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What do the pools have to do with the internal market? (services)

The so-called Gambelli judgment of 2003 focused the Commission’s attention on the national gaming monopolies of the various EU countries. The Commission is thus in the process of investigating whether the legislation of a number of countries on national gaming monopolies is in conflict with the EU’s rules on freedom of movement for services and freedom of establishment.

The Gambelli judgment
The case was concerned with the fact that Gambelli, an Italian bookmaker, along with several others, supplied gaming services for an English bookmaker via the internet. The Italian State had a gaming monopoly and prosecuted Gambelli and others for the provision of unauthorised betting services. Gambelli, however, maintained before the Italian court that the Italian rules were in conflict with the principles of EU law on freedom to exchange services and freedom of establishment, following which the Italian court applied to the EC Court of Justice for a preliminary ruling on how the provisions of the EC Treaty should be interpreted in this respect .

The EC Court of Justice concluded that the gaming monopoly of the Italian State was in conflict with the EU rules on freedom of establishment, freedom to exchange services and the right to receive or draw benefit from services. The Court then left it to the Italian court to assess whether the restrictions were justified, since their purpose was to protect consumers and society and were not disproportionate, at the same time giving an indication of the framework which was to be used in such an assessment.

According to the Court’s judgment, restrictions could be justified if they were necessary to protect consumers and society. In assessing them account must be taken of moral, religious and cultural aspects and of the morally and economically damaging consequences for the individual and society (e.g. compulsive gambling, gambling addiction). In addition, the main purpose of the restrictions must be an overriding public interest, for example to reduce gaming facilities. The restrictions must not exceed what is necessary to provide for the overriding public interest and must be applied without discrimination. To generate income for the State treasury was not an acceptable object.

The Court stressed that, if a Member State provided encouragement to participate in lotteries, games of chance or betting in order to raise revenue from them, the State in question could not rely on the maintenance of public order as a ground for restrictions.