Joined Cases C‑186/11 and C‑209/11, Stanleybet et al.

Court questioning legality Opap’s Greek Gambling Monopoly, for national Court to determine whether aimed at restricting supply of games of chance or combating criminality linked to games of chance

>> Stanleybet, William Hill and Sportingbet were companies with their registered office in the United Kingdom, where they held bookmakers’ licences.

In Greece, under Law No 2433/1996 and Law No 2843/2000, and under a contract concluded by OPAP and the Greek State in 2000, the exclusive right to run, organise and operate games of chance and betting forms with fixed or variable winnings was granted to OPAP for a period of 20 years ending in 2020.

OPAP, which started trading as a public corporation wholly owned by the Greek State, was converted into a public limited company in 1999 and listed on the Athens Stock Exchange in 2001, with the State retaining 51% of OPAP’s shares at the time of the stock exchange listing.

In 2005, the State decided to become minority shareholder and reduce its holdings to 34% of the shares in OPAP. The Greek State continued to supervise OPAP, however, especially by approving the regulations governing its activities and by monitoring the procedure applied in order to organise the games. In the view of the majority of the members of the national court, however, OPAP was supervised only superficially by the State.

OPAP had expanded its activities in Greece and abroad. Thus, as at 31 March 2005, OPAP had already established 206 agencies in Cyprus, pursuant to an agreement between Greece and Cyprus. In order to develop its activities in Cyprus, OPAP incorporated the company OPAP Kiprou Ltd. in 2003 and the company OPAP International Ltd. in 2004.

OPAP fixed the maximum amount of the bet and winnings per form and not by player. It enjoyed preferential conditions for the advertising of the games of chance it organised because it might use up to 10% of the advertising space in State and municipal stadia and gymnasia free of charge.

Stanleybet sought annulment of the Greek authorities’ tacit rejection of its application to be granted permission to provide sport betting services in Greece. Two other actions with a similar subject-matter were brought before the national court, by William Hill and by Sportingbet, the latter having also sought permission to organise games of chance already existing on the Greek market. OPAP was granted leave to intervene in those proceedings.

The national court asked in essence whether Articles 43 EC and 49 EC must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which granted the exclusive right to run, manage, organise and operate games of chance to a single entity inasmuch as, whilst the objective of the national legislation was either to restrict the supply of games of chance or to support the effort to combat criminality linked to games of chance, the undertaking on which the right had been conferred pursued a commercial policy of expansion.

The Court first of all stressed that it was common ground that a Member State’s legislation, such as that described by the national court, constituted a restriction on the freedom to provide services guaranteed by Article 49 EC or on the freedom of establishment guaranteed by Article 43 EC inasmuch as it provided for a monopoly for OPAP and prohibited providers such as Stanleybet, William Hill and Sportingbet, established in another Member State, from offering games of chance on Greek territory (see e.g. Joined Cases C-316/07, C-358/07 to C-360/07, C-409/07 and C-410/07 Stoß and Others [2010])

The Court held that it was necessary, however, to determine whether such a restriction might be allowed as a derogation, on grounds of public policy, public security or public health, as expressly provided for under Articles 45 EC and 46 EC, which were applicable in the area of freedom to provide services by virtue of Article 55 EC, or justified, in accordance with the case-law of the Court, by overriding reasons in the public interest (see e.g. Case C-470/11 Garkalns [2012]).

The Court had consistently held that restrictions on betting and gaming might be justified by overriding requirements in the public interest, such as consumer protection and the prevention of both fraud and incitement to squander money on gambling. The Court reiterated that legislation on games of chance was one of the areas in which there were significant moral, religious and cultural differences between the Member States. In the absence of Community harmonisation in the field, it was for each Member State to determine in those areas, in accordance with its own scale of values, what was required in order to ensure that the interests in question were protected (Case C-42/07, Liga Portuguesa de Futebol Profissional and Bwin International [2009]).

The Court held that a Member State seeking to ensure a particularly high level of protection might be entitled to take the view that it was only by granting exclusive rights to a single entity which was subject to strict control by the public authorities that it could tackle the risks connected with the betting and gaming sector and pursue the objective of preventing incitement to squander money on gambling and combating addiction to gambling with sufficient effectiveness (see Case C-212/08 Zeturf [2011]).

The Court held that it provided that they complied with the requirement of proportionality, the national public authorities might indeed legitimately consider that the fact that, in their capacity as overseer of the body holding the monopoly, they would have additional means of influencing the latter’s conduct outside the statutory regulating and monitoring mechanisms was likely to secure for them a better command over the supply of games of chance and better guarantees that implementation of their policy would be effective than in the case where those activities are carried on by private operators in a situation of competition, even if the latter are subject to a system of authorisation and a regime of supervision and penalties

As regards the first objective, that of restricting the supply of games of chance it was for the national courts to ensure, in the light, in particular, of the actual rules for applying the restrictive legislation concerned, that that legislation genuinely met the concern to reduce opportunities for gambling and to limit activities in that domain in a consistent and systematic manner

The national court might legitimately take account of the various features of the legislative framework governing OPAP and the manner in which it operated in practice, as outlined in the order for reference, such as the fact that OPAP enjoyed certain rights and privileges for advertising the games of chance it organises, or the fact that the maximum bet was fixed per form and not per player. It is for that court, however, to determine whether those features, as well as any other relevant aspects, were such as to lead to the conclusion that the legislation at issue in the main proceedings did not satisfy the requirements referred to in the preceding paragraph.

As regards the second objective, that of combating criminality linked to games of chance, it was also for the national court to determine, in the light of, inter alia, the development of the national market for games of chance, whether the State controls to which the activities of the undertaking holding the monopoly were subject were actually implemented in the consistent and systematic pursuit of the objectives sought by the establishment of the system whereby exclusive rights were conferred on such an undertaking.

It should be borne in mind in that regard that the effectiveness of those State controls must be assessed by the national court in the light of the fact that a measure as restrictive as a monopoly must, inter alia, be subject to strict control by the public authorities.

Although some of the aspects highlighted in the order for reference, including in particular the fact that OPAP was a listed public limited company and the finding that the Greek State’s supervision of OPAP was merely superficial, tend to suggest that the requirements referred to above might not be satisfied, it is nevertheless for the national court to determine whether that was the case by taking into account those aspects and also any others which might turn out to be relevant in that perspective.