The European Court of Justice (CJEU) today issued its preliminary ruling in the joint cases Costa and Cifone regarding the access of European operators to Italian gambling licences under the 2006 reformed Italian gambling legislation. In a press release, the CJEU confirmed that Member States “cannot protect vested economic interests” and “thereby discriminate against new operators under the aegis of consumer [or fraud] protection”
Here’s a summarised list of what the Court ruled:
- That a national restriction is justifiable only if it does “not have as a true objective the protection of the market positions of the existing operators”.
- “The very fact that the existing operators have been able to start up several years earlier than the operators unlawfully excluded ,[…] confers on them an unfair competitive advantage [which] […] constitutes a new breach of Articles 43 EC and 49 EC and of the principle of equal treatment.”
- As regards, possible justifications for unequal treatment “the objective of ensuring continuity, financial stability or a proper return on past investments for operators […] cannot be accepted as overriding reasons in the public interest”.
- The Court rejects the justification by the objectives of reducing gaming opportunities and combating criminality, when a Member State “has long been marked by a policy of expanding activity with the aim of increasing tax revenue”.
- The Court also points out that national measures intending to achieve such objectives must be proportional, consistent and systematic – Para 63. This is not the case if national measures, for example “rules on minimum distances were imposed exclusively on new licence holders and not on those already established”.
- “In order to enable any potential tenderer to assess with certainty the likelihood that such penalties will be applied to it, to preclude any risk of favouritism or arbitrariness on the part of the licensing authority […] it is therefore necessary [… to set out the circumstances for the withdrawal of licenses] in a clear, precise and unequivocal manner”.
- The Court further repeats its consistent case law that no penalties may be imposed on operators having been excluded from obtaining a license in breach of EU law.
The court also noted that the Italian legislation is not consistent with the claimed objectives of protecting consumers from gambling addiction and limiting gambling activity in Italy, pointing out that the aim of the Italian legislation is to protect incumbents and increase tax revenues.
Secretary General of the EGBA, Sigrid Ligné, commented on today’s ruling. He said: “This very positive ruling confirms that national legislation that opens up and regulates the gambling market may not discriminate against new operators but must guarantee fair market access.”