Academic journal article The International Sports Law Journal

Sports Betting and European Law

Academic journal article The International Sports Law Journal

Sports Betting and European Law

Article excerpt

1. The establishment of the principle of proportionality in gambling cases (1)

A study of the handling of sports betting cases by the European Court of Justice would not be complete without examining the handling of gambling in general by the ECJ. There are two ECJ decisions that ought to be mentioned at this point, although neither of them is of sports content, they played a major role in sports betting case law as all subsequent ECJ decisions relating to sports betting are based on them.

The first relevant case concerning the issue of betting that came before the ECJ was the eminent Schindler case. (2) In this case the Schindlers, acting as independent agents for a German lottery, dispatched to the UK, certain advertisements and application forms for a lottery organised in Germany urging the recipients to participate. The envelopes also contained a pre-printed reply envelope. Many Member States argued that because the scheme was, objectively, a gambling one and involved unsecured winnings and because participation in the game is in the realm of entertainment, the activity should not be considered an economic activity within the meaning of the Treaty. (3)

The ECJ (4) rejected these views and made it clear that such activity is, in fact, economic and indeed, that lottery activities are not related to goods but to services and fall therefore within the scope of the freedom of the provision of services. The fact that the participants' winnings are not secure isn't enough for the whole activity to be deemed non economic. The agent works on profit and the amount of money raised by the organiser of the game is not all awarded to the winner. With regard to the subject of entertainment, the ECJ has made very interesting parallels with the amateur sport, (5) where the nature of entertainment does not negate the fact that it falls within the rule of the freedom of the provision of services.

Finally, with regard to allegations that gambling is dangerous and should be prohibited, the Court responded that, in contrast with other illegal activities such as illegal drugs, the policy of the Member States is generally not to prohibit gambling but rather to monitor its avail-ability to the public. (6) The European Union has not yet decided whether or not to adopt legislative measures to orchestrate the legislation of the Member States (7) regarding gambling; it is evident that there is uncertainty about the extent of discretion enjoyed by Member States (8) with regard to limiting the availability of gambling services. (9), (10)

However, the ECJ has accepted that there are three reasons that may justify, not an absolute prohibition but the restriction of gambling and its control by the State and one argument that justifies a special treatment of gambling. Firstly, the ECJ has accepted that there are moral, religious and cultural aspects that "prohibit" making gambling a source of private profit. Secondly, gambling involves a high risk of crime or fraud, given the size of the amounts at stake, particularly when operated on a large scale. Thirdly, it is the incitement to spend which may have damaging effects on the individual and social consequences. On the other hand gambling may make a significant contribution to the financing of benevolent or public interest activities such as social work, charity work, and sport or culture. (11)

The ECJ, therefore, concludes that those particular factors justify national authorities having a sufficient degree of latitude in determining what is required in order to protect the players and, more generally, in the light of the specific social and cultural features of each Member State, to maintain order in society, as regards the manner in which lotteries are operated, the size of the stakes, and the allocation of the profits they yield. In those circumstances, it is for them to assess, not only whether it is necessary to restrict the activities of lotteries but also whether they should be prohibited, provided that those restrictions are not discriminatory. …

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