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High level of consumer protection for online gambling in EU

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However, as a monopoly is an unusually restrictive measure, it must be ascertained that the national authorities really intend to ensure a particularly high level of consumer protection with regard to the objectives relied on, and whether, having regard to the level of protection sought, the establishment of a monopoly could actually be considered necessary.(1) In this context, it is the Member State wishing to rely on an objective capable of justifying the restriction of the freedom to provide services which must supply the court called on to rule on that question with all the evidence of such a kind as to enable the court to be satisfied that the measure does indeed comply with the requirements deriving from the principle of proportionality.(2)

In the Gaming machines case, the EFTA Court, examined the introduction of an exclusive right for the operation of gaming machines of a fully state-owned public company supervised by the relevant Norwegian Ministry. It considered that the national legislation did not opt for a total ban, but for a monopoly system with a view to reducing the risk of gambling addiction to a level which it deems acceptable and to reduce crime and malpractice. In such a situation, the necessity test consists of an assessment of whether the monopoly option is functionally needed in order to reduce the problems to the level opted for, or whether this reduction could equally well be obtained through other, less restrictive means such as admitting private operators under a stricter licencing regime. The EFTA Court noted, as regards the objective of reducing crime and malpractice, that Norway “failed to demonstrate that a licensing scheme allowing private operators, if necessary with more restrictive rules on who may qualify, will not be equally effective as an exclusive right [for the monopoly operator] in preventing money laundering and embezzlement”. Nonetheless, it concluded that taking into account the public interest objectives considered as a whole, including the one of fighting gambling addiction, the exclusive right system is likely to be more effective, in the end, than the other available regulatory means. (3)

On the level of protection, the EFTA Court ruled in the Ladbroke case that “if it turns out that the national authorities have opted for a rather low level of protection, it is less probable that a monopoly is the only way of achieving the level of protection opted for. In that case, it is more likely that less restrictive means, for instance in the form of a licensing system […] could suffice”.(4)

National authorities will therefore be more easily able to justify an exclusive right scheme if they can demonstrate that the relevant legislation entails a high level of protection which could not be ensured with the same efficiency under a normal licensing system.

1 Dickinger and Ömer, par. 71; Case Zeturf, par. 47.

2 Stoß and Others, par. 71; Dickinger and Ömer, par. 54.

3 See par. 49-52 of the judgment.

4 Par. 59 of the judgment.

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