No Joker for Poker

In order to prevent the operation of games of chance via the internet for fraudulent or criminal purposes, Portuguese legislation confers on the Santa Casa da Misericórdia de Lisboa, a centuries-old non-profit-making organisation operating under the strict control of the Portuguese Government, the exclusive right to organise and operate lotteries, lotto games and sporting bets via the internet.

Bwin, a private on-line gaming undertaking established in Gibraltar, and the Liga Portuguesa de Futebol Profissional were fined EUR 74 500 and EUR 75 000 respectively for offering games of chance via the internet and for advertising those games. The Tribunal de Pequena Instância Criminal do Porto (Local Criminal Court, Oporto), before which Bwin and the Liga challenged those fines, questions whether the Portuguese legislation is compatible with freedom of establishment, the free movement of capital and the free movement of services.
First of all, the Court of Justice takes the view that freedom of establishment and the free movement of capital do not apply to the dispute in question. In those circumstances, the Court examines whether the freedom to provide services precludes the Portuguese legislation in so far as the latter prohibits operators such as Bwin, established in other Member States where they lawfully provide similar services, from offering games of chance via the internet in Portugal. In the context of that analysis, the Court finds, first, that the Portuguese legislation constitutes a restriction on the freedom to provide services. The Court points out, however, that restrictions on the freedom to provide services may be justified by overriding reasons relating to the public interest. In the absence of Community harmonisation in the area of games of chance, Member States are free to set the objectives of their policy in that area and, where appropriate, to define in detail the level of protection sought. However, the Court notes that the restrictive measures that Member States may impose must satisfy certain conditions: they must be suitable for achieving the objective or objectives invoked by the Member State concerned, and they must not go beyond what is necessary in order to achieve those objectives. Lastly, in any event, those restrictions must be applied without discrimination.
As regards the justification for the Portuguese legislation, the Court recalls that the objective of the fight against crime relied on by Portugal may constitute an overriding reason relating to the public interest that is capable of justifying restrictions in respect of operators authorised to offer services in the sector concerning games of chance. Games of chance involve a high risk of criminal activity or fraud, in view of the scale of the earnings and the potential winnings on offer to players.
In addition, because of the lack of direct contact between consumer and operator, the Court considers that games of chance accessible via the internet involve different and more substantial risks of fraud compared with the traditional markets for such games. The Court also considers it possible that an operator which sponsors some of the sporting competitions on which it accepts bets and some of the teams taking part in those competitions may be in a position to influence the outcome directly or indirectly and thus increase its profits.
Accordingly, in the light of the specific features associated with the offering of games of chance via the internet, the Court takes the view that the prohibition imposed on operators such as Bwin of offering games of chance via the internet may be regarded as justified by the objective of combating fraud and crime and may therefore be compatible with the principle of the freedom to provide services.

(Source: Press Release No 70/09 European Court of Justice - Judgment of the Court of Justice in Case C-42/07 of 8 September 2009)