In a significant blow to Stanleybet, the Court of Justice of the European Union (ECJ) has ruled against the international bookmaker in its long-running case against Italy authorities over the length of gambling licences issued by the country in 2012.
Stanleybet has long argued that Italy persistently breached EU laws concerning gambling and disregarded numerous ECJ rulings in the past fifteen years.
The landmark Gambelli and Placanica rulings recognised that the 1999 CONI and 2006 Bersani Italian sports betting licence tenders were not compliant with EU law, while the most recent Costa-Cifone ruling of February 2012 found that the Italian authorities needed to remedy the unlawful exclusion of operators such as Stanleybet who were discriminated against in the tender.
In order to ensure its compliance with EU law, Italy reformed the gambling and betting sector in 2006, and subsequently in 2012 following the most recent judgement by the ECJ. This saw the Customs and State Monopolies Authority (Agenzia delle Dogane e dei Monopoli di Stato) hold a tendering procedure for the allocation of 2,000 new licences.
Stanleybet International Betting and its Maltese subsidiary Stanleybet Malta, which has been operating in Italy for approximately fifteen years without a licence through Data Transmission Centres, said that they had been excluded from the previous calls for tenders organised in 1999 and 2006, and requested the annulment of the 2012 call for tenders and the organisation of a new call for tenders.
They complained that the period of validity of the new licences (40 months) was significantly lower than that of previous licences (between nine and twelve years), and criticised the exclusive nature of the marketing of the gambling products and the prohibition on the transfer of licences.
The issue was appealed to the Italian Council of State, with the court asking the ECJ whether EU law precludes national legislation which, because of a reorganisation of the system seeking an alignment of licence expiry dates, provides for the organisation of a call for tenders for licences whose period of validity will be shorter than that of previous licences.
In its judgment released Thursday, the ECJ stated that both the revocation and redistribution of previous licences and the award by public tender of an adequate number of new licences could be appropriate courses of action in order to remedy the unlawful exclusion of certain operators.
“In the non-harmonised area of betting and gambling, national authorities may, as a result of the discretion they enjoy, choose between those approaches,” the court said.
Noting that existing licensees enjoyed an unfair competitive advantage in that they were able to commence their activities years before the operators which were unlawfully excluded, the ECJ said that those existing licensees did not have ‘even greater’ competitive advantages since the provisions at issue also applied to them.
“In addition, the Stanley companies cannot be truly described as ‘new entrants on the market’ since, even without licence or authorisation; they have been operating in Italy for approximately fifteen years,” said the court. “Moreover, even if the new licences have a shorter period of validity, they are less onerous and less economically restrictive.”
The ECJ therefore concluded that the Italian legislation was consistent with the principles of equal treatment and effectiveness.
It also recalled that restrictions on gambling and betting activities may be justified by overriding reasons in the public interest, such as consumer protection and the prevention of fraud and incitement to squander money on gambling, as well as the objective of combating criminality.
“Betting and gambling are otherwise part of the areas in which there are significant moral, religious and cultural differences between the Member States,” said the court. “In the absence of harmonisation at EU level, each Member State may, in accordance with its own scale of values, identify the objectives pursued and determine what is required in order to ensure that the interests in question are protected.”
The ECJ found that, in this particular context, the reorganisation of the licensing system through the alignment of licence expiry dates may contribute to a coherent pursuit of the legitimate objectives of reducing gambling opportunities, or of combating criminality linked to betting and gambling and did not go beyond what is necessary in order to achieve those objectives.
“If, in future, the Italian national authorities wanted to reduce the number of licences granted or to exercise stricter control over activities in the field of betting and gambling, such measures would be facilitated in the event that all the licences were granted for the same duration and expired at the same time,” the court ruled.
Consequently, the ECJ declared that EU law does not preclude Italy from organising, in order to align the expiry dates of the various licences, a fresh call for tenders for the award of licences whose period of validity is shorter than that of licences awarded previously.