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ECJ Rules On Swedish E-Gaming Advertising Ban

by Ulrika Lomas, for LawAndTax-News.com, Brussels

12 July 2010


The European Court of Justice (ECJ) has issued a preliminary ruling, addressing questions relating to the compliance of Swedish gaming legislation with the EU Treaty.

While Swedish gaming law currently allows operators licensed in other member states to offer internet gaming services in Sweden, it prohibits the promotion of these services through Swedish media.

Under this law the chief editors of two leading Swedish newspapers “Expressen” and “Aftonbladet” are subject to criminal sanctions for carrying advertisements from gaming operators licensed in other member states, but would only face lighter administrative fines for carrying advertisements for unregulated Swedish operators.

In relation to the Swedish law, the ECJ confirmed previous case law by concluding in particular:

  • National legislation is appropriate for ensuring attainment of the objective pursued only if it genuinely reflects a concern to attain it in a consistent and systematic manner. In any event, those restrictions must be applied without discrimination (Para. 40 of the ruling in joined cases C-447/08 and C-448/08);
  • (...) if the persons carrying out the promotion of gambling organised in Sweden without a licence incur penalties which are less strict than those imposed on the persons who advertise gambling organised in other member states, then it must be stated that those arrangements are discriminatory and that the provisions of Paragraph 54(2) of the Lotterilag are contrary to Article 49 EC and, consequently, unenforceable against the persons being prosecuted in the main actions (Para.56 of the ruling in joined cases C-447/08 and C-448/08);
  • Article 49 EC must be interpreted as precluding legislation of a Member State from subjecting gambling to a system of exclusive rights, according to which the promotion of gambling organised in another member state is subject to stricter penalties than the promotion of gambling operated on national territory without a licence. It is for the referring court to ascertain whether that is true of the national legislation at issue in the main actions (para. 57 of the ruling in joined cases C-447/08 and C-448/08 )

Sigrid Ligné, Secretary General of the European Gaming and Betting Association (EGBA), said: “We welcome the unequivocal confirmation that member states cannot discriminate against EU gaming operators. The Swedish advertising restrictions also affect leading national media that are very dependent on advertising sales and which are unfairly deprived of substantial sources of revenue.”

She added, “The Court will not resolve the challenges that are raised by the Internet. It is up to the legislator to embrace the reality of online gaming and betting in Europe. Italy, France and the UK have introduced online gaming legislation and Denmark is set to follow suit in 2011. We are confident that the Swedish and other governments will do likewise. Proper regulation can bring about greater consumer protection, more competition and benefit other sectors such as sports and the media”.

Ligné concluded: “As more member states are regulating the market, it will be crucial to avoid the emergence of a patchwork of legislation in the EU. We fully support the Green Paper process, whereby the European Commission is going to start enquiring into the cross-border issues of gaming. We call upon the Commission to ensure that the full potential of the Internet is used to create consistent customer protection and fraud control throughout the EU.”

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
TAGS: court | compliance | European Commission | commerce | law | internet | e-commerce | gambling | legislation | Sweden | regulation | penalties | European Union (EU) | Europe

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