Islj 2009 3-4 - TMC Asser Instituut

This organisation brought together the state’s jurisdiction in terms of
gambling and betting, whilst respecting the jurisdiction corresponding
to each of the Autonomous Communities recognised by the
Constitution. The ONLAE was thereby given
“responsibility for the organisation and management of lotteries, betting
and gambling that are within the State’s jurisdiction, assuming the
jurisdiction currently granted to the Servicio Nacional de Loterías regarding
the holding and authorisation of draws, lotteries, raffles, random
combinations, gambling and betting that covers all of the national territory
and that is currently the jurisdiction of the Patronato de Apuestas
Mutuas Deportivas Benéficas with regard to the exclusive organisation
and distribution of football pools and any other betting competitions that
take place based on the results of sporting events.”
The structure, composition and functions of the ONLAE was initially
established by means of Royal Decree 904/1985, dated 11th June,
that was subsequently amended by Royal Decree 1651/1995, dated 13th
October, which shall not be explained here for obvious reasons.
However it is worthwhile to briefly describe the current regime of
ONLAE (currently named LAE, “Loterías y Apuestas del Estado”),
which is defined by Royal Decree 2069/1999, dated 30th December,
approving the Articles of Association of the public owned company
Loterías y Apuestas del Estado (LAE), and modified by Royal Decree
1029/2007.
The objective of this new regulation is to modernise ONLAE,
modifying its structure and adapting it to its current functions in
order to achieve efficient management that is able to achieve the goals
set. Essentially, the main novelties in this new regulation were:
1. ONLAE was converted into a public owned company called
Loterías y Apuestas del Estado (LAE), assigned to the Ministry of
Finance and Taxation 10 .
2. LAE would be governed by Private Law, apart from matters relating
to the regulation of games within the state’s jurisdiction and
with regard to the authorisation regime granted by the state, which
would be governed by administrative law.
3. Regarding the subject in hand, one of the functions entrusted to
LAE (article 41.b of its articles of association) was the “management,
exploitation and marketing of charitable sports pari-mutuel betting, in
any of its forms, as well as any other betting competitions that are held
based on the results of sporting events.”
4. Furthermore, one of the most important functions attributed to
LAE was the granting of authorisations for the organisation of betting
(and other games) that exceeded the limits of an Autonomous
Community (such as, for example, sports betting related to the
Spanish League Championship). In this sense, article 5 of its articles
of association states that “The public owned company Loterías y
Apuestas del Estado is exclusively responsible for the authorisation of
the organisation and holding of draws, lotteries, raffles, random combinations
and, in general any bet whose area of development or application
exceeds the territorial limits of a specific Autonomous
Community and sports betting, regardless of their territorial scope, as
well as payment of the corresponding fees.” This is one of the controversial
powers of LAE as it makes it, apart from a provider of these
services, both a judge and party of the sports betting sector.
The truth is that, according to the most recent data published by
LAE, the eighty year-old La Quiniela is still in very good health, as in
the business year 2008 sales of La Quiniela amounted to 557 million
Euros, with an average of approximately two and a half million bets
made per week.
III.- Sport and Sports Betting
As has already been explained (remember that the income obtained
from the activities of the Patronato was almost entirely given to charity),
as in many other neighbouring countries, the State has always
intended to use part (if not all) of the income it receives from gambling
(and, in particular, regarding the matter in hand, from sports
betting), for social purposes and public work (although it is fair to say
that this percentage is increasingly small) and, namely, the promotion
of Sport (which is an obligation that the Constitution imposes on the
public authorities in its article 43, which proclaims that “The public
authorities shall promote health education, physical education and
sport 11 ”).
In that sense, even the ECJ, in the aforementioned Schindler 12 case,
stated that “it is worth highlighting that lotteries can make a significant
contribution to the financing of philanthropic or general interest activities
such as social work, charity work, sport or culture.” Precisely because
of this, it is justifiable (as long as it is not discriminatory) for national
authorities to not only restrict this activity but also to determine the
allocation of the profits made.
An example of the foregoing is the historic concession that the
Organización Nacional de Ciegos Españoles - National Organisation for
the Blind - (hereinafter “ONCE 13 ”), has with regard to the “prociegos”
coupon. As explained by case law at court 14 , “the justification for
the concession that has historically been maintained regarding the
exploitation of the prociegos coupon as a source of financial resources for
the entity resides in the need to provide it with sufficient financial
resources for it to fulfil the relevant public interests that it has assumed
since its creation and continues to assume; these funds are allocated by the
State through the authorisation of this draw rather than by assigning an
amount charged to the State budget and it therefore constitutes a source
of income for the ONCE that is essential for the performance of the activities
that it carries out in the public interest.”
In this sense, regarding sports betting and Sport, when the National
Professional Football League (hereinafter “LFP”) was created in 1983
during a period of serious financial crisis at Spanish football clubs 15 , the
government (through the National Sports Council), intending to heal
the football clubs’ accounts, signed an agreement with the LFP that
determined the debt of Spanish football clubs and established the way
in which it should be financed: namely, with 2.5% of the revenue for
La Quiniela. Therefore, the form envisaged to solve the financial problems
of Spanish football was partially based on the revenue obtained
from sports betting through “La Quiniela” (The Pools).
Unfortunately, this first attempt at solving the financial problems
of Spanish football was unsuccessful and therefore, at the end of the
80s, the government took further measures to deal with the problem
by promulgating Law 10/1990, dated 15th October, regarding Sport
(hereinafter, the “Sport Law”). It should be taken into account that
when this Law was published, the football clubs’ accounts had accumulated
a debt of 35,000 million pesetas.
For this purpose the Sport Law envisaged the implementation of
the so-called Second Corrective Plan 16 , which would take place in two
specific areas. On the one hand, in order to eliminate the debt accu-
9 In its article 87.5, the Law resolves to create
“The Organización Nacional de
Loterías y Apuestas del Estado, reporting
to the Ministry of Finance and Taxation,
which shall be made up of the former
Patronato de Apuestas Mutuas Deportivas
Benéficas and the current Servicio
Nacional de Loterías, reporting to the
Ministry of Finance and Taxation.”
10 As shall be analysed later, it is worth noting
the close link that has always existed
between the jurisdictions related to the Tax
Department and this game, which corresponds
to its status as a state monopoly.
11 Which, on the other hand, in article
148.1.19 envisages that Autonomous
Communities can assume jurisdiction in
this area (The Autonomous Communities
can assume jurisdiction related to the
“promotion of sport and proper use of
leisure facilities” as stated literally in this
regulation).
12 Decision of the Court of Justice passed
on 24th March 1994, Schindler (C-
275/92, Rec. p. I-1039).
13 The ONCE is a non-profit corporation
whose aim is to improve the quality of
life of blind people and people with visual
disabilities in Spain. It is a type of
social welfare institution. Some of its
charitable activities are carried out
through its Foundation, which is funded
with 3% of the gross sales revenue from
the gambling products that the
Organisation exploits with the State’s
administrative authorisation. The gambling
products are the ONCE’s financial
powerhouse and directly or indirectly
support almost 110,000 people.
14 Decision number 1162/2002, dated 24th
October, of the Madrid High Court of
Justice (Administrative Disputes
Chamber, Section 9).
15 Which, due to the World Cup held in
Spain in 1982, were obliged to invest millions
in their stadiums leading to a debt,
by the middle of the 80s, of more than
20,000 million pesetas.
16 In its Additional Provision 15, the Sport
Law stated that “In order to rectify the
financial situation of the professional football
clubs, the National Sports Council
shall formulate a Corrective Plan that
shall include an agreement to be signed
between this body and the National
Professional Football League.”
A RT I C L E S
2009/3-4 101