European Court of Justice hears case on legal protection with regard to sports betting

Rechtsanwalt Martin Arendts, M.B.L.-HSG

Arendts Rechtsanwälte
Perlacher Str. 68
D - 82031 Grünwald (bei München)
Several follow-up decisions to the ECJ’s Gambelli decision, a fundamental decision on the freedom to provide services with regard to sports betting, are at hand. As reported, the ECJ will probably pronounce its judgement in the joined cases of Placanica et. al. (Cases C-338/04, C-359/04 and C-360/04) in the course of this year. If the Court follows the Advocate General’s opinion on these three Italian cases, delivered on 16 May 2006, this would mean the factual end of the state monopoly on sports betting and games of chance in Germany.

Apart from that, there are several other proceedings from Italy asking for a preliminary ruling (Cases C-395/05, C-397/05, C-446/05 and C-191/06), concerning the freedom to provide services with respect to sports betting, pending before the ECJ. These cases concern criminal proceedings against agents having transferred sporting bets to a bookmakers licensed in another EU Member State. In these proceedings, the ECJ will have to decide on the question whether the freedom to provide services and the freedom of establishment can be evaded by national criminal sanctions and how these freedoms have to be interpreted with regards to sports betting.

The court will hold a hearing in another preliminary ruling proceeding from Sweden next week. On 3 October 2006, the Court’s Grand Chamber will deal with several questions raised by the Högsta domstolen in the case of Unibet (London) Ltd and Unibet (International) Ltd v Justitiekanslern (Case C-432/05). This proceeding, concerning the British bookmaker Unibet, deals with the vital question of legal protection against a national provision in violation of the freedom to provide services (Article 49 EC). The Swedish court asked whether the principle of effective legal protection required that a legal action establishing the violation of the freedom to provide services by a national provision had to be admissible (1st question).

The question of effective legal protection is particularly relevant in proceedings regarding temporary relief. The Swedish court asks whether temporary relief must be granted against a national provision allegedly in violation of Community law (2nd question). In this context, the Swedish court asks whether Community law criteria had to be applied in these proceedings (3rd question) and what those criteria should be (4th question).

The rulings on these questions will have significant effect on Germany as well. The Administrative Court of Appeal of North-Rhine Westphalia (Oberverwaltungsgericht Nordrhein-Westfalen), in its decision of 28 June 2006 (case-no. 4 B 961/06) regarding preliminary proceedings concerning the protection of a betting shop against a closing order, assumed that Community law may be suspended. It disapplied Community law and instead confirmed a national provision by rejecting the betting agent’s claim for temporary relief. The Bavarian Administrative Court of Appeal (Bayerischer Verwaltungsgerichtshof) ruled similarly. In case the ECJ answers the questions in the affirmative, the national courts will have to apply the primacy of Community law in preliminary proceedings as well. In case of doubt the court has to grant interim protection until the legal questions are resolved by a decision on the merits of the case.

The questions to be ruled upon by the ECJ in the Case C-432/05 (Unibet v Justitiekanslern):

1. Is the requirement of Community law that national procedural rules must provide effective protection of an individual’s rights under Community law to be interpreted as meaning that an action for a declaration that certain national substantive provisions conflict with Article 49 of the EC Treaty must be permitted to be brought in a case where the compatibility of the substantive provisions with that article may otherwise be examined only as a preliminary issue in, for example, an action for damages, proceedings concerning infringement of the national substantive provisions or judicial review proceedings?

2. Does the requirement of effective legal protection under Community law mean that the national legal order must provide interim protection, through which national rules which prevent the exercise of an alleged right based on Community law may be disapplied in relation to an individual so that he is able to exercise that right until the question of the existence of the right has been finally settled by a national court?

3. If the answer to Question 2 is in the affirmative: Does it follow from Community law that, where the compatibility of national provisions with Community law is being challenged, in its substantive examination of an application for interim protection of rights under Community Law a national court must apply national provisions governing the conditions for interim protection, or in such a situation must the national court apply Community law criteria for interim protection?

4. If the answer to Question 3 is that Community law criteria must be applied, what are those criteria?