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Gambling case CJEU: C-375/17 Stanleybet v. Italy

Posted on 20 April 2019 by Kester Mekenkamp

On 19 December 2018 the Court of Justice of the European Union (“CJEU”) issued its ruling in the case Stanleybet versus Italy (C-375/17). The case concerned a reference for a preliminary ruling from Italy’s Council of State in proceedings instituted by online gambling operator Stanleybet (i.e. Stanley International Betting Ltd, a company registered in the United Kingdom, and Stanleybet Malta ltd., its subsidiary established in Malta). Stanleybet took the view that it had been prevented from participating in the tender for the concession for management of the Lotto, for which it deemed the concession to be in breach of EU law. The concession was awarded to a consortium with the name Lottoitalia Srl. by decision of 16 May 2016.

The CJEU was requested to answer inter alia the question whether the right of establishment (Art. 49 TFEU) and the freedom to provide services (Art. 56 TFEU) preclude a national system, as applicable in Italy, pertaining to an exclusive mono-concessionaire model for management of the Lotto, but not for other games, prediction games and betting.

In its answer the CJEU indicates that this sole concessionaire model constitutes an obstacle to the freedoms guaranteed in Articles 49 and 56 TFEU, which however could be justified by overriding reasons in the general interest. Concerning gambling these are in any case consumer protection and the prevention of both fraud and incitement to squander money on gambling. Administrative inconvenience as well as economic reasons do not constitute grounds that can justify a restriction on a fundamental freedom guaranteed by EU law, according to the CJEU. In this context, the Italian government argued that in the present case, the choice for a sole concessionaire model was “a response to the need to channel the game into a controlled system and to an approach of responsible management by restricting competition within that particular market”.

The CJEU notes that the identification of the objectives in fact pursued by the sole concessionaire model, and whether the obstacle satisfies the proportionality requirements in light of the objective(s) pursued, is within the jurisdiction of the referring court. The CJEU does make a first move by indicating that if indeed the objective of the Italian sole concessionaire model is to reduce competition in the particular market for the management of the Lotto, “then the sole concessionaire model appears to be able to achieve that objective”. The CJEU also explains that undistorted competition is liable to have detrimental effects, owing to the fact that operators would be led to compete with each other in inventiveness to make what they offer more attractive than what their competitors offer, and thereby to increase consumers’ expenditure on gaming and the risks of their addiction. Furthermore, the CJEU finds that the fact that a member state has a sole concessionaire model for the exploitation of lotto games in contrast to the regulation of other games of chance, “cannot, in itself, have an effect on the assessment of the proportionality of the rules at issue in the main proceedings, which must be assessed solely in the light of the objectives which they pursue”. Such a divergence in legal regimes is not, in itself, capable of affecting the suitability of such a sole concessionaire model for achieving the objective for which it was established, according to the CJEU.

A model like the one in Italy can be contrary to EU law, the CJEU notes, if it is found that the competent authorities pursue policies seeking to encourage participation in games of chance other than those covered by the sole concessionaire model rather than to reduce opportunities for gambling and to limit activities in that area in a consistent and systematic manner.

This is the most recent case in a list of proceedings before the CJEU that stem from disputes initiated by gambling operator Stanleybet. In the case C-186/11Stanleybet International and Others, Stanleybet challenged the Greek gambling monopoly. In case C-463/13Stanley International Betting and Stanleybet Malta, the operator contested the Italian concession for the organisation of different games of chance via a physical network of betting shops.

Questions? Please contact gaming@kalffkatzfranssen.nl.

 

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Kester Mekenkamp

Associate

About the author

Kester Mekenkamp is an associate at Kalff Katz & Franssen, where he works in the Practice Group Gaming. 

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