Friday, 15 November 2013

Taking a chance on a game of chance - AG Sharpston in Pfleger (C-390/12)

14 November 2013: AG Sharpston in Pfleger (C-390/12)

Another opinion issued yesterday and related to consumer protection concerned authorisation of gaming machines in Austria. Currently, only a limited number of licence holders may organise games of chance in Austria, and other operators who are prohibited from offering such services may object against it by claiming unjustified restriction on the freedom to provide services as guaranteed by art. 56 TFEU. (Par. 51) By the way, questioning the national policy under art. 56 TFEU seems more reasonable than what parties in these proceedings have done - operating gaming machines without a licence, getting caught, being held criminally liable for it, and then trying to get out of it under the TFEU provisions.

The CJEU considered earlier that certain justifications are allowed to restrict provisions of gambling services, e.g., consumer protection (incl. protecting players from gambling addiction) and crime prevention, as long as they are proportionate, while some other reasons don't suffice, e.g., increasing tax revenue. The Austrian court will need to determine what the objective was in the given case and to adjudicate accordingly. (Par. 54-55) In general, however, the AG Sharpston reminds the national court that a limitation of number of licence holders automatically limits opportunities for gambling, and therefore seems proportionate to achieve the objectives of consumer protection and crime prevention.(Par. 57) There are, however, many factors that only a national court may take into account in trying to establish Austrian authorities' objective, like, scope of a gambling problem in Austria, intensity of controls applied to licensed establishments etc. At the same time, it may be an argument against Austrian government's claim that they pursue consumer protection, the fact that license holders are currently engaging in aggressive advertising campaigns to promote positive image of games of chance and encourage active participation.

"While the Court has recognised that moderate advertising may be consistent with a policy to protect consumers, that is only where the advertising is strictly limited to what is necessary to channel consumers towards controlled gaming networks. Advertising that encourages gambling by trivialising it, giving it a positive image or increasing its attractiveness aims to expand the overall market for gaming activities rather than channelling the existing market to certain providers. Such an expansionist commercial policy is plainly inconsistent with an aim of achieving a high level of protection for consumers. As the Court stated in Dickinger and Ömer: ‘A Member State is not … entitled to rely on reasons of public policy related to the need to reduce opportunities for gambling in so far as the public authorities of that State incite and encourage consumers to participate in games of chance so that the public purse can benefit’." (Par. 60)

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