by Vidrean – Căpușan Tudor Dumitru, Attorney-at-law, PhD assistant professor
“Babeș – Bolyai” University, Faculty of European Studies
The European Union (hereafter “EU”) is the product of cooperation between Member States whose main objective is to develop a single market in which goods and services can move freely and without restrictions.
Analyzing the provisions of Articles 3 to 6 of the Treaty on the Functioning of the European Union (hereafter “TFEU”), it can be seen that three types of competences can be identified in the EU’s relationship with the Member States: exclusive EU competences (e.g: customs duties) under Article 3 TFEU, semi-shared competences (e.g: VAT and excise duties) under Article 4 TFEU and Member States’ own competences (any competences not covered by Articles 3 and 4 TFEU)[1].
From an analysis of the legislative texts indicated above, it can be seen that the subject of gambling does not appear in either Article 3 TFEU or Article 4 TFEU. This leads to the conclusion that gambling falls within the competence of the Member States. However, we believe it is important to note that Member States do not have unlimited scope for action.
To this end, we believe that it is worth highlighting the case law of the Court of Justice of the European Union (hereinafter “CJEU”), which through its decisions has the role of ensuring a balance between the competences of the EU and those of the Member States. In this respect, it is worth mentioning the Schumaker[2]and Saint Gobain[3]cases, where the Luxembourg court made it clear that Member States can exercise their competences as long as the four fundamental freedoms of the EU (free movement of goods, persons, services and capital) are not affected.
As such, a first conclusion that emerges with interest in the field of gambling is that Member States are bound to respect the four fundamental freedoms when regulating gambling.
In this context, we believe it should be pointed out that in 1992, Member States first discussed the issue of gambling in the context of the single market at the Edinburgh European Council[4]. The conclusion reached by the representatives of the Member States was not to adopt any positive measures on the harmonization of the gambling sector. The set of rules adopted in Edinburgh in 1992 is still valid today, which is also the reason why no EU-wide prescriptive regulation (directive or regulation) can currently be identified that would simplify the access of gambling from one Member State’s market to another Member State’s market.
Vidrean – Căpușan Tudor Dumitru
The direct consequence of this is that all responsibilities in the field of gambling have been taken over by the CJEU, which is limited to one objective at the moment: protection of the four fundamental freedoms. The role of the CJEU has increased after the European Commission decided in 2017 to close all infringement proceedings in this area and to reject all individual complaints, considering that the problem of gambling can be dealt with more effectively at national level[5].
The second conclusion that needs to be mentioned is that in the field of gambling the rulings of the CJEU have a direct and overwhelming impact, so that any operator in the gambling industry has an obligation to constantly follow the development of CJEU case law. This is particularly so in the context where the rulings of the CJEU directly create rights and obligations both for Member States and for private parties such as gambling operators.
As such, in order to highlight the importance of the CJEU’s rulings on gambling, we will briefly comment on some of the most important rulings.
A first case we will refer to is Sporting Odds Ltd[6], where the Luxembourg court ruled that Article 56 TFEU (freedom to provide services) precludes a national (Hungarian) regulation restricting the granting of an online gambling license only to gambling operators holding a license for a physical casino located in the territory of that Member State. As such, the Luxembourg court concludes that a gambling operator which has infringed a rule such as that set out above may be penalized by the Member State concerned.
A second landmark case is the Falbert business[7], where the Luxembourg court qualified gambling advertising as an information service. Consequently, Member States can only impose criminal sanctions if they comply with EU rules on information services.
Finally, the third preliminary deal we will refer to is Berlington Hungary[8], for which the Court ruled that the tax increase in relation to income from the operation of slot machine games being additionally taxed at 5 times more without a transitional period is incompatible with EU law. The same judgment also ruled that prohibiting the operation of slot machines outside casinos is a restriction on the freedom to provide services contrary to Article 56 TFEU.
In conclusion, it can be noted that EU regulations have an overwhelming impact on the gambling industry, both in terms of the rights and obligations they develop, which is why we believe that such an issue must be treated with the utmost interest by all operators operating in the gambling industry.
Contact
Vidrean – Căpușan Tudor Dumitru, Lawyer, PhD assistant professor
“Babeș – Bolyai” University, Faculty of European Studies
email: tudor.vidrean.89@gmail.com
phone: 0748.048.104
[1] Catherine Barnard, The Substantive Law of the EU – the Four Freedoms, 4th edition, Oxford University Press, Oxford, 2013, pp. 3 – 5
[2] CJEU, preliminary ruling of 14.02.1995, Case C-279/93
[3] CJEU, preliminary ruling of 21.09.1999, Case C-307/97
[4] Philippe Vlaemick, Robbe Verbeke, The Gambling Law Review: Gambling and European Law, https://thelawreviews.co.uk/title/the-gambling-law-review/gambling-and-european-law
[5] European Commission, see official press release of 07.12.2017, available at https://ec.europa.eu/commission/presscorner/detail/en/IP_17_5109
[6] CJEU, preliminary ruling of 28.02.2018, Case C-3/17
[7] CJEU, preliminary ruling of 20.12.2017, Case C-255/16
[8] CJEU, preliminary ruling of 11.06.2015, Case C-98/14
