A gaming company cannot be granted exclusive rights to operate in a particular State. This is the case unless the liberalisation of the market is incompatible with the level of consumer protection which a State wants to offer to its citizens and provided that the monopolistic rights granted are subject to effective and strict controls. In this way, the Court of Justice of the European Union has once again pronounced itself on the extent to which a State is free to prohibit gaming companies licensed in other member states from operating within its territory.
If Greece opts to liberalise the market, it must observe the principles of equal treatment- Mariosa Vella Cardona
A public limited company OPAP enjoys the exclusive rights for a 20-year term to organise and operate games of chance and betting in Greece. The Greek State approves the regulations governing OPAP’s activities and monitors the procedure applied to organise the games, while also being a minority shareholder. OPAP fixes the maximum amount of the bet and winnings per form and is entitled to use up to 10 per cent of the advertising space in stadia and gymnasia free of charge. It has also expanded its activities abroad, in particular in Cyprus.
A number of gaming companies licensed in the UK and also having their registered office there expressed their interest to penetrate the Greek market to provide sport betting services. However, their applications were tacitly refused. They filed an action before the Greek courts challenging the authorities’ tacit rejection of their applications. The Greek court in turn made a preliminary reference to the Court of Justice of the European Union requesting guidance as to whether EU law, precludes national legislation which grants the exclusive right to operate games of chance to a single entity. It observed that, while the objectives of the Greek legislation are to restrict gaming opportunities and to combat criminality linked to gaming, OPAP itself pursues a commercial policy of expansion.
The Court of Justice of the European Union noted that national legislation which grants monopolistic rights to a gaming entity and prohibits providers established in another member state from offering the same services, constitutes a restriction on the freedom to provide services or on the freedom of establishment as guaranteed by EU law. Such a restriction may only be justified on the basis of public policy, public security or public health or by overriding reasons in the public interest.
The court observed that gaming legislation is one of those areas of law in which there are significant moral, religious and cultural differences between the member states. In the absence of harmonised EU laws in this field, it is for each member state to determine, in accordance with its own scale of values, what is required in order to ensure that the interests in question of its citizens are protected. In accordance with previous decisions on the matter, the court therefore noted that a State’s objectives to reduce gaming opportunities and combat criminality linked to gaming, may in particular cases justify restrictions on fundamental freedoms.
The court emphasised, however, that restrictive measures imposed by member states must be proportionate and non-discriminatory while actually ensuring the attainment of the objectives pursued in a consistent and systematic manner. National courts seized of a case before them, must therefore make sure that the national law genuinely meets the objectives which a State has. The court concluded that EU law prohibits national legislation which grants monopolistic rights to a gaming company, without genuinely reducing opportunities for gambling by limiting activities in that domain or by ensuring strict control of the expansion of the industry as is necessary to combat criminality.
The court recommended that in the current case, the Greek authorities could therefore adopt either one of two possible courses of action. If they believe that the liberalisation of the gaming market is incompatible with the level of consumer protection and the preservation of order in society which they want to uphold in their territory, they must undertake reforms of the monopoly and exercise effective and strict control. If, on the other hand, the State opts to liberalise the market, it must observe the principles of equal treatment and of non-discrimination on grounds of nationality and ensure that there is transparency.
In the absence of harmonised EU legislation regulating the gaming sector, it is up to the member states themselves to ensure that a delicate balance is maintained between the respect for the fundamental freedoms enjoyed by all EU citizens and entities as enshrined in EU law, and the pursuit of objectives relating to public policy and public order.
mariosa@vellacardona.com
Mariosa Vella Cardona is deputy chairwoman of the Malta Competition and Consumer Affairs Authority and a member of the National Commission for the Promotion of Equality.