Gambling and the courts: a never-ending story? - Casinos.ch

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Gambling and the courts: a never-ending story? - Casinos.ch

Everest Conference: Multi Channel Betting & Gambling 2008

Gambling and the courts:

a never-ending story?

gaminglaw.de

germangaminglaw.blogspot.com

Martin Arendts,

ARENDTS ANWÄLTE

www.gaminglaw.de

1

February 2008


The courts from the perspective

of private operators:

� Court decisions are essential for the

business case:

� Courts might open up markets …or

� foreclose them for private operators

and do not forget criminal proceedings: A

CEO in prison is certainly no good PR

gaminglaw.de

germangaminglaw.blogspot.com

2

February 2008


Betting & Gambling:

Business case or mine field?

Business case:

� Courts might effectively tear down state

monopolies, opening up new markets.

� Europe, especially Germany, is a very

interesting market, revenues are

expected to rise, huge market potential

� A lot of state operators are bureaucratic

and not very creative.

gaminglaw.de

germangaminglaw.blogspot.com

3

February 2008


Betting & Gambling:

Business case or mine field? cont´d

Mine field:

� no legal certainty, even after the Placanica

decision of the ECJ (relevance of a license,

obtained in the county of origin?)

� criminalisation of private operators and sports

betting agents, prohibition of advertising

� Most politicians support state operators.

gaminglaw.de

germangaminglaw.blogspot.com

4

February 2008


Regulation of gambling:

Gambling is highly

regulated by national

law

gaminglaw.de

germangaminglaw.blogspot.com

a paradox?

� EU law: no secondary

legislation (except EC

directive 98/34/EC)

Legal uncertainty:

Does EU law (basic freedoms) prevail?

Do national regulations fulfill the

Gambelli/Placanica Criteria of the EJC?

5

February 2008


EU law v. national law

� Several national courts expressly ignored

EU law > open legal conflict, e.g.

Administrative Court of Appeal of North

Rhine-Westphalia suspended basic

freedoms

� Operators can not approach ECJ directly

gaminglaw.de

germangaminglaw.blogspot.com

6

February 2008


gaminglaw.de

germangaminglaw.blogspot.com

Referral proceedings

� Divergent interpretation of the existing

case law of the ECJ

� Schindler

� Gambelli

� Lindman

� Placanica

� Ladbrokes decision of the EFTA Court

7

February 2008


gaminglaw.de

germangaminglaw.blogspot.com

Referral cases,

pending before the ECJ

� Liga Portuguesa de Futbal Profissional

(Case C-42/07)

� Nationale Loterij (Case C-525/06)

� Winner Wetten (Case C-409/06)

8

February 2008


gaminglaw.de

germangaminglaw.blogspot.com

Referral cases,

pending before the ECJ cont`d

� six joined cases from the Administrative

Courts of Giessen and Stuttgart

(C-316/07 et al.)

� Adminstrative Court of Schleswig,

reference for a preliminary ruling (decision

of 30 January 2008, file no. 12 A 102/06

9

February 2008


Germany: the main battlefield

in Europe

� Thousands of court cases before national courts

� 8 referrals from German courts to the ECJ

(Winner Wetten et al.)

� Criminal proceedings and prohibition orders

against private operators and betting shops

gaminglaw.de

germangaminglaw.blogspot.com

10

February 2008


Germany: the main battlefield

in Europe cont´d

� Deutscher Lotto- und Totoblock wants to

offer pan-European lottery (“EuroLotto”)

with jackpots in excess of 100 m €

� Two infringement procedures started by

European Commission

� letter of formal notice, 4 April 2006 (criminal sanctions)

� letter of formal notice, 31 January 2008 (Interstate Treaty)

gaminglaw.de

germangaminglaw.blogspot.com

11

February 2008


Legal situation in Germany

� No certainty after the landmark sports betting

decision of the Federal Constitutional Court (28

March 2006)

� Interstate Treaty on Gambling, effective 1

January 2008

� Anti-trust proceedings of the Federal Cartel

Office against Deutscher Lotto- und Totoblock,

hearing before the Federal Court of Justice on 29 April

2008

gaminglaw.de

germangaminglaw.blogspot.com

12

February 2008


Legal situation in Germany

cont´d

� State operators (WestLotto) lost unfair

competition cases against private operators,

decisions of the Federal Court of Justice

(Bundesgerichtshof) of 14 February 2008

� Anti-trust proceedings of the Federal Cartel

Office against Deutscher Lotto- und Totoblock,

hearing before the Federal Court of Justice on 29 April

2008

gaminglaw.de

germangaminglaw.blogspot.com

13

February 2008


Decision of the Federal Constitutional Court

of 28 March 2006

� Current legal situation not compatible with the

freedom to choose one’ s profession (Art. 12

German Constitution)

� Transitional period until the end of 2007:

state operators have to restrict advertising and

care for problem gamblers

� Legislator has to enact new gambling

regulations: coherent and consistent regulations

gaminglaw.de

germangaminglaw.blogspot.com

14

February 2008


Open questions after the decision of the

Federal Constitutional Court

� Two options: liberalisation (licenses for private

operators) or restricted state monopoly

(limitation for marketing and sales)

� political discussion

� National law v. Community law

� legal discussion

(Administrative Court of Cologne referred German case to ECJ)

gaminglaw.de

germangaminglaw.blogspot.com

15

February 2008


Authorities v. private operators and sports

betting agents

� Criminal proceedings (Art. 284 et seq. German

Criminal Code)

� Prohibition orders

� Actions against advertising for “illegal” gambling

(example: betandwin, now bwin)

� Plans: blocking gambling websites and

restricting payments (UIGEA model)

gaminglaw.de

germangaminglaw.blogspot.com

16

February 2008


State operators v. private operators

� WestLotto (state operator of North-Rhine Westphalia)

sued several private remote gaming operators, claiming

unfair competition:

However, WestLotto not licensed to act as a bookmaker.

� Deutscher Lotto- und Totoblock trademarked generic

terms and invoked infringement of trademarks:

In 2006, Federal Court of Justice ruled to revoke the

trademark “LOTTO”, revocation procedure with regard to

“TOTO” pending

gaminglaw.de

germangaminglaw.blogspot.com

17

February 2008


Anti-trust proceedings against Deutscher

Lotto- und Totoblock

� Federal Cartel Office (Bundeskartellamt)

declared behaviour of Deutscher Lotto- und

Totoblock to be illegal and against German and

EU competition law.

� Main points of the decision of the Cartel Office

upheld by the Court of Appeal of Duesseldorf

and Federal Court of Justice in preliminary

proceedings, main proceeding now pending

before the Federal Court of Justice

gaminglaw.de

germangaminglaw.blogspot.com

18

February 2008


Legal situation until 2007

� Cross-border transmission of

sporting bets is not punishable

(Court of Appeal of Munich et al.)

� Depending on the state/court:

temporary relief against prohibition

orders (Administrative Court of Appeal of Schleswig-

Holstein and of Saarland, most other administrative courts

suspend Community law)

gaminglaw.de

germangaminglaw.blogspot.com

19

February 2008


Legal situation since

1 January 2008

� Interstate Treaty on Gambling prohibits

provision of gambling services over the

Internet and other telecommunication

systems

� Depending on the state/court: temporary

relief against prohibition orders (Administrative

Courts of Stuttgart and Frankfurt granted protection, while the

Administrative Court of Chemnitz denied it)

gaminglaw.de

germangaminglaw.blogspot.com

20

February 2008


New Interstate Treaty on Gambling

(Glücksspiel-Staatsvertrag)

� Aim: to uphold the state monopoly for at

least four more years

� regulates lotteries and sports betting and

contains provisions on casinos

� prohibits advertising for illegal gambling:

football club VfB Stuttgart filed suit

gaminglaw.de

germangaminglaw.blogspot.com

21

February 2008


Legal problems of Interstate Treaty

� Coherent and systematic regulation, as

requested by ECJ and EFTA Court?

� Market foreclosure compatible with EU

law and competition law?

� Requirements of Federal Constitutional

Court implemented?

gaminglaw.de

germangaminglaw.blogspot.com

22

February 2008


Where to from here?

� ECJ will have to decide referral cases and

infringement proceedings

� Will these decisions be accepted by

national politicians? > Introduction of a

liberalised market system?

� How will the national courts interpret the

new decisions of the ECJ?

gaminglaw.de

germangaminglaw.blogspot.com

23

February 2008


Place your bets!

� The market in Europe will dramatically

change over the next years.

� Political discussion has just started.

� Effective Lobbying essential

� Responsible gaming (code of conduct)

important for acceptance

gaminglaw.de

germangaminglaw.blogspot.com

24

February 2008


Thank you for your attention.

I am glad to answer any questions

you might have.

Attorney-at-law Martin Arendts,

ARENDTS ANWÄLTE

gaminglaw.de

germangaminglaw.blogspot.com

www.gaminglaw.de

http://germangaminglaw.blogspot.com

http://wettrecht.blogspot.com

25

February 2008

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