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ECJ to Test German State Treaty on Gaming

3rd December 2009 9:13 am GMT

Two further gambling cases are to be heard by the European Court of Justice next week involving Carmen Media Group and Winner Wetten, both concerning the German prohibition of sports betting.

On Tuesday 8th December the ECJ will hear Case C-46/08, a reference for a preliminary ruling from the Schleswig-Holstein Administrative Court in Germany. Lodged on 30 January 2008, the case involves Gibraltar's Carmen Media Group Ltd v the State of Schleswig-Holstein and the Minister of Interior.

The Schleswig-Holstein administrative court has referred two principle questions to the ECJ.

Firstly, is Article 49 of the EC Treaty to be interpreted as meaning that reliance on the freedom to provide services requires that a service provider be permitted, in accordance with the provisions of the Member State in which it is established, to provide that service there as well - in the present case, restriction of the Gibraltar gambling licence to 'offshore bookmaking'?

And secondly, is Article 49 of the EC Treaty to be interpreted as precluding a national monopoly on the operation of sports betting and lotteries (with more than a low potential risk of addiction), justified primarily on the grounds of combating the risk of gambling addiction, whereas other games of chance, with considerable potential risk of addiction, may be provided in that Member State by private service providers, and the different legal rules for sports betting and lotteries, on the one hand, and other games of chance, on the other, are based on the differing legislative powers of the Bund (federal government) and the Länder (state government)?

If the second question is answered in the affirmative, the Schleswig-Holstein court will also seek clarification as to whether Article 49 of the EC Treaty is to be interpreted as precluding national rules which make entitlement to the grant of a licence to operate and arrange games of chance subject to the discretion of the competent licensing authority, even where the conditions for the grant of a licence as laid down in the legislation have been fulfilled?

Also, is Article 49 of the EC Treaty to be interpreted as precluding national rules prohibiting the operation and brokering of public games of chance on the internet, in particular where, at the same time, although only for a transitional period of one year, their online operation and brokering is permitted, subject to legislation protecting minors and players, for the purposes of the principle of proportionality and to enable two commercial gambling brokers who have previously operated exclusively online to switch over to those distribution channels permitted by the State Treaty?

On Wednesday 9th December the ECJ will hear case C-409/06 involving Winner Wetten GmbH v the Mayor of Bergheim, referred by the Administrative Court of Köln on October 9th 2006.

The administrative court seeks the ECJ's opinion on whether Articles 43 and 49 of the EC Treaty are to be interpreted as meaning that national rules governing a State monopoly on sports betting, which contain impermissible restrictions on the freedom of establishment and the freedom to provide services enshrined in Article 43 EC and Article 49 EC, inasmuch as they do not serve to limit betting activities in a consistent and systematic manner within the terms of the Court's case-law (judgment in Case C-243/01 Gambelli and Others [2003] ECR-13031), may still continue to apply for a transitional period on an exceptional basis, notwithstanding the primacy of directly applicable Community law? Furthermore, if the question is to be answered in the affirmative: what conditions need to be met for the purpose of derogating from that primacy and how is the transitional period to be determined?

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