Luxembourg, 16/04/2007 (Agence Europe) - If the Court of Justice accepts the conclusions of the advocate general in case C-260/04, delivered on 29 March, the Commission's third decision against Italy with regard to restrictions to freedom of establishment on the gambling market will be confirmed. No matter what the independent bookmakers say, however, this does not mean that such restrictions are automatically incompatible with Community law. Rather, the arguments put forward by the Italian authorities were not sufficiently well founded in the case in point.
In 1999, the Italian authorities renewed 329 horse-race betting licences without a prior tendering procedure, and, at the same time, 671 new concessions were put out to tender and awarded. That meant that, of the supposed 1000 “new” licences, 329 had not really been available to new applicants. The Commission considered that this constituted an obstacle to freedom of establishment and service provision, since it failed to meet the requirements in terms of transparency and publicity, flowing from Articles 43 and 49 EC. Despite a formal notice being sent in 2001 and a reasoned opinion in 2002, the Commission did not receive an adequate response from Italy and saw no action being taken to redress the situation. It, therefore, took the matter to the Court of Justice on 17 June 2004, asking the Court to declare that the Italian authorities had violated the EC Treaty.
The conclusions of Advocate General Eleanor Sharpston clearly demonstrate that she felt none of the arguments advanced by Italy to be capable of rebutting the Commission's case. The argument that these automatic renewals were necessary to discourage clandestine betting during the period when all the applications were being considered, did not, in the opinion of Advocate General Sharpston, justify the measures taken. She felt that “it is difficult to imagine how the renewal or maintenance of the 329 old concessions without a tendering procedure could serve to prevent clandestine betting, or how the absence of transparency could be necessary for that purpose”
The Court will now give its verdict on this matter in the coming weeks, but the advocate general's conclusions would suggest that Italy can expect to lose. The conclusions are in line with several recent decisions, notably those in the Gambelli (see EUROPE 8581) and Placanica (see EUROPE 9381) cases, which each confirmed that various aspects of Italian management of its gambling market would have to be made to comply with Community law. The first hinted at what the second made clear: that any restriction to the freedom to provide services in this sector must be proportionate with the precise objective intended.
These decisions have often been seen, particularly by independent bookmakers, as an indication that member states are not allowed to restrict access to the gambling market. Justification, however, is provided for in Articles 45 and 46 of the EC Treaty, which allow a member state to impose such restrictions in the public interest. Eleanor Sharpston acknowledges that these Articles can be interpreted in such a way as to include other justifications than those specifically mentioned in the Treaty. In each case the Court examined the justifications, but has yet to find them valid.
In another case, the Court could come down on the other side, as the Court of the European Free Trade Association recently did, based on legislation very close to the EC Treaty, that combating gambling addiction was a legitimate justification for renationalising the slot machines sector in Norway (see EUROPE 9388). Nothing, then, is decided in advance with regard to the other member states - Denmark, Finland and Hungary - which currently find themselves at varying stages in similar procedures. It will all depend on the arguments they bring forward in support of their cases and the proportionality of the measures taken to achieve the stated ends. (cd)