EUROPEAN STATE LOTTERIES AND TOTO ASSOCIATION
EFTA court upholds Norwegian gambling monopoly –
“State monopoly better at fighting gambling addiction than commercial operator”
14 March 2007 – The Court of the European Free Trade Association (EFTA) today upheld Norway’s monopoly for gaming machines, stating that the Norwegian government has demonstrated that a state-owned monopoly operator will tend to accommodate legitimate concerns of fighting gambling addiction better than a commercial operator (see paragraphs 51 and 52 of the judgment; below).
Dr Winfried Wortmann, President of the European State Lotteries and Toto Association (European Lotteries, EL), welcomed the ruling: “This is the second defeat for the supporters of a commercialisaton of gambling before a European Court in a week. Last week the European Court of Justice (ECJ) reiterated its standing jurisprudence, according to which Member States are free to define their gambling policy objectives and to determine in detail the level of protection, as long as they pursue public interest objectives, such as fighting gambling addiction, in a systematic and consistent manner. Moreover - ,whatever the claims of the private sector in the pages of the press - , the ECJ’s ruling last week implicitly endorsed gambling monopolies. The EFTA court today brought even more clarity by expressedly stating that fighting gambling addiction can be best done by state-owned monopoly operators.”
The EFTA Court today dismissed an action by the EFTA Surveillance Authority – the EFTA counterpart to the European Commission -, which had argued that the introduction of the monopoly for gaming machines imposed unjustified restrictions on EU and EFTA based companies’ rights of establishment and of provision of services.
The EFTA court parallels the work of the EU’s European Court of Justice with regard to the legal obligations of EFTA member countries Norway, Iceland and Liechtenstein in the European Economic Area (EEA). All 27 EU countries and all EFTA countries (except Switzerland) are members of the EEA. The EEA agreement knows the same “market freedoms” (freedom of provision of services and of establishment) as the EC-Treaty that binds EU countries.
European Lotteries is the association of the European state lotteries and toto companies and represents 74 organisations across Europe.
Notes to the editors
EFTA Court case E-1/06 – National legislation transferring the operation of gaming machines to a State-owned monopoly – restriction of freedom of establishment and freedom to provide services – justification – legitimate aims – consistency of national legislation – necessity of national legislation)
Extracts from the judgment:
§ 51 The public interest objectives which the national legislation is aimed at must be considered as a whole. In the Court’s view, it is reasonable to assume that a monopoly operator in the field of gaming machines subject to effective control by the competent public authorities will tend to accommodate legitimate concerns of fighting gambling addiction better than a commercial operator or organisations whose humanitarian or socially beneficial activities partly rely on revenues from gaming machines. Furthermore, it is plausible to assume that in principle the State can more easily control and direct a wholly State-owned operator than private operators. Through its ownership role, the State has additional ways of influencing the behaviour of the operator besides public law regulations and surveillance. In fact, the effectiveness of public control and enforcement of a genuinely restrictive approach to machine gaming are the focal point of the proportionality assessment in this case. In a situation where the reform of the gaming machine regulation in Norway has not yet taken effect, the Court cannot base itself on the general assumption that public control and policy enforcement will not satisfy these requirements.
§ 52 The Court concludes that the Defendant has sufficiently demonstrated that the exclusive right system opted for in the contested legislation is likely to be more effective in order to achieve the objectives of the legislation, considered as a whole, than the other means proposed by the Applicant.