Luxembourg, 07/03/2007 (Agence Europe) - On 6 March, the European Court of Justice issued a ruling on the rules governing collectors of sports bets in Italy, Messrs Placanica, Palazzese and Sorrichio (in joined cases C-338/04, C-359/04 and C-360/04). The fines levied on these three intermediaries acting for UK company Stanley International Betting Ltd (Stanleybet) for collecting bets without the necessary authorisation have been cancelled but the ruling does not clear up all the grey areas surrounding the case, sending some issues back for Italian courts to decide upon.
'It is important to stress that it's also a landmark ruling for consumers across the EU,' said Stanleybet's Deputy Managing Director Adrian Morris at a press conference, adding that it should send a 'clear warning message' to other member states trying to protect their tax interests in ways that contravene EU law. Close sources suggest, however, that the Court of Justice's conclusions do not necessarily apply to other cases, which are slightly different.
The three intermediaries did not hold the required authorisation from the Italian authorities because they were unable to obtain it under Italian legislation which restricted the number of licences for sports betting in 1999 to 1000. Publicly quoted companies were ineligible for the calls for tender for the licences in any case, and Stanleybet is quoted on the London Stock Exchange. Stanleybet's Italian representatives therefore found themselves unable to obtain the necessary police authorisation and were taken to court in Larino. The Larino court decided to refer the case to the European Court of Justice over whether the legal procedures were compatible with EU law.
For several years, Italy has been pursuing a policy of expanding activity in the betting and gaming sector to draw players away from clandestine betting and gambling, increase tax revenue and prevent the proceeds of gambling being used for criminal ends. To reduce illegal gambling, Italy requires transparency about intermediaries' shareholders, to the extent that individual shareholders can be identified at any time. This is not possible for companies quoted on the stock exchange, whose shareholders may change from one day to the next, which is why such companies were subject to a blanket exclusion. To justify this, the Italian authorities invoked Articles 45 and 46 of the EC Treaty, whereby national legal systems can restrict competition in the interests of public policy. Although an earlier Italian court ruling in the Gesualdi case backed this justification for the legislation in question, the European Court of Justice ruled that 'the blanket exclusion of companies from tender procedures for the award of licences goes beyond what is necessary in order to achieve the objective' and 'there are other ways of monitoring the accounts and activities of operators which impinge to a lesser extend on the freedom of establishment and the freedom to supply services'.
On the maximum number of licences, the Court of Justice acknowledges not having sufficient information and directs Italy's courts to determine whether Italy's legislation genuinely contributes to the objective of preventing the use of gambling for criminal ends.
This ruling may have serious repercussions because it covers issues also found in other cases currently before the courts. Four other requests for preliminary rulings from various Italian courts have been suspended pending the ruling in the Stanleybet case. The European Commission has launched a dozen or so cases of similar legal proceedings against member states (France, Germany, Austria, the Netherlands, Hungary, Denmark, Sweden, Finland and two against Italy).
The European Commission department responsible for these infringement cases will take note of the Court of Justice ruling at their meeting on 31 March and decide whether to send reasoned opinions to France, Italy and Austria. Stanleybet's Adrian Morris hopes the Court of Justice ruling will encourage the Commission to pull out the stops to resolve this issue, which has been dragging on for years without showing any great signs of progress.
Various Members of the European Parliament have already reacted. Andreas Schwab (EPP-ED, Germany) has published a press release noting that the German state's state lottery monopoly will have to be reviewed. His colleague Malcolm Harbour, the single market coordinator for the EPP-ED, added: 'Many EU countries are openly flouting internal market rules and discriminating against legitimate and well-managed sports betting activities, including major UK operators. The Placanica case brings us closer to creating a genuine single market also in the gambling sector.
In an attempt to appease European Commission wrath and maximise tax revenue, the Italian authorities granted more than a thousand extra licences in 2006 (Barsani-Visco ruling) but court sources suggest that these late measures will not be enough to win back the Commission's confidence in Italy's anti-competitive protectionism. (cd)