EU Commission makes further inquiries into the gambling sectors of Member States

Rechtsanwalt Dr. Wulf Hambach

Hambach & Hambach Rechtsanwälte
Haimhauser Str. 1
D - 80802 München
Tel.: +49 89 389975-50
Fax: +49 89 389975-60
Attorneys-at-Law Dr. Wulf Hambach and Sarah Madden, Hambach & Hambach LLP

The study on the gambling sector in the European Union, conducted by the Swiss Institute of Comparative Law on behalf of the European Commission, confirms that there is considerable variance between the national laws and regulations in the Member States. The Study also found that these laws and regulations often lead to restrictions to the freedom to provide services and the freedom of establishment guarantees that are incompatible with existing EU Law. This also applies to the German part of the study, which is also based on the observations of Hambach & Hambach (appendix 5, p. 1761).

There are currently 10 infringement proceedings pending against 9 Member States pertaining to restrictions on the provision of gambling services. New infringement proceedings were initiated against Austria and France while a second set of proceedings were brought against Italy. These are in addition to proceedings initiated in April of this year against Denmark, Finland, Germany, Hungary, Italy, the Netherlands and Sweden (as reported in Betting Law News 06/05, 07/05 and 01/06). All proceedings relate to sports betting though the complaint against Austria also concerns the provision of casino services and discrimination on grounds of nationality. In these cases, the Commission wishes to verify whether the measures in question are compatible with existing EU law.

Official requests for information on national legislation restricting the provision of sports betting services have been sent to all Member States concerned. The letters of formal notice are the first step in an infringement procedure under Article 226 of the EC Treaty, where formal contact is made between the Commission and the Member State concerned. The decision to send letters of formal notice to Member States has been made on foot of complaints made by a number of service providers and on information gathered by Commission staff. The Member States in question then have two months in which to respond. The response has to adopt a position on the points of fact and of law.

Although the Commission has already received responses from some Member States, it is unlikely that any official decision on the next stage against these will be taken before the end of this year, though contact continues to be made with them at an operational level.

Depending on the response from the Member State, the Commission will decide to either not to proceed with the infringement procedure or to address a „reasoned opinion“ to the Member State, setting out the reasons why it considers there to have been an infringement of Community law and calling on the Member State to comply with Community law within a specified period. If the Member State fails to comply with the reasoned opinion, the Commission may decide to bring the case before the European Court of Justice.

Perhaps some Member States will recognise that their restrictions on sports betting services are in breach of Community Law and bring their national legislation into line. Infringement proceedings are regularly resolved at the “reasoned opinion” stage. If this is not the case with regard to these gambling sector infringement proceedings, the Commission will be forced to “go all the way to the last instance” as Commissioner McCreevy is quoted as saying in an interview in the German Spiegel Magazine on the 23/10/2006. However, due to the Commission’s limited power in this area and the cumbersome nature of infringement proceedings, “going all the way” will take a long time. It is conservatively estimated that infringement proceedings against a member state to the final instance for restrictions on sports betting would take a minimum of five years and most probably longer. As there are already Italian and German cases before the European Court of Justice, an outcome to these is likely before there is any conclusion to the Commission’s proceedings.