GIBRALTAR: EU COURT ADVICE SETS OFF WAVE OF CONCERN IN LOCAL GAMING INDUSTRY

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EU COURT ADVICE SETS OFF WAVE OF CONCERN IN LOCAL GAMING INDUSTRY

MARCH 10, 2010
GIBRALTER CHRONICLE


Gibraltar Government is being urged by the gaming industry to consider a more proactive stance, possibly intervention in court action, following a recent opinion expressed by the European Court of Justice Advocate General, Paulo Mengozzi, that mutual recognition of national licences for games of chance is not viable as European Union law now stands, it has emerged.

In an opinion on two cases currently before the European Court of Justice, Advocate General Mengozzi has outlined some of the legal difficulties which Internet technology has introduced into the international debate in Europe and the question of harmonisation of regulations.

He was commenting on the German cases involving Markus Stoss and the Gibraltar-based Carmen Media Group. The case raises questions about the recognition of jurisdictions like Gibraltar and their regulatory regime.

In the absence of harmonised legislation, EU member states are developing very distinct legislation which makes it “hugely challenging” for the community judge to ensure the respect of the Freedoms provided by the Treaty, Mengozzi observed.

On the Carmen Media case, AG Mengozzi noted: “Consistency must always be examined from a national view point, with the result that regional differences within a Member State might render the system inconsistent”.

He takes the view that a Member State may prohibit, under certain conditions, games of chance on the internet and may provide for a state monopoly on sports betting even if those games are actively promoted and if games involving a greater risk of addiction may be offered by private operators

A German court is being asked to decide whether the Land of Schleswig Holstein was entitled to reject Carmen Media Group’s application to be allowed to offer sports betting over the internet in Germany, when in Gibraltar, where it is established, it already holds an ‘off-shore’ licence authorising it to organise gambling outside Gibraltar.

According to the Advocate General, the case-law of the Court openly and unambiguously accepts, albeit subject to certain conditions, monopolies and other restrictions on operators in the gaming sector.

He argues that although a prohibition of certain games of chance or a restriction on their operation to a limited number of licensees restricts, in particular, the freedom to provide services, the Court authorises such national restrictions where they do not lead to discrimination based on nationality or country of establishment, where they pursue a public-interest objective, such as reducing gambling opportunities or the fight against fraud and crime, and where they are proportionate and consistent in relation to the objective pursued.

The Advocate General takes the view that European Union law, as it now stands, does not oblige Member States mutually to recognise national gaming licences. Neither the freedom of establishment nor the freedom to provide services confers on the holder of a licence – granted by a Member State for the organisation of sports betting not restricted to its national territory – or third parties appointed by it, the right to offer gambling on the territory of other Member States. He said that that “applies, all the more so, in relation to a purely ‘off-shore’ licence.”

The Advocate General’s Opinion is not binding on the Court of Justice.