The ruling has been welcomed by gaming operators as a sign that
European markets are opening up.
Under Italian legislation, the organising of games of chance or
the collecting of bets requires a licence and police authorisation.
Rogue operators face criminal penalties of up to three years’
imprisonment.
In 1999, following calls for tenders, Italian authorities
awarded 1,000 licences for sports betting. The calls for tender
excluded operators whose company shares were quoted on the
regulated markets.
One such company was Stanley International Betting, a subsidiary
of Stanley Leisure plc, which at that time was the fourth biggest
bookmaker and the largest casino operator in the UK. Stanley
operates in Italy through ‘data transmission centres’ (DTCs) run by
independent operators with contractual links to Stanley, who place
a data transmission link at the disposal of bettors so that they
can access Stanley’s UK server.
Mr Placanica, Mr Palazzese and Mr Sorricchio are DTC operators
linked to Stanley. In 2004 these intermediaries appeared in Italian
courts on charges of collecting bets without police authorisation.
The Italian courts asked the ECJ whether the national
legislation on betting and gaming is compatible with the Community
principles of freedom of establishment and the freedom to provide
services.
Italy said its licensing requirement prevents the exploitation
of betting and gaming activities for criminal purposes. But the ECJ
said the blanket exclusion of companies from tender procedures for
the award of licences goes beyond what is necessary to achieve that
objective. There are other ways of monitoring the accounts and
activities of operators which impinge to a lesser extent on the
freedom of establishment and the freedom to provide services, it
said, such as gathering information on their representatives or
their main shareholders. It added that the lack of a licence cannot
be a ground for the application of sanctions to such operators.
It added that the lack of police authorisation cannot be a valid
ground for complaint in respect of those who have been unable to
obtain them because, contrary to Community law, they were barred
from any possibility of being granted a licence.
The ECJ acknowledged that criminal legislation is a matter for
which the Member States are responsible. But it pointed out that
criminal legislation may not restrict the fundamental freedoms
guaranteed by Community law.
The 11-judge panel ruled that: "a Member State may not apply a
criminal penalty for failure to complete an administrative
formality where such completion has been refused or rendered
impossible by the Member State concerned, in infringement of
Community law".
In consequence, Italy cannot apply criminal penalties to persons
such as the defendants in the main proceedings for pursuing the
organised activity of collecting bets without a licence or a police
authorisation, it said.
Adrian Morris, deputy director-general of Stanley, described the
ruling as a "landmark".
"We think its time that the Commission and national lawmakers
act now to end this protectionism," he told the Bloomberg news
service.
