In early September the European Court of Justice in Luxembourg ruled upon the Anomar case in Portugal (C-6/01, Associaçno Nacional de Operadores de Máquinas Recreativas and Others versus the Portuguese State). Anomar, an association of Portuguese gaming machine operators, had contested a Portugese law that prohibits games of chance from taking place anywhere outside of land-based casinos. Anomar argued that such a prohibition violates the European Community's rules on freedom to provide services, which essentially dictate that no European state's legislation should impede the activities of a service provider that lawfully provides similar services in the different European state in which it is based.
Inevitably, however, the court decided that in the case of Portugal's games of chance restrictions, the laws are justified by concerns for public interest. State sanctions that seek to protect consumers and maintain societal order can take precedence over a European company's freedom to provide cross-border services.
With that in mind, what does the decision mean for I-gaming operators, not just in Portugal, but in all of Europe?
We asked the experts:
What is the significance of the Portuguese Anomar case and what are the implications for European gaming operators?
Thibault Verbiest: In this case, similar to the 1999 Läärä case, the EC Court confirmed its earlier decisions concerning the compatibility between the freedom to provide services and restrictive off line gaming legislation. Moreover the court stated that "it is for national authorities to consider whether, in the context of the aim pursued, it is necessary to prohibit activities of that kind, totally or partially, or only to restrict them and to lay down more or less rigorous procedures for controlling them."
Nevertheless, one may not forget that the present case does relate to a land-based operation and not to online gaming services. Considering the de facto cross-border character of online services, the real question to be answered remains open: To what extent can a land-based restrictive gaming policy be effective or be enforced in an online environment?
In this view, more important will be the court's Nov. 6 decision in the notorious Gambelli case, the first case concerning online gambling brought before the highest European Court. If the court follows the opinion of Advocate General Alber, the door to a single European gaming area could be opened.
Thibault Verbiest obtained his law degree at the University of Brussels and has advanced degrees in Economic Law (University of Brussels) and in International Entertainment Law (University of San Diego). He is a lawyer in information technology, a partner with the firm "Ulys " based in Brussels and Paris, and an attorney at the Bars of Brussels and Paris. He is the co-author of the "Internet Gambling Report IV" (USA) and of the book "Le Droit de l'internet et de la société de l'information", Larcier, Brussels. Thibault Verbiest teaches at the Law Schools of the University of Liège and of the University of Paris X. He is also chairman of the federal agency "Observatoire des Droits de l'Internet - Observatorium van de Rechten op het Internet" (Belgium).
Philippe Vlaemminck: Under Portuguese law, the operation of slot machines is subject to a double restriction. First, the right to operate slot machines is reserved to the State. Private entities are allowed to operate slot machines if they are incorporated as a public limited company and if they have concluded an administrative licensing agreement with the Portuguese State. The operating license is granted on the basis of a tender procedure which does not discriminate on grounds of nationality. Second, the operation of slot machines is in principle only possible in casinos located in permanent or temporary gaming areas as designated by law.
In the court's view, the operation of slot machines should be tackled exclusively under the rules of free movement of services and it cannot constitute an activity relating to goods within the meaning of the EC treaty.
The European Court of Justice found that the Portuguese gaming legislation constitutes an impediment to Article 49 EC Treaty, but added that these restrictions are not discriminatory and not disproportionate in view of the public interest objectives (limitation of the exploitation of the human passion for gambling and to avoid the risk of crime and fraud) underpinning the Portuguese gaming legislation.
Given these circumstances, the court concluded that Article 49 EC Treaty does not preclude such national legislation.
The court pointed out that member states enjoy a large discretionary power in regulating games of chance. This discretionary power is not limited by the fact that other member states have regulated games of chance in a more liberal manner.
The court also argues that the choice of methods for organizing and controlling the operation of games of chance falls (e.g. administrative licensing agreement and restricting the operation of games to certain places) within the power of assessment of the national authorities.
The court confirmed its existing jurisprudence ( Schindler, Läärä & Zenatti). In Anomar the court clarified that the means of distribution of games (the slot machines) are not the determining factor, but the content (the games of chance). To the extent that games can de distributed by different means, including "information society " means, the distribution mode is thus irrelevant. In fact, the court mentioned this already in Zenatti (both fax and Internet transmission were covered by the ruling). For the I-gaming industry, it means that the cross-border delivery of I-gaming service is subject to the same rules as the terrestrial games.
States decide about content, volume, place and operators within their jurisdiction if genuine public order concerns are pursued.
Philippe Vlaemminck is a Belgian attorney-at-law with expertise in both European law and Lottery legislation. He worked part-time from 1984 until 1994 at the European Institute of the Ghent University teaching about different issues of European law (Internal market, trade, etc.) and practiced law at the same time. In 1999 he was visiting Professor of the Ghent University teaching a course on European Judicial Protection. He has spent more than ten years as the external legal adviser of the Belgian National Lottery and has presented the Belgian Government at the European Court of Justice in the Schindler, Läärä and Zenatti cases. For more than four years he has been the external legal adviser of the European State Lottery and Toto Association, monitoring all European Union legal issues and preparing all position papers with the European legal Affairs working group. He is also Editor of the Ellegal- The European affairs newsletter of the Association. He has advised several other lotteries in Europe, including the Dutch Lotto, Latvijas Loto, the Loteria Nacionale of Roumania, and the Israel Sport Betting Board.