärä, paragraph 18.
203
Ibid, paragraph 23.
204
Bernit z, U. (2004), p. 452 and Meyrowit ch, A., Allrot h, E. and Het t ne, J. (2005), p. 54.
Case 110/ 78, Van Wesemael ; case 279/ 80, Webb , Opinion of Advocat e General Slynn; Case C- 154/ 89,
Com mission/ France, Opinion of Advocat e General Lenz and Case C- 180/ 89, Comm ission/ It aly.
206 Case C- 76/ 90, Saeger , Opinion of Advocat e General Jacobs, paragraph 12.
207 C- 243/ 01, Gambelli , paragraph 71.
208 Meyrowit ch, A., Allrot h, E. and Het t ne, J. (2005), p. 67.
205
47
Chapter IV – Analysis
shall be viewed holistically, in t hat t hey shall all be taken int o account , according t o
case law 2 09 .
Cogent reasons ex pressed by t he ECJ are to lim it the ex ploitation of hum an passion
for gam bling; curtail t he negative social and financial effects of ex cessive gam bling;
prevent crim inal behaviour as fraud, m oney laundering and even tax evasion.2 10
Notably, the allocation of profit from gam bling activities to charity or ot her public
interest purposes is not without relevance, but cannot serve as a cogent reason. 21 1
Consequent ly, the provided freedom s within t he EU m ay be overridden t o safeguard
the wellbeing of consum ers, in particular the recipients of a service, and m ore
generally to guarantee order in societ y 21 2 . In Schindler, where t hese argum ents were
developed for the first t im e in connection with gam bling services, t he Court
concluded on t his point that in t he absence of any EC legislat ion, it was up to each
of t he Mem ber States to consider what should be appropriat e to protect their
internal social order 21 3 .
Further, it seem s as if m any of cogent reasons are presum ed by the Court to be
applicable in all Mem ber States and wit hout any need of elaborat ion. However, by
virt ue of m ost recent case law it seem s as t he burden of proof m ay have shift ed
slightly, see section 4.3.2 A Slight Shift in the Burden of Proof .
4.1.5Is t he Restriction Necessary and Proportionate?
Early case law established that any m easure adopted, falling within the scope of
derogations, has to be necessary, in order t o guarantee t he achievem ent of t he
intended aim , and proport ionat e, for ex am ple not to go further than necessary.2 14
In t he first gam bling case, the Schindler case, Advocat e General Gulm ann m ade
following statem ent reflecting the crit erions of necessity and proportionality: “(T)he
decisive questions are t hus in m y view in any event whet her t he int erest of society
invoked by t he St ates are so f undam ental t hat in t he area in question they can justify
the ex isting restrictions and whet her the rules in question are objectively necessary
in order to achieve t he objective pursued and are also reasonable in relat ion to that
object ive”21 5 .
Advocat e General Gulm ann did however conclude that it was not possible t o identify
less restrictive m easures for achieving t he pursued objectives considering the
209
C- 275/ 92, Schindler , paragraph 58. However, Advocat e General Gulm ann could not preclude t hat
t hese argum ent s when considered separat ely, would not just ify t he restrict ion im posed. Schindler,
opinion of Advocat e General Gulm ann, paragraph 92.
210
Bernit z, U., Kjellgren, A. (2002), p. 230 and Bernit z, U. (2004), p. 460.
211
C- 67/ 98, Zenatti , paragraph 36.
Joined cases 110/ 78 and 111/ 78, Van Wesemael & Follachio , paragraph 28; Case 220/ 83
Com mission/ France, paragraph 20; and Case 15/ 78, Koest ler , paragraph 5.
213 C- 275/ 92, Schindler , paragraph 61; Schindler, opinion of A.G. Gulm ann, paragraphs 101- 102.
214 Joined cases C- 369/ 96 and C- 376/ 96, Arblade & Leloup , paragraph 33; Case C- 58/ 98, Corsten ,
paragraph 33; Case C- 361/ 98, It aly v Commission , paragraph 33; Case C- 228/ 89, Gouda, paragraphs
13- 15.
215 C- 275/ 92, Schindler , Opinion of Advocat e General Gulmann, paragraph 79.
212
48
Chapter IV – Analysis
unk nown im plications of an open and com petitive gam ing sector 21 6 . Advocat e
General Fennelly added in Zenatt i that it was for the national Court t o consider
whether those two condit ions were m et 2 17 . In Läärä, Advocate General La Pergola
concluded t he Finish law, by granting RAY ex clusive right on gam bling m achines,
not t o m eet t he crit erion of proportionality. But t he Court saw it different ly and did
not follow his opinion. Interestingly, in Gam belli t he Court concluded, sim ilarly as in
Zenatti , t hat “(I)t is for the national court t o determine whet her t he national
legislation, taking account of the detailed rules f or its application, actually serves the
aim s which m ight justify it, and whet her the restrictions it im poses are
disproportionate in the light of t hose aims”21 8 . More int erest ingly, Advocat e General
Alber did not consider the quest ions to lie wit hin t he discretional power of the
Mem ber Stat e since t he objective required for a justification was not cogent due t o
inconsistent politics and lack of overriding reasons of general int erest. It can only be
disproportional with a pain of crim inal penalties, Alber concluded.
Contrary to Gambelli and the Italian provisions, § 54 of the Swedish Lot tery Act only
considers the organizer of a lottery as unlawf ul and not t he participant. Thus, the
fram ework s and the circum stances are not easily com parable bet ween Sweden and
Italy vis- à- vis Gambelli .
It cannot be stressed enough that two dif ferent approaches, bot h can be
proportionate in relation to the objective pursued and t herefore necessary as well.2 19
Thus, one Mem ber Stat e could prohibit cert ain gam bling activit ies, while anot her
Mem ber State could advocate a less restrictive regim e, for ex am ple by granting a
lim ited num ber of licenses - and bot h m easures could be cogent. Nonet heless, in
order to invok e, for ex am ple, the prot ection of consum ers to justify a restrictive
m easure, som e legal disposition concerning t hat objective should be insert ed in t he
legal inst rum ent im posing t he restriction; otherwise the restriction as such would
not stand t he test of criticism .
According to t he Swedish governm ent, the reason f or ECJ referring t he It alian
national Court to m ake a thorough proportionalit y test, evidently shown in Gambelli ,
was due to t he doubtfulness of ECJ whether t he Italian m easures could be justified
by overriding reasons of general int erest. 2 20
National provisions restricting t he f undam ent al f reedom s, which are im posed
penalties, are subject t o a strict test of proportionality. 221 In Gambelli , Advocate
General Alber considered the pain of crim inal penalties for m erely receiving bets
flagrant ly in quarrel wit h t he principle of proport ionality. Crim inal sanction is the
out erm ost rem edy only to be used when other rem edies or instrum ents are unable
216
Ibid, paragraph 126.
217
C- 67/ 98, Zenatti , Opinion of Advocat e General Fennelly, paragraph 31- 32.
218
C- 243/ 01, Gambelli , paragraph 75.
219
Weat herill, S. (2006), p. 457.
220
Fi2004/ 4965, p. 9.
221
Tridim as, T. (1999), p. 157.
49
Chapter IV – Analysis
to secure t he public interest sat isfyingly. 22 2 The Court , however, delegated the
question, giving t he national Court discretional power of assessm ent. The ECJ has in
cases concerning “sensitive” questions (such as gam bling) chosen t o conduct a
lim ited proportionality t est . ECJ has ascertained that since a proportionality test
presupposes an analysis of actual and legal considerations pertaining t o t he
circum stances of the Mem ber State in question, the national court is m ore suitable
to conduct this assessment t han the ECJ. 223 A problem arisen from the tradition of
referring t he case back to the national courts has t herefore been t he discrepancy in
the assessm ents of equivalent m easures. 2 24 Surprisingly, the Swedish Suprem e
Adm inistrative Court did not ref er t he case22 5 to the ECJ22 6 , since no need was
concluded. In case of a doubt, a court should ref er a case to the ECJ22 7 . According t o
the Swedish Court, t here was no doubt. European case law (ref erring t o Schindler ,
Läärä, Zenatti and Gambelli ) had stated t hat it is up t o t he nat ional Court to assess if
national f ram eworks are acceptable. 228
Further, the criteria of proportionality seem t o play a less prom inent role in t he light
of EC- law t han adduced by SSP in Gambelli . When several alt ernatives are at hand, it
lies wit hin t he discretionary assessm ent of t he Mem ber Stat e to choose which one,
as long as the alt ernative is not disproportionate considering t he aim ed objective
(Läärä paragraph 39 and Gam belli paragraph 75). 229 Notably, this is not how the
proportionality t est is used t o be carried out; t here is one dim ension m ore. If t here
are several alt ernatives, it is not suffice t o choose a m easure that is not burdensom e,
it m ust be the least burdensom e available. 23 0 Its practical effect can be discussed of
having litt le eff ect in t he absence of several alternat ives, but t he st atem ent is
perplex ing. This reversed proportionality t est, was adduced by t he Swedish Suprem e
Adm inistrative Court when it faced t he challenge. But usually, a com plet e t est of
proportionality should be done231 , which has been advocated 2 32 in the light of
Gourmet 2 33 .
222
C- 243/ 01, Gambelli , Opinion of Advocat e General Alber, paragraph 24.
223
Het t ne, J. and Eriksson, I. O. (2005), p. 153- 154.
224
Meyrowit ch, A., Allrot h, E. and Het t ne, J. (2005), p. 58.
225
Swedish Suprem e Adm inist rat ive Court , 5819- 01.
226
By virt ue of art 234 in t he Treat y, 3rd sect ion, a quest ion pending before a court or t ribunal against
whose decision t here is no judicial rem edy under nat ional law obliges t he nat ional court to refer t he
m att er t o ECJ. However, empirically, som e court s have not accept ed t his obligat ion leading t o t he
developm ent of doct rine of Act Clair, whereby if t he m eaning of a provision is clear, no quest ion of
int erpret at ion arises. The recognit ion of Act Clair was closely relat ed t o som e Member St at es’ difficult y t o
accept EC- law as prevailing. ECJ has even expressed accept ance of a reference of new prelim inary ruling
albeit t he ex ist ence of a previous int erpret at ion in an ident ical quest ion. Act Clair concludes t he
int erest ing quest ion of when a nat ional court should be obliged t o refer a m att er t o ECJ, but is however
not t he subject of t his paper.
227
Bernit z, U. (2004), p. 461.
228
Swedish Suprem e Adm inist rat ive Court , 5819- 01 p. 497.
229
Ibid, p. 8.
230
Snell, J. (2002), p. 200, de Burka, G. and Craig, P. (2003), p. 816 and Bernit z, U. (2002), p. 115.
231
Bernit z, U. (2003), p. 579.
232
See Unibet ’ s pet it ion in case T 2417- 03 and T 2418- 03, p. 91.
233
Swedish Market Court , 2003:5 in case B 1/ 02.
50
Chapter IV – Analysis
In Gourm et , t he Swedish state adduced public health t o justify prohibition to m arket
alcohol products in periodical m agazines. The Swedish Market Court concluded that
a large supply of m arketed alcohol products already ex isted in t he Swedish society,
whereby a prohibition was very lit tle effect ive in proportion to its objective t o
prohibit t he prom ot ion of participation.
Given t he above- m entioned, as there already ex ist s a large supply of m arketed
gam bling- and lott ery products, the prohibition in § 38 of the Lottery Act ought t o
be viewed in the sam e way – that it has very little effect in proportion t o its claim ed
object ive. The Swedish Suprem e Adm inistrative Court om it ted t o do a proportionality
test in order t o assure the use of a less restrictive m easure and st ill attain the social
polit ical objectives. In the light of t he Gourm et case, a fram ework with social
polit ical objectives should be im posed a proportionality test. An ex am inat ion of a
m easure, that m ight lead to an incarcerat ion of up to two years, should face the
sam e outcom e regardless of if it is in the light of being “not disproportionat e”
(reversed proportionality) or “proportionat e” (usual proportionality). 2 34
4.2 European Case Law
The European case law, prior t o Gambelli , has clearly shown t he chosen path by ECJ
- t he national Courts were given a vast discretionary power of assessm ent.2 35
However, Gambelli form s a dividing line. 236 The afterm ath has in som e national case
law upheld t he prior path. Elsewhere, for ex am ple in Germ any, som e Courts have
held im posed restrictions incoherent wit h EC- law in the absence of a consistent
gam bling policy and, t hus, the im posed restrictions could not be m aint ained, see
section 2.10 Af term at h of Gam belli. In general, the judgm ent s are rendered by the
lower Courts and appeals have been lodged, hence, the legal batt le continues.
4.3 Clarifying Gam belli
Gam belli is a good ex am ple of t he trut h lying in t he eyes of the beholder. On one
side, Gam belli is being viewed as a prolongat ion of t he Court’ s history to give
discretional power of assessm ent to t he national Courts, wit h regards to the
com patibility of t he EC- law fram ework of a m easure. On t he f lipside, it is argued
that ECJ restricted the m argin of appreciation as t he scope of interpret ation was
narrowed to an ex t ent leading the national Court to no other conclusion than
im plied by the ECJ. 23 7
4.3.1Guidelines Narrowing the Scope of Interpretation
Undisputed is the fact that each question was given guidelines. The differences of
opinions are com posed of how narrow t he guidelines should be int erpreted. It is,
however, a known f act t hat ECJ often ex cludes any room f or interpretat ion when it
234
Wahl, N. (2005), p. 127.
235
Ibid, p. 119.
236
Bernit z, U. (2004), p. 458.
237
Wahl, N. (2005), p. 120.
51
Chapter IV – Analysis
refers back t o the nat ional Courts.2 38 The national Courts have the right to form ulate
their questions, however, ECJ do have t he freedom to interpret and even reform ulat e
the addressed question. 23 9
Analysing the verdict from this point of view gives following at hand: paragraph 70
is a guideline for paragraph 71, paragraph 72 is a guideline for paragraph 73 and
paragraph 74 is a guideline for paragraph 75. It can also be advocat ed in favour of
an im plied t one wit hin the delegations m ade in paragraphs 71, 73 and 75.
“… the
restrictions imposed by the Italian rules in t he field of invitations to tender m ust be
applicable wit hout distinction: they must apply in the same way and under the same
conditions to operators established in Italy and to those from other Member St ates
alike”.
Regarding t he prohibit ion t o discrim inate, paragraph 70 states that
The delegation in paragraph 71 is ex pressed by ”(I)t is for t he national court t o
consider whet her t he m anner in which t he conditions for submitting invit ations t o
tender for licences to organise bets on sport ing events are laid down enables t hem
in practice t o be met more easily by Italian operators t han by foreign operators. If
so, those conditions do not sat isf y the requirem ent of non- discrim ination .” By virtue
of this, the national Courts were given very lit tle to rule upon since it de facto was
m ore easily for Italian operators t o organize bet s on sporting events, since ot hers
were prevented.
On the topic of a proportionality test, in respect of the pain of crim inal penalt ies,
paragraph 72 gives the following guidelines: “… the restrictions im posed by the
Italian legislat ion must not go beyond what is necessary to attain the end in view. In
that contex t t he national court must consider whether the crim inal penalt y imposed
on any person who from his hom e connects by internet to a bookmaker established
in another Mem ber Stat e is not disproportionat e in t he light of the Court’s caselaw… especially where involvement in bet ting is encouraged in the contex t of games
organised by licensed national bodies. ” By stating this, ECJ em phasizes the
circum stances of the It alian stat e t o encourage gam bling whereby it m ust be
considered disproportionate wit h a crim inal penalt y im posed on those receiving
bets, albeit their lack of perm it.
Delegation was form ulat ed in paragraph 73 as ”(T)he nat ional court will also need t o
determine whet her t he imposition of rest rictions, accompanied by criminal penalties
of up t o a year’s imprisonment, on interm ediaries who f acilitat e t he provision of
services by a bookmaker in a Member State ot her t han t hat in which those services
are offered by m aking an int ernet connection to that bookm aker available to bettors
at t heir premises is a restriction t hat goes beyond what is necessary to combat
fraud, especially where t he supplier of t he service is subject in his Member State of
establishment t o a regulation entailing controls and penalties, where t he
interm ediaries are lawfully constitut ed, and where, bef ore t he stat utory am endm ents
238
Bernit z, U. and Kjellgren, A. (2 002), p. 154.
239
See 6/ 64, Costa/ E.N.E.L. , 78/ 70, Deutsche Grammophon and 97/ 83, Melkunie.
52
Chapter IV – Analysis
effected by Law No 388/ 00, t hose intermediaries considered t hat they were
permit t ed to t ransm it bets on foreign sporting events. ” In t his regard, the ECJ
recognizes t hat t he UK established bookm aker is already subject t o rigorous
controls ex ercised in his count ry of establishm ent by a private audit com pany and by
the Inland Revenue and Custom s and Ex cise. Thus, t he requirem ent duplicat es a
condition already sat isfied and im poses a double burden on the provider of a
service, and therefore it cannot be justified. 240 Sam e m essage is im plied in the nex t
statem ent in regard of the freedom of establishm ent enlightened by the principle of
proportionality.
Concerning t he proportionality t est relating to t he freedom of establishm ent t he
Court stated in paragraph 74, “(A)s t o t he proport ionality of the Italian legislat ion in
regard t o t he freedom of establishm ent, even if the objective of the aut horities of a
Member Stat e is to avoid the risk of gaming licensees being involved in criminal or
fraudulent activit ies, to prevent capital com panies quot ed on regulat ed m arkets of
ot her Mem ber St ates from obtaining licences t o organise sport ing bets, especially
where t here are ot her m eans of checking the accounts and activities of such
companies, m ay be considered to be a m easure which goes beyond what is
necessary to check fraud. ”
Final delegation, in paragraph 75, stated t hat ”(I)t is f or the nat ional court t o
determine whet her t he national legislation, taking account of the detailed rules f or
its applicat ion, actually serves the aims which might justify it, and whether t he
restrictions it im poses are disproport ionate in t he light of those aims. ”
4.3.2A slight Shift in t he Burden of Proof
Overall it has always been a Mem ber Stat e’ s obligation t o show applicability of the
derogations provided by the Treat y. 2 41 The ECJ has according to Snell shown a
tendency towards conducting, in perspective of article 46 of t he Treaty, “… a fairly
robust assessment of suitability and necessity of the national rules”. 242 However, in
som e areas, considered as sensitive due to t heir social, political and econom ic
nat ure, such as gam bling, the ECJ have been cautious in t heir proportionality
assessm ent. 24 3 It was not until in Lindman , the ECJ saw a need for statist ical displays.
ECJ st ated t hat “… t he referring court discloses no st atistical or other evidence which
enables any conclusion as t o the gravity of the risks connect ed to playing gam es of
chance or, a fortiori, t he ex istence of a particular causal relationship bet ween such
risks and participation by nat ionals of t he Member State concerned in lotteries
organised in other Member Stat es. ” 2 44 Apparently, ECJ lacked reason to assert a
correlation between the risk s of gam bling addiction and ot her social effects
240
de Burka, G. and Craig, P. (2003), p. 817.
241
Bernit z, U. and Kjellgren, A. (2 002), p. 203.
242
Snell, J. (2002), p. 218.
243
Eriksson, I. O. (2003), p. 589.
244
C- 42/ 02, Lindman , paragraph 26.
53
Chapter IV – Analysis
connect ed t o t he part icipation of lott eries vis- à- vis t he participat ion in foreign
lotteries.
In this case, it appears as a slight shift in the burden of proof was established.
Consequent ly, it ought t o be harder t o use, inter alia crim inal risks as derogat ion in
those cases the operat or is im posed control in his Mem ber St at e. Considering t his,
the Swedish stat e has neit her insinuat ed nor proved any ex istence of certain risks
between foreign lott eries and/ or e- gam bling and the m arketing of them as such.
4.4 Swedish Case Law
The Swedish case law is characterized by the unwillingness to trial the Swedish
provisions by referring questions to the ECJ, as ECJ’ s case law has been interpreted
in favour of the Swedish provisions and t he gam bling m onopoly. However, Sweden
has their own Gam belli case245 now. It is currently pending.
In case, RegR 5819- 01, t he Court om it ted t o do a proport ionalit y t est. In t he light of
the
above- m entioned
considerat ions
and
argum entation,
t here
are
strong
indications pointing towards that such a t est should have been m ade. It would be
very surprising if the ECJ would pass t he opport unity to give t he Swedish national
Court guidelines, in accordance wit h Gambelli , and a reprim and concerning the
proportionality test. The verdict can be criticised for being a too general collected
assessm ent than a proportionalit y t est in perspective of EC- law. The constructive
crit ic is that t he Swedish nat ional court should have separat ed the part s of the
m easures that could be considered as disproport ional, and furt her declared t hese as
incoherent wit h EC- law. 2 46
4.5 The Lottery Act
The Swedish legislation m akes a distinction bet ween national and foreign subjects,
principally shown in paragraphs 15, 27 and 38, but also 17, 19 and 22 by its
reference to § 15. §15 states: “Perm its to arrange true lott eries must only be granted
to Swedish legal entities that are non- profit associations. ”247
The
Swedish
fram ework
is
advocated
by
the
gam bling
com panies
to
be
discrim inating, since Swedish legal entities that are non- profit organizations have
the best pre- requisit es t o be grant ed a perm ission to organize a lott ery. 2 48 However,
the governm ent as well as the Swedish Suprem e Adm inistrative Court, argues t hat
there is no diff erence in ex cluding, dom estic as well as foreign subjects, as long as
all com m ercial parties are enclosed by the wording of paragraph 15, and t he practice
of t he sam e. Either way, com m ercial parties are ex cluded regardless of nationality.
The
Swedish
Suprem e
Adm inistrative
Court
com m ented
t he
quest ion
by
acknowledging t he unluck y wording. However, t he m easure was not considered as
245
C- 432/ 05, Unibet .
246
Het t ne, J. and Eriksson, I. O. (2005), p. 158, especially foot not e 30.
247
Aut hor’ s translat ion.
248
Het t ne, J. (2004b), p. 14.
54
Chapter IV – Analysis
discrim inat ing since it does not include any negative special treatm ent of foreign
subjects. 24 9 Nex t question is m ore interest ing - can t he discrim ination be justified?
This will be answered in section 4.6 Answering the Quest ions of Research.
It appears as the objective is not t o discrim inat e foreign subjects but to ex clude all
com m ercial operators. However, t he practical effect is discrim inating in m y opinion,
since no foreign subject s are obtaining a perm it as it is only given to subjects in
solidarity wit h t he Swedish state. In general, it is practically im possible t o operate a
national m onopoly and avoid it to render discrim inat ing effect s.2 50 Crucial for the
assessm ent is t herefore if t he restriction has actual m arket eff ects t hrough t he
conditions set forth in t he practise. 2 51 Of secondary im portance is if the wording of
an Act m akes a form al equivalence between dom estic and foreign operat ors,
regardless of the int ention of the wording.
Main target ed paragraph by t he gam bling com panies is § 38, prohibit ing prom otion
of participation in unlawful lotteries arranged within t he country or in lotteries
arranged outside t he country; m arketing t hat is. The paragraph offers an ex em ption
by which ATG and Svenska Spel have enabled participation abroad wit h subjects
collaborating wit h t hem and which have obtained sim ilar perm its from their
governm ents. This is st artling, in m y opinion, but yet again the essence of the
question in t he view of t he Swedish governm ent; com m ercial lotteries are harm ful as
opposed to state owned lot teries. But, according t o Gambelli , a st ate owned
gam bling m arket can be harm ful if it incit es and encourages gam bling t o a degree
where it is crystallised that t he prim ary object ive is financial benef it of the public
purse and not the protection of public int erest. The cogent reason will be difficult
for the Stat e to show. 252 In the end, the prohibition can only be m aintained if it can
be justified by overriding reasons which have been given a proportional design. 2 53
The stat e’ s assignm ent t o supply t he Swedish populat ion with gam bling can reach a
point where it becom es too harm f ul to justify it. However, not to forget, Sweden, as
well as ot her Mem ber St ates, joined the EU wit h the knowledge, and f orem ost the
claim of m aint aining t he gam bling m onopoly as well as other m onopolies. Thus, t his
is a political question of highest rank.
4.6 Answering the Questions of Research
The quest ions outlined in t he first chapt er of t his report will be answered in t his
section as a concluding section.
First question concerned the law in force within EC and Sweden. By virtue of early
case law it was established t hat (1) gam bling is an econom ic act ivity t hat (2) falls
249
Swedish Suprem e Adm inist rat ive Court , 5819- 01 p. 8.
250
Allgårdh, O. and Norberg, S. (2004), p. 289.
251
Bernit z, U. (2003), p. 577 and case C- 243/ 01, Gambelli , Opinion of Advocat e General Alber,
paragraphs, 93 and 94.
252
Het t ne, J., (2004b), p. 15.
253
Bernit z, U. (2005) p. 208.
55
Chapter IV – Analysis
under the scope of services and (3) m easures restricting gam bling cannot be (3a)
discrim inat ing, (3b) lawf ul unless justified by derogations given in article 46 of t he
Treaty or (3c) lawful unless proportionat e in relation to its aim . The Gam belli verdict
was clearly in its m essage, albeit its applicabilit y can be discussed back and fort h.
Any authority of a Mem ber Stat e inciting and encouraging gam bling loses its
possibility t o invoke public order concerns relat ing to t he need to reduce
opportunities for bett ing in order to justif y its restrictive m easures. When t he
Swedish Suprem e Adm inistrative Court had t he opportunity t o refer a case to the
ECJ, it chose not to. Swedish case law has m erely followed t he Gam belli verdict by
concluding t hat Swedish m easures are in conjunct ion with EC- law. However, the
financial im pact was noticed by t he Swedish Court but was not considered as a
prim ary objective of the Swedish fram ework.
The second, and its ent ailed, question were if t he Swedish provisions are in breach
of the Treaty and, if so, if they can be justified. It is inevitable for a m onopoly to not
breach a principle based on free m ovem ent of services; otherwise it would not be a
m onopoly as such. But, the question is vaster than this, and the m ain question to be
answered is if the Swedish provisions can be justified. I believe there to be cogent
indications pointing towards incoherence between t he Swedish gam bling m onopoly
and EC- law. Assuredly, Sweden did ent er t he European Union under t he claim t o
m aintain its m onopoly, and this m ust serve as a standpoint. But in t he light of the
m essage delivered through Gambelli , I am strongly questioning t he Swedish
gam bling m onopoly and it s claim ed objectives. It appears as the prim ary objective
for keeping t he m onopoly is financial. As I see it, the Swedish aut horities are inciting
and encouraging consum ers in the sam e m anner as the Italian aut horit y was doing
in Gambelli . There are discrepancies between t he fram eworks, but t he circum stances
can be com pared. In Gambelli , Italy was granting concessions t o bookm akers, while
in Sweden, concessions are given to Svenska Spel and ATG f or which they act
through their distribution channels. The aggressive nat ure of the m arket ing and its
pertaining costs can also be com pared. The aggressive m arketing has been
established in preparatory work as well as in case law. The circum stances at hand
ought to be in favour of the gam bling com panies in t he ref erred case to the ECJ.
However, the political im pact of t he question can neither be forgott en nor denied.
One should bear in m ind t hat the Directive on Services is ex pected t o be harm onised
before 2010. On the whole, one hears from Brussels that a liberalisation of the
m arket is intended by 2008. 25 4
The t hird and fourt h questions regard under what circum stances t he m onopoly
could cont inue to ex ist and what could underm ine the m onopoly. New technologies,
and forem ost the Internet, have enabled new products and new distribution
channels. New products and distributions (read accessibility ) are presum ed m ore
addictive as their aim is to give the m ost leverage for the gam bling com panies,
including the state owned. Therefore, it is of highest im portance for Svenska Spel t o
have restrictive m arketing and not to act as a f ollower of the gam bling com panies’
254
ISA- CASINOS worldwide casino guide, (2005- 02- 28).
56
Chapter IV – Analysis
product s. Som e product s should be considered as too addictive for Svenska Spel t o
of fer, but it appears as Svenska Spel does not hesit ate to offer even t he m ost
addictive product s. Products already ex isting on the m arket are safer operat ed by
Svenska Spel is their opinion.
It appears as the sam e circum stances nurt uring t he m onopoly, on the flip side, is
underm ining it. Thus, to safeguard t he m onopoly, m arketing should be decreased,
the pain of crim inal penalties should be abolished and a m ore rest rictive st and
should incorporat e t he operation of new products such as online poker and
gam bling via m obile phones. Moreover, as indications are pointing towards
incoherence between Swedish provisions and EC- law, the Public Procurem ent Act
ought to be reviewed, as well as the practise of the sam e, in order t o enable for
private operators t o offer their services under com parable circum stances.
In a future alternat ive fram ework, the legislation should be form ed in m anner which
enables rational and cogent reasons. 25 5 The wording in t he provisions should be clear
– if t he intention is not t o discrim inat e foreign subjects. The provision ought t o have
anot her wording, in ex am ple that it ex cludes com m ercial operators f rom the m arket
and not foreign. 25 6 Market ing should be allowed to all gam bling operat ors regardless
of place of establishm ent, as the current order appears disproport ional. Further, t he
procedure for granting concessions could safeguard t he int ended aim s by having
fix ed winning percents and it ought to be possibly to find a way to allocat e earnings
for the benefit of sport organizations. 257
In conclusion, it appears as the operat ion of Svenska Spel increases gam bling and
not t he opposite. Under these presum ed circum st ances, t he current m onopoly order
cannot be considered as effective and appropriate to its purpose - to decrease
gam bling. The prohibition of prom ot ing participation in lott eries, in § 38 of the
Lottery Act, t heref ore appears inefficacious since advertising via television from
foreign gam bling com panies seem s unstoppable as t hey are broadcasted from
count ries not im posed Swedish provisions (channel 3 and channel 5 broadcasted
from Great Britain). The m eaning t he discretional power of assessm ent given to t he
Mem ber Stat es does not ex clude t he chosen m easure from being im posed
appropriateness and necessity in proportion t o a legit im ate aim . Principle of
proportionality constitut es a fundam ental principle of EC- law, whereby national
courts should be im posed to conduct a proport ionality test where t he real eff ect of
the national m easure is t ested, t hat is if it contributes in a consistent and syst em atic
m anner to decrease gam bling opport unities and lim it gam bling. Such assessm ent
m ust reflect t he act ual appearance of the Swedish gam bling m arket, in which t here
is a high supply of gam bling product s and high ex posure of m arketing despite of, or
thanks to, t he m onopoly. The objective of Svenska Spel and t he Swedish state
appears to be t o strengt hen the com petitiveness and not to suppress the supply of
gam bling.
255
Het t ne, J. (2004b), p. 16.
256
Meyrowit ch, A., Allrot h, E. and Het t ne, J. (2005) p. 88.
257
Het t ne, J. (2004a), p. 606.
57
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IP (91)904, Gambling and the single market : EC Comm ission organizes hearings
towards year’ s end , 11 October 1991
IP (92)1120, Gam bling and t he single m arket: no need for any legislative init iative,
23 Decem ber 1992
IP/ 04/ 401, Free m ovem ent of services: Com m ission inquires into Danish
restrictions on sports bet ting, 2004- 03- 30
IP/ 04/ 1227, Free m ovem ent of goods and services: Greece referred to Court over
obstacles to im porting and m arket ing gam es, 2004- 10- 14
Swedish Departm ent of Finance
Svenska Spel får ordna pokerspel over Int ernet , 2005- 11- 24
Ladbrokes
Ladbrokes vinner i finländska regeringsrätten, 2005- 06- 10
Case Law
European Court of Justice
6/ 64
Costa/ E.N.E.L., Rec.1964,p.1141, 15/ 07/ 1964
78/ 70
Deutsche Gram m ophon/ Metro SB, Rec.1971,p.487, 08/ 06/ 1971
13/ 76
Doná/ Mantero, Rec.1976,p.1333, 14/ 07/ 1976
15/ 78
Sociét é générale de banque alsacienne/ Koestler, Rec.1978,p.1971,
24/ 10/ 1978
110/ 78
Ministère public and others/ Van Wesem ael, Rec.1979,p.35,
18/ 01/ 1979
111/ 78
Follachio, see case C- 110/ 78
279/ 80
Webb, Rec.1981,p.3305, 17/ 12/ 1981
97/ 83
Melkunie, Rec.1984,p.2367, 06/ 06/ 1984
220/ 83
Com m ission/ France, Rec.1986,p.3663, 04/ 12/ 1986
C- 202/ 88
France/ Com mission, Rec.1991,p.I- 1223, 19/ 03/ 1991
C- 154/ 89
Com m ission/ France, Rec.1991,p.I- 659, 26/ 02/ 1991
C- 180/ 89
Com m ission/ Italy, Rec.1991,p.I- 709, 26/ 02/ 1991
C- 288/ 89
Stichting Collect ieve Ant ennevoorziening Gouda/ Com m issariaat voor
de Media, Rec.1991,p.I- 4007, 25/ 07/ 1991
C- 76/ 90
Saeger/ Dennem eyer, Rec.1991,p.I- 4221, 25/ 07/ 1991
C- 320/ 91
Crim inal proceedings against Corbeau, Rec.1993,p.I- 2533,
19/ 05/ 1993
C- 19/ 92
Kraus/ Land Baden- Würt t em berg, Rec.1993,p.I- 1663, 31/ 03/ 1993
62
List of references
C- 275/ 92
H.M. Custom s and Ex cise/ Schindler, Rec.1994,p.I- 1039, 24/ 03/ 1994,
C- 393/ 92
Gem eent e Alm elo and others/ Energiebedrijf IJsselm ij, Rec.1994,p.I1477, 27/ 04/ 1994
C- 55/ 94
Gebhard/ Consiglio dell’Ordine degli Avvocati e Procuratori di Milano,
Rec.1995,p.I- 4165, 30/ 11/ 1995
C- 368/ 95
Vereinigt e Fam iliapress Zeitungsverlags- und vert riebs Gm bH/ Bauer
Verlag, Rec.1997,p.I- 3689, 26/ 06/ 1997
C- 376/ 96
Leloup, see case C- 369/ 96
C- 369/ 96
Arblade, Rec.1999, p.I- 8453, 23/ 11/ 1999
C- 124/ 97
Läärä and others, Rec.1999,p.I- 6067, 21/ 09/ 1999
C- 58/ 98
Corsten, Rec.2000,p.I- 7919, 03/ 10/ 2000
C- 67/ 98
Zenatti, Rec.1999,p.I- 7289, 21/ 10/ 1999
C- 361/ 98
It aly/ Com m ission, Rec.2001,p.I- 385, 18/ 01/ 2001
C- 6/ 01
Anom ar and others, Rec.2003,p.I- 8621, 11/ 09/ 2003
C- 100/ 01
Oteiza Olazabal, Rec.2002,p.I- 10981, 26/ 11/ 2002
C- 243/ 01
Gam belli and others, Rec.2003,p.I- 13031, 06/ 11/ 2003
C- 42/ 02
Lindm an, Rec.2003,p.I- 13519, 13/ 11/ 2003
C- 338/ 04
Placanica, pending case
C- 432/ 05
Unibet, pending case
Swedish Market Court (MD)
Swedish Market Court 2003:5 in case B 1/ 02, 2003- 02- 05
Swedish Suprem e Adm inist rative Court (RegR)
Case num ber: 5819- 01, 2004- 10- 26, RÅ 2004 ref 95
Case num ber: 7119- 01, 2004- 10- 26, RÅ 2004 ref 96
Case num ber: 3841- 04, 2005- 02- 10, RÅ 2005 ref 1
Swedish Suprem e Court (HD)
Case num ber: Ö 4474- 04, 2005- 11- 28
Case num ber: Ö 752- 05 (leave to appeal – prövningstillstånd), 2005- 03- 03
Swedish Court of Appeal
Case num ber: Ö 9251- 04, 2005- 01- 26
63
List of references
Other National Courts
Hessischer Verwalt ungsgerichtshof s in Kassel , verdict 9 February 2004, notation
AZ:11TG 3060/ 03, regarding arrangem ent of sporting bets to Britain.
The German Federal Constitutional Court , Case num ber: 1BvR 1054/ 01
Italian Court of Cassat ion , Ruling no. 23272 of May 18, 2004
Contacts
Chief Inform at ion Of ficer, Andreas Jansson, 2005- 11- 08 (Svensk a Spel)
Director of Com m unications, Claes Tellm an, 2005- 11- 08 (Svenska Spel)
Int ernet Websites
www.svenskaspel.se
www.atg.se
www.lotteriinsp.se, Statistic table from Lott eriinspekt ionen , 2005- 03- 22
www.ladbrokes.se, /DGEURNHVYLQQHULILQOlQGVNDUHJHULQJVUlWWHQ2005- 06- 10
64
APPENDIX A – Gam bling m arket in Sweden
Appendix A – Dispersion of the Swedish gam bling
and lottery m arket
Dispersion of the Swedish gam bling and lott ery m arket, which f or year 2004
am ounted t o SEK 36,5 billion. 2 58
Year
Turnover (MSEK)
Earning
1999
31 505
8013
2000
32 185
8206
2001
33 261
8277
2002
35 108
8376
2003
36 197
8525
2004
36 553
-
2005
-
-
Table 1 – Dispersion of t he Swedish gambling and lottery market during the years 1999- 2004
Rest aurant
casinos, 3 %
Casino Cosm opol,
2 %
Bingo, 5 %
Rem aining lott eries,
2%
Public gam bling,
5 %
Svenska spel (ot her
services), 34 %
ATG , 29 %
Svenska spel,
(slot s), 20 %
Chart 1 - Dispersion of Swedish gambling market (2004)
258
St at ist ic t able from Lott eriinspekt ionen, 2005- 03- 22.
65
APPENDIX B – Products offered by Svenska Spel
Appendix B – Products offered by Svenska Spel
1897
Penninglotterier
1993
Italienska Stryktipset
1926
A m onthly draw
1993
Viking Lotto
1977
Two m ont hly draw
1992
A scrape
1934
Stryktipset
1- 5- and 10- weeks
Tips- SM (national
Dram atenlotteriet
1970
Num m erlott eriet
1980
Lotto
Skrap- Bingo
1995
Lotto Ex press (18- year
age lim it)
cham pionship)
1954
1994
Wednesdays 2 draws,
1996
Skrappyram id
1996
(Jack Vegas)
1996
(Miss Vegas)
2000
Greyhound racing
Enkel 3, Dubbel 3, on
Sat urdays 2 draws
weekends
1- 5- and 10- week s
Vinn 3: daily
2002 Lotto with Joker
Vinn 8: Sundays
gives ex tra winning chance
1983
1984
Måltipset
2002
Sunday Bingo
1- 5- and 10- week s
2003
Tia
Joker
2003
Lördagsgodis
2003
Sport bagen
stryktipset, Måltipset
2003
Brasilianska stryktipset
Oddset (18- year age limit)
2004
Europatipset
2004
Skraplabyrint
Matchen
2004
Skrapkarta
Mix en (Int ernet)
2004
Pick’ n’ Click
Toget her with Lotto,
Stryktipset, It alienska
1986
Bom ben, Stubinen
Lången
1986
Toppen
Trekortspoker
Triss
Straff spark
Tärning
2003 double t riss
Diam antjakt
TV- scrape, m onthly
Hjärter dam
winnings
1992
Yatzy
Keno
66
APPENDIX C – Product s of fered by ATG
Appendix C – Products offered by ATG
V5
1987
Dagens Dubbel
1993
V75
1993
Harry Boy
1994
V3
1999
V65 (V64 1999- 2003)
2001
Trio
Vinnare och plats
Raket
Kom b
2004
Tvilling
Besides f rom the products listed above, ATG is participat ing in and of fering an
internat ional gam bling pool, which t urnovers SEK 606 m illions whereby SEK 537
m illions derive f rom bets placed in Sweden m aking it ex trem ely profitable f or ATG. 25 9
259
Annual report of ATG (2004).
67
APPENDIX D – Subvent ion in the work against gam bling addiction
APPENDIX D – Subvention in the work against
gam bling
addict ion
in
relation
to
m easures
preventing alcohol and narcotics
The
governm ent
earm ark ed
Healt h
has
funding
Instit ut e
since
1997
the
Public
to
(FHI)
in
order
Subventions in t he suppressing work
against
to
addiction
of
alcohol
and
narcotics. 261
suppress gam bling addiction.
Year 26 0
Kkr
Year
Kkr
1997
2 000
1997
65 000
1998
2 000
1998
95 000
1999
4 000
1999
100 000
2000
4 000
2000
93 500
2001
6 000
2001
85 200
2002
4 000
2002
302 500
2003
9 000
2003
193 250
2004
14 000
2004
153 250
2005
13 900
2005
350 000
2006
15 000
2006
-
Table 2 – Subvention of gambling addiction
Table 3 – Subvent ion of alcohol and narcotic
addiction
2 61
260
The subvent ions have not been separat ed
from each ot her in t he governm ent ’ s budget
See governm ent ’ s budget proposals for t he
years concerned.
proposals.
68
69