The European Court of Justice today delivered the its long-awaited verdict for the Placanica case (criminal proceedings against Massimiliano Placanica and Others) and in doing so ruled that the Italian criminal penalties for the collecting of bets by intermediaries acting on behalf of foreign companies are community law.
At stake in the case was whether the Italian courts have the right to block Italian agents from taking bets on behalf of foreign bookmakers, and the court concluded that an EU member state may not apply a criminal penalty for failure to complete an administrative formality where, in breach of Community law, such completion is refused or rendered impossible by that member state.
Representatives from both sides of the debate over whether Europe's borders should be opened up to allow competition in the gambling space are claiming victory.
The European Betting Association (EBA) said today that the ruling "puts a further nail in the coffin of the state-monopoly model in the gambling sector."
The association stated, "This is a landmark decision building further on the jurisprudence of the ECJ in Gambelli (C-243/01) and one which the European Betting Association hopes has the potential to act as a guide to those EU member states and national authorities which must adapt their national legislation and regulatory models so as to become compliant with the EU Treaty of Rome.
"Furthermore, all attempts at intimidation and criminalization of these businesses and their executives and local suppliers are to cease immediately, while practical solutions, which are compatible with European law, are sought."
The Placanica verdict comes nearly four years after the Gambelli verdict, which also involved Italian betting agents for foreign operators. Both cases address the question of whether the Italian law restricting betting activities to operators licensed in Italy is compatible with the EU principles of freedom of establishment and freedom to provide services.
The Gambelli ruling of 2003 clarified that restrictions imposed by member states on their gambling markets are compatible with Articles 49 (freedom to provide services) and 43 (freedom of establishment) only if they are justified on the grounds of public order, security or health.
According to the EBA, "The Placanica ruling clarifies Gambelli and is even more explicit about the ECJ’s opinion on this matter."
Former ECJ Advocate General Siegbert Alber concurs.
"Monopolies cannot and should not be the only means of regulating gaming," Alber said. "Granting licenses can serve the same purpose. The reasons given in the Placanica case for Italy's monopoly are much more honest than the pronouncements made by other member states. At least Italy admits that its approach is designed to increase revenues and to combat illegal gaming."
Tjeerd Veenstra, the legal spokesman for the European Lotteries, doesn't see it this way. He called the ruling "a good outcome" for the organization, which very adamantly supports member states' rights to block foreign operators.
The European Lotteries welcomes the ruling, which the organization interprets to recognize that member states can restrict gambling and betting activities.
EL President Winfred Workman expanded on this.
"In order to draw players away from illegal offers," Workman explained, "authorized operators must represent a reliable, but at the same time attractive alternative to a prohibited activity. This may mean offering an extensive range of games, plus advertising and the use of new distribution techniques. In line with its ruling on Läärä, the court confirms that a member state has the right to decide on whether the number of operators it allows is sufficient."
He added, "This includes the option to give an exclusive right to one operator."
Click here to view the court's official press release addressing the verdict.