In Placanica, the ECJ largely resisted the temptation to interfere with a Member State's discretion as to gaming regulation. Ultimately, the national courts remained in the difficult (politically sensitive) position of having to assess whether national gaming restrictions are justifiable in the light of national political objectives and the principle of proportionality.
Since Placanica there have been a number of other developments in this area.
One such example, is the case of Unibet. In essence, this case is a rather standard example of the ECJ respecting the procedural autonomy of the Member States (in this instance Sweden), subject to those rules not treating claims based on EC law less favourably than claims based on national law and subject to the national procedural rules not making it impossible in practice for an individual to exercise their EC law rights.
Here, Unibet (a UK/Maltese registered company focussing primarily on internet gaming) sought to challenge Swedish law that prohibited the promotion of participation in a foreign lottery. Unibet purchased advertising space in a number of Swedish newspapers with a view to promoting its gaming services on the internet. The Swedish authorities responded by, amongst other things, obtaining injunctions and commencing criminal proceedings against Unibet's advertisers.
Unibet challenged the Swedish authorities using a three pronged attack based on Article 49 EC (freedom to provide services):
1 - The Right to a Declaration
Unibet wanted a declaration that it had the right, notwithstanding the prohibition on promotion, to market its gaming services in Sweden. In effect, Unibet was seeking to strike down the Swedish law, on a general basis, as contrary to Article 49. The ECJ rejected the argument that Unibet had a right to a declaration/free-standing action on compatibility. What prevented Unibet seeking a declaration based on an EC law argument was the fact that it has lodged an admissible damages action in the Swedish court, which would allow the national court to consider the compatibility of national law with EC law as a preliminary issue. However, as the Advocate General remarked: " …if the damages route does not in fact afford protection that, in practical terms, allows Unibet to enforce any rights under Community law once they are recognised by the national court, a new remedy must necessarily be created if Sweden is to respect its obligations under Community law".
This indeed is a limit to a Member State's procedural autonomy and no doubt gaming organisations will be considering very carefully the procedural rules in a particular Member State with a view to seeking more novel, innovative and effective remedies.
2 - Interim Relief
In relation to the interim relief, the ECJ re-iterated its long line of jurisprudence that, where it is argued that national legislation contravenes EC law, while a national court must be able to grant interim relief, a national court is not required to do so. The ECJ confirmed that it is for the national court to ultimately consider whether the granting of such relief is necessary and also determine the conditions under which interim relief is to be granted.
Interim injunctions and the like, are a useful litigation tool for gaming entities looking to enter "closed markets" as it provides a mechanism which potentially allows them to continue their activities pending judicial assessment of the legality of any restrictive regulation. However, it has proved difficult for litigants to obtain interim relief on the basis that national legislation infringes EC law.
3 – Damages
This matter is currently proceeding before the Swedish courts and was not directly in issue before the ECJ. However, it may well result in a reference to the ECJ in due course.
The Infringement Actions
Advocate General's Opinion in Commission vs Italy
The Advocate General (AG) gave her opininon recently on Commission's infringement action against Italy for renewing 329 horse-race betting licences without a prior tendering procedure. Whilst "public service concessions" such as horse-race betting licences, are not caught by the procedural rules in the EC procurement directives, they are subject to the fundamental rules of EC law – such as non-discrimination on the grounds of nationality and equal treatment, which implies a duty to act transparently. This in turn requires a degree of advertising sufficient to enable the service concession to be opened up to competition and the impartiality of procurement procedures to be reviewed.
The AG reasoned that because they were renewed automatically it was not on any view, "sufficient to enable the service concession to be opened up to competition and the impartiality of procurement procedures to be reviewed" and it is likely the ECJ will conclude likewise.
Three points, in particular, arise from the Advocate General's opinion:
# Italy could face follow-on damages actions by the excluded parties - The difficulty such claimants would face, however, is quantifying loss and proving the causal link between Italy's infringement and damage suffered.
# Breach of procedural requirements - A Member State's regulation of gaming may be caught by procedural irregularities more easily than a claim for a "more substantive" breach of the free movement rules.
# Justification - Italy sought to justify its renewal on the grounds of ensuring "continuity", "financial stability" and "discouraging recourse to clandestine betting activities". This is not too dissimilar from the Placanica, but here the AG rejected them, correctly noting that economic justifications could not overide community law. Italy seemingly tried to pin a financial/administrative justification (non-permissible) to the back of a social policy justification (sometimes permissible), whereas the AG clearly treated them as separate grounds. Furthermore, it is clear that the aim of preventing clandestine betting was either not a particularly strong justification, or more likely, she simply did not believe that this is what the Italian state was trying to do.
Other Infringement Actions - Sports Betting Services
On 21 March 2007, the Commission announced that it had issued "reasoned opinions" to each of Denmark, Finland and Hungary concerning restrictions on the provision of sports betting services, including the requirement for a state concession or licence (even where a provider is lawfully licensed in another Member state). The Commission also objects to restrictions as to the promotion or advertising of services and to the participation of nationals in the games. The Member States have two months in which to respond to the satisfaction of the Commission, failing which the Commission is likely to raise an action before the ECJ.
These cases obviously come soon after the ECJ's ruling in Placanica and gives the ECJ an opportunity to deal with the issue head on. What is striking is that the Commission looks like it is seeking to push classic free movement law back into the gaming arena, namely: if a provider is lawfully licensed in one Member State there is no reason why its activities should be prohibited in another.
In Placanica, the ECJ almost seemed to provide a Member State with the necessary terminology to cloak what otherwise could be viewed as protectionist or revenue raising measures. Another way to view what the ECJ did in Placanica is that it offered up a possible justification with a view to "tightening" it up in the infringement actions: an example of the ECJ giving "hope" to the Member States with one hand and then dashing it with the other. In conjunction with the Advocate General's opinion in Commission v Italy, a Member State's ability to justify regulatory restrictions in the gaming sector may well become a lot narrower after the ECJ has deliberated.