It can be resumed that the following public interest objectives are in principle admitted as justifications of restrictive national measures in the field of gambling provided that the criteria for proportionality specified below have been respected:
1. Criteria for Justification
– Maintenance of the public order, whose notion may vary from one country to another,71 prevention of fraud and other criminal activities72
– Limitation of the exploitation of the human passion for gambling,73 prevention of the damaging individual and social consequences of incitement to expenses74 and more generally consumer protection75
– Maintenance of the social order,76 protection of moral and cultural aspects77
– Prevention of gambling from being a source of private profit78
According to the Zenatti79 and Gambelli80 judgements, the following justifications are, respectively, permitted only as an additional justification or no valid justification:
– The financing of social activities must not be the fundamental justification but only an incidental beneficial consequence.81
– The avoidance of a diminution or reduction of tax revenue is no valid justification.82
As the ECJ expressly stated, however, the above-mentioned justifications must not simply be alleged, they must be based on a real and recognizable reason:
– The restrictions must reflect a desire to bring about a genuine diminution of gambling opportunities.83 It is necessary to determine whether the national legislation actually serves the aims which might justify it.84 In so far as the State operators incite and encourage consumers to participate in games of chance to the financial benefit of the public purse, public order concerns relating to the need to reduce opportunities for gaming cannot be invoked by the national authorities.85
– The reasoning must enclose statistical or other evidence which lead to the conclusion that the justification ground is really existent.86
2. Proportionality Requirements
The ECJ equally made clear how the notion of proportionality should be understood with regard to national measures restricting gambling activities:
– In principle, the level of protection a Member State wishes to provide does in itself not affect the proportionality of national provisions. On the contrary the Member States can decide for themselves upon the system of protection which can differ from that adopted by another Member State.87
– The justifications invoked by a Member State must be accompanied by an analysis of the suitability and necessity of the restrictive measure adopted by that State.88
– The restrictions which the national legislation imposes must however, also with regard to the foreseen type of penalty, be proportionate in the light of the concrete aims in the particular case. It has to be assessed whether there are less restrictive alternative means which are equally effective.89 (E.g. even if the objective of the authorities of a Member State is to avoid the risk of gaming licensees being involved in criminal or fraudulent activities, it has to be carefully examined if there are no other means of checking the accounts and activities of gaming operators).90
– The proportionality of the imposition of restrictions has to be examined even more strictly where the supplier of the service is subject in his Member State of establishment to a strict regulation and control system.91
71 See Läära, para. 31; Omega, para. 31.
72 See Läära, para. 32; Zenatti, para. 30; Schindler, para. 60; Anomar, para 62 and 73.
73 See Läära, para. 32; Zenatti, para. 30 and 35.
74 See Zenatti, para. 30. and 35; Schindler, para. 60.
75 See Läära, para. 32; Anomar, para. 73.
76 See Schindler, para. 58; Läära, para. 32; Anomar, para. 62 and 73.
77 See Schindler, para. 60. Cf. Omega, para. 37.
78 See Schindler, para. 57.
79 See Zenatti, para. 36;
80 Gambelli, para. 61.
81 See Zenatti, para. 36; Gambelli, para. 61.
82 See Gambelli, para. 61.
83 See Zenatti, para. 36, Gambelli, para. 67.
84 See Läära, para. 33; C-243/01 Gambelli, para. 67; cf. Omega, para. 36.
85 See Gambelli, para. 69, 72
86 See Lindman, C-42/02, para. 26. The Danish Skattenministeriet states in its “Comments and corrections to the Draft Report” of 22 May 2006 that “it would be clearly self-contradictory for the ECJ to allow the Member states a margin of appreciation regarding the level of protection and then at the same time demand that the level of protection be justified with reference to e.g. statistical evidence (…) Lindman is not a judgement which deals with the gaming sector as such but rather with the taxation of winnings from the participation in a lottery organized in another Member state. (…) there is no indication that the ECJ should in Lindman have limited the margin of appreciation left to the Member states in this regard. As regards rules imposing a particularly heavy taxation of winnings from the participation in a lottery organized in another Member State, it is in our view evident that such rules cannot be seen as a part of the legislation set up to regulate gaming activities in the Member states’ own territories.” We would like to stress the following: The court underlined, that “(…) the reasons which may be invoked by a Member State by way of justification must be accompanied by an analysis of the appropriateness and proportionality of the restrictive measure adopted by that State (referring, to that effect, to its predecent case law Case C-55/94 Gebhard [1995] ECR I-4165, and Case C-100/01 Oteiza Olazabal [2002] ECR I-10981) adding that a justification of the measures in question has to be denied as the reasoning lacks “(…)statistical or other evidence which enables any conclusion as to the gravity of the risks connected to playing games of chance or, a fortiori, the existence of a particular causal relationship between such risks and participation by nationals of the Member State concerned in lotteries organised in other Member States. As the ECJ referred within the examination of the justifiability and proportionality of national measures rather broadly to evidence which enables any conclusion as to the gravity of the risks connected to playing games of chance its argumentation is in our opinion not limited to issues falling within the ambit of tax law or comparable circumstances than those underlying the Lindman case.
87 See e.g. Schindler, para. 61 and Läära, para. 35. Cf. Zenatti, para. 33.
88 See also C-55/94, Gebhard, ECR 1995, I-4165, and C-100/01 Oteiza Olazabal, ECR 2002, I-10981.
89 See Läära, para. 32; Zenatti, para. 36 and 38; Gambelli, para. 67.
90 See Gambelli, para. 72-74. The Danish Skattenministeriet states in its “Comments and corrections to the Draft Report” of 22 May 2006 that “the ECJ does not in Gambelli, points 73 and 74, limit the margin of appreciation of the Member States as regards their right to prohibit non-licensees (or in a monopoly system any other operator than the monopolist) from performing gaming activities within the Member States’ territories in situations where the nonlicensee is a licensee in another Member State. It only states that this is an element, which ought to be taken into consideration when assessing the proportionality of the sanctions imposed on operators having acted in breach of such a prohibition”. We are unable to agree with such a limitation of the scope of the proportionality test set forth by the Court. If the construction of the Skattenministeriet was correct, the decision by a Member State to prohibit/restrict or not a certain conduct would escape any proportionality control, only the choice of the type and extent of the penalty being subject to such a test. However, there is nothing in the Court’s reasoning which suggests that the proportionality test is exclusively applicable to the penalties/sanctions set forth by the national legislative prohibitions/restrictions and not to the prohibitions/restrictions themselves. On the contrary, Point 72 of the Gambelli decision clearly says that “the restrictions imposed by the Italian legislation must not go beyond what is necessary to attain the end in view”. It appears reasonable to state that this wording suggests that the mere fact of imposing a restriction/prohibition already falls under the proportionality test. This appears even more clearly from the opening sentence of Para. 73, where one reads that “the national court will also need to determine whether the imposition of restrictions (…)” “is a restriction that goes beyong what is necessary to combat fraud” (italics is ours). Notwithstanding this, we agree with the Skattenministeriet – and we wish to express our gratitude to it for having drawn our attention to this point – that it appears from the Gambelli case that the type or nature as well as the extent of the penalty are indeed an element that needs to be taken into account when conducting the proportionality test. This is why we have added the wording “also with regard to the foreseen type of penalty” at the beginning of this paragraph. Finally, the Court further maintained (Para. 73) that the fact that the “supplier is subject in his Member State of establishment to a regulation entailing controls and penalties” is another element which may be useful to properly conduct the proportionality review.
91 See Gambelli, para. 73.
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