European Parliament 2014-2019 Committee on Petitions 31.05.2017 NOTICE TO MEMBERS Subject: Petition 0625/2004 by Håkan Krantz (Swedish) on the Swedish lottery law and its compliance with the principles of Community law concerning freedom of establishment and freedom to provide services 1. Summary of petition The petitioner refers to the fact that gambling and lotteries in Sweden are the preserve of the State or state franchisees. Any infringement of the lottery law may result in a sentence of between six months and two years in prison. The petitioner, who had to discontinue his business activities to avoid being charged with facilitating and contracting unauthorised betting, points out with reference to the judgment of the Court of Justice in case C-243/01 that the Swedish law is contrary to the principles of Community law concerning freedom of establishment and freedom to provide services. He therefore calls on the European Parliament to intervene and ensure that Swedish law is brought into line with EU legislation. 2. Admissibility Declared admissible on 7 February 2005. Information requested from the Commission under Rule 216(6). 3. Commission reply, received on 12 July 2005. The Commission is aware of restrictions imposed by the Swedish Lottery Act (1994:1000) on free movement of goods and services and freedom of establishment (Articles 28, 43 and 49 of the EC Treaty) and has received several complaints relating to such restrictions which are currently pending before the Commission. The petitioner makes references to a ruling by the Court of Justice (case C-243/01) which clearly rejected the need for ensuring the fiscal balance as an overriding reason of general interest. The Court ruled that restrictions to freedom of establishment and freedom to provide services may be justified, if they are necessary for reasons relating to consumer protection and CM\1127280.docx PE362.442v15-00 United in diversity
for preservation of the social order, but such restrictions must not go beyond what is necessary to attain that objective and must be applied in a non-discriminatory manner. The Commission, in its handling of the pending infringement cases relating to the Swedish legal provisions challenged by the petitioner, will proceed with appropriate action in order to ensure that the principles established by the above mentioned ruling, and other relevant caselaw of the Court of Justice, are respected. This concerns also the assessment of proportionality of any measures restricting the provision of gambling services. 4. Further Commission's reply, received on 24 May 2006 I. The Commission s comments to the petition s arguments a) State of play The European Parliament has in view of the Commission's latest statements in the Committee on Petitions (11 October 2005) asked for more precise and concrete information relating to the handling of this complaint. The Commission has - as mentioned at the October 11 th meeting of the Committee on Petitions - received several complaints, in addition to the complaint by the petitioner, claiming that Articles 38 and 54 of the Swedish Lottery Act restrict free movement of services (various services which fall under article 49 of the EC Treaty). The complaints are not limited to the provision of gambling services but also relate to the promotion of participation in lotteries arranged outside the country which is illegal under Swedish law. The provision of certain payment or financial services, such as those offered by the petitioner, is considered by the Swedish authorities to constitute such a promotion of participation in a foreign lottery. The Commission has therefore decided to look at all complaints relating to the provision and promotion of sport betting services under one procedure. The Commission informed the petitioner of this in an e-mail dated 26 September 2005 (see annex). b) The Commission's statement in the EP on 11 October 2005 The Commission received an e-mail from the petitioner on 8 September 2005 in which he stressed that neither his complaint nor his petition relates to gambling services but to financial services offered by banks, card companies and other payment service providers. The petitioner also refers to a number of administrative decisions made by Swedish authorities relating to his unemployment benefits and to his social insurance. Finally, the Petitioner makes reference to a letter dated 5 September 2005, which has been sent to the Commission and the European Parliament. c) The Commission would at this stage like to make five observations: 1. The petitioner s complaint to the Commission is registered as a formal complaint. The Commission is fully aware that the petitioner does not wish to provide or offer gambling services but financial services. In view of the petitioner s e-mail the PE362.442v15-00 2/10 CM\1127280.docx
Commission would like to stress that the subject of the Commission s investigation is not the service offered by an individual person (in this case the petitioner) - but more generally the legal national provisions restricting this and other services. 2. The restriction relevant for the petitioner s complaint and to which he refers in his complaint to the Commission - is found in Articles 38 and 54 of the Swedish Lottery Act. The Commission has received several complaints claiming that these two provisions restrict free movement of services under article 49 of the EC Treaty and will treat all these complaints together. The Commission informed the petitioner about this in a e-mail dated 26 September 2005 3. Should the Commission decide to open an infringement procedure against Sweden, it must be noted that any possible finding of an infringement by the Court of Justice at the end of the infringement proceedings does not necessarily have a direct and specific impact on the rights of the complainant, since it does not serve to resolve individual cases. It merely obliges Sweden to comply with Community law. More specifically, the petitioner indicates that he has suffered economic damages - any individual claims for damages would have to be brought by the petitioner before the national courts. 4. The petitioner asked the Commission to merge his infringement procedure with the European Parliament s petition procedure. The Commission informed the petitioner in an e-mail dated 26 September that these procedures cannot be merged as they serve different purposes. While the purpose of the Commission s infringement procedure seeks to ensure that Member States comply with Community law (if necessary by taking the Member State to the European Court of Justice) a petition constitutes an appeal to the European Parliament to adopt a position on a specific matter. Thus, petitions give the European Parliament the opportunity of calling attention to any infringement of a citizen's rights by a Member State or an European institution. In this case, the European Parliament will follow and scrutinize the work of the Commission. The administrative decisions made by Swedish authorities relating to the petitioner s unemployment benefits and to his social insurance are not the subject of the Commission s investigation. 5. Further Commission's reply, received on 29 November 2007 The Commission decided to open infringement proceedings against Sweden in April 2006. The proceedings against Sweden include the restrictions referred to by the complainant. The Commission received a reply from the Swedish Authorities in July 2006. This reply was assessed in the light of the jurisprudence of the European Court of Justice, and the Commission focused, in particular, its assessment on whether or not the relevant restrictions can be justified by or are necessary or proportionate to overriding reasons of general interest (such as protection of consumers, public health reasons or prevention of illegal actions and crime). In June 2007, The Commission formally requested Sweden to amend its laws following consideration of its reply to the letter of formal notice. This formal request took the form of a CM\1127280.docx 3/10 PE362.442v15-00
"reasoned opinion", the second stage of the infringement procedure laid down in Article 226 of the EC Treaty. The Swedish Government replied to the "reasoned opinion" in August 2007 and its reply is now being assessed by the Commission. 6. Further Commission's reply, received on 25 November 2008 The Commission opened infringement proceedings against Sweden in April 2006. The infringement relates to the provision and promotion (facilitation) of sports betting services. The proceedings against Sweden include the restrictions referred to by the petitioner (and complainant). The Commission received a reply from the Swedish Authorities in July 2006. This reply was assessed in the light of the jurisprudence of the European Court of Justice, and the Commission focused, in particular, its assessment on whether or not the relevant restrictions can be justified by or are necessary or proportionate to overriding reason(s) of general interest (such as protection of consumers, public health reasons or prevention of illegal actions and crime). In June 2007, the Commission formally requested Sweden to amend its laws following consideration of its reply to the letter of formal notice. This formal request took the form of a "reasoned opinion", the second stage of the infringement procedure laid down in Article 226 of the EC Treaty. The Swedish Government replied to the "reasoned opinion" in August 2007. While the Commission in May 2008 decided to launch another procedure against Sweden concerning restrictions on the provision and promotion of poker games and tournaments (online and offline) it also decided (June 2008) to close another infringement case that concerned gambling machines (linked to petition 446/2004). As regards the infringement proceedings that relate to the provision and promotion (facilitation) of sports betting services in Sweden the Commission is currently investigating this case and other similar ones. 7. Further Commission's reply, received on 8 October 2010 The Commission opened infringement proceedings against Sweden in April 2006. The infringement relates to the provision and promotion (facilitation) of sports betting services. The proceedings against Sweden include the restrictions referred to by the petitioner (and complainant). The Commission received a reply from the Swedish Authorities in July 2006. This reply was assessed in the light of the jurisprudence of the European Court of Justice, and the Commission focused, in particular, its assessment on whether or not the relevant restrictions can be justified by or are necessary or proportionate to overriding reason(s) of general interest (such as protection of consumers, public health reasons or prevention of illegal actions and PE362.442v15-00 4/10 CM\1127280.docx
crime). In June 2007, the Commission formally requested Sweden to amend its laws following consideration of its reply to the letter of formal notice. This formal request took the form of a "reasoned opinion", the second stage of the infringement procedure laid down in Article 226 of the EC Treaty (currently Art.258 TFEU). The Swedish Government replied to the "reasoned opinion" in August 2007. While the Commission in May 2008 decided to launch another procedure against Sweden concerning restrictions on the provision and promotion of poker games and tournaments (online and offline) it also decided (June 2008) to close another infringement case that concerned gambling machines (linked to petition 446/2004). As regards the infringement proceedings that relate to the provision and promotion (facilitation) of sports betting services in Sweden, the Commission is currently investigating this case and other similar ones. The Court of Appeal in Stockholm sent a reference for a preliminary ruling to the Court of Justice of the European Union in October 2008 in a case that concerns the Swedish authorities' possibility to restrict promotion of gambling services offered by licensed operators established in other Member States. (Joint cases C-447/08 and C-448/08: Criminal proceedings against Otto Sjöberg and Anders Gerdin). These cases are of direct relevance for the Commission's infringement proceedings against Sweden. In its ruling of 8 July 2010, the Court gives guidance on how EU law should be interpreted but points out that, in the context of these proceedings, the interpretation of provisions of national law is a matter for the courts of the Member States, not for the Court of Justice. More rulings of the Court are expected in the field of sports betting services, which may provide further guidelines. The Commission will also follow the Swedish national proceedings in the two above-mentioned cases very closely. The Commission intends to launch a wide consultation related to online gambling. This consultation will cover horizontal issues as well as more specific issues relating to public interest objectives (why certain Member States believe that they have to restrict or prohibit the cross-border supply of gambling services and associated services). 8. Further Commission's reply, received on 30 September 2011 (REV V) The Commission would like to inform the Petitions committee of the following developments. On 8 July 2010, the Court of Justice ruled on a reference for a preliminary ruling, submitted by Svea Court of Appeal in Stockholm in October 2008, and gave guidance on how EU law should be interpreted in a case that concerns the Swedish authorities' possibility to restrict promotion of gambling services offered by licensed operators established in other Member States (joint cases C-447/08 and C-448/08: Criminal proceedings against Otto Sjöberg and Anders Gerdin). These cases are of direct relevance for the Commission's infringement CM\1127280.docx 5/10 PE362.442v15-00
proceedings against Sweden. However, the Court also pointed out that, in the context of these proceedings, the interpretation of provisions of national law is a matter for the courts of the Member States, not for the Court of Justice. On the basis of the Court's findings, on 23 June 2011 the Svea Court of Appeal found the current Swedish criminal sections on promotion of gambling services offered by foreign operators to be discriminatory. It is likely that the judgment will be appealed to the Swedish Supreme Court. The Commission follows the Swedish national proceedings very closely and will thoroughly assess the impact of the final outcome of the proceedings on the ongoing infringement cases and the petition. On 24 March 2011 the Commission also launched a wide consultation relating to online gambling in the form of a Green paper. This consultation covers horizontal issues as well as more specific issues relating to public interest objectives in the context of gambling (why certain Member States believe that they have to restrict or prohibit the cross-border supply of gambling services and associated services). The information received through the consultation will facilitate the assessment of the compliance of national gambling rules with EU Law for the Commission as well as for Member States 9. Further Commission's reply, received on 30 August 2012 (REV VI) In 2008, the infringement proceedings launched by the Commission in relation to Article 56 TFEU and the provision and promotion of gambling services concerned 11 Member States. Further to the dialogue established with the Member States concerned and to the legislation subsequently adopted, a number of infringement proceedings have been closed. Cases against 9 Member States are currently under investigation. The Commission maintains a dialogue with a number of these Member States in light of the legislative changes they are undertaking or envisaging to undertake, with a view to ensuring these changes are consistent with EU law. The investigations also led to debates on gambling in Council and in Parliament, culminating in calls on the Commission inter alia to explore alternatives to these proceedings. In response, the Commission adopted in 2011 the Green paper on on-line gambling in the Internal Market. The Commission will use the facts and the in-depth information gathered in the context of the Green paper consultation for its on-going assessment of national legislation in pending infringement cases, including that against Sweden. The upcoming Communication on on-line gambling in the Internal Market - adoption foreseen for autumn 2012 - will follow-up on the public consultation and propose an action plan to set up a comprehensive EU framework on online gambling. The Communication will also address the issue of compatibility of national gambling rules with the Treaty. As appropriate, the Commission should then follow-up by resuming or taking action against national rules clearly not in line with current EU law. 10. Further Commission's reply, received on 30 January 2013 (REV VII) The infringement opened against Sweden in April 2006 relates to the provision and promotion (facilitation) of sports betting services. The proceedings against Sweden include the restrictions referred to by the petitioner (and complainant). In addition to its previous response, the Commission would like to inform the European Parliament of the following PE362.442v15-00 6/10 CM\1127280.docx
developments: On 23 October 2012, the European Commission adopted the Communication Towards a comprehensive European framework on online gambling. Based on an in-depth public consultation, this Communication sets out an action plan which is seeking to enhance clarity throughout the EU for the benefit of national authorities, operators, consumers and related industry such as payment service or media service providers. Five action areas are prioritised to address the challenges faced at EU and national level: compliance of national regulatory frameworks with EU law enhancing administrative cooperation and efficient enforcement protecting consumers and citizens, minors and vulnerable groups preventing fraud and money laundering safeguarding the integrity of sports and preventing match-fixing Simultaneously with the adoption of this Communication, the Commission invited the Member States concerned to provide information about the latest developments of their gambling legislation. The Member States against whom infringement cases are open or complaints have been registered have been asked to provide legal and factual (updated) information to enable the Commission to complete its assessment of compatibility with EU law. On the basis of the responses the Commission will accelerate completion of its assessment of national provisions in the pending infringements cases and complaints and take enforcement action wherever necessary, taking into account the latest case-law of the CJEU. 11. Further Commission's reply, received on 31 January 2014 (REV VIII). The Commission opened infringement proceedings on the Swedish Lottery Law in April 2006. The infringement relates to the provision and promotion (facilitation) of sports betting services. The proceedings against Sweden include the restrictions referred to by the petitioner (and complainant). In addition to its previous response, the Commission services would like to inform the European Parliament of the following developments: In its Communication Towards a comprehensive European framework on online gambling, adopted on 23 October 2012, the Commission announced that it would accelerate the completion of its assessment of national provisions in the pending infringement cases and complaints and take enforcement action wherever necessary. After consultation of the Member States concerned, decisions on a first series of pending cases have been taken on 20 November 2013. With regard to Sweden, the Commission has in two separate proceedings requested the Swedish government to ensure compliance of its national rules establishing exclusive rights for the provision of online betting services and for the provision of online poker services with EU law. In previous requests, the Commission had sought to verify whether the restrictions in question are compatible with Article 56 TFEU, which guarantees the free movement of services. The Commission found that the restrictive policy in the area of gambling services is not applied in a systematic and consistent manner, and that the holder of the exclusive right is not subject to strict state control. The Commission enquiries cover the cross-border provision of online sports betting and poker services, but also deal with issues such as advertising and sponsorship. The Commission requests Sweden, in the form of an additional reasoned opinion CM\1127280.docx 7/10 PE362.442v15-00
on online betting and a reasoned opinion on online poker services, to take action to fully comply with EU rules. Concerning restrictions to the provision of online betting services, the Commission had already issued a reasoned opinion in 2007. However, in view of the time that had elapsed, the developments that took place both in Sweden and in the case-law of the Court of Justice of the European Union in the area of gambling services in the intervening period, the Commission has deemed it useful to clarify the basis for its argumentation and to allow Sweden to respond to these new developments. If Sweden fails to act within two months in relation to these two proceedings, the Commission may refer these cases to the EU Court of Justice. 12. Further Commission's reply, received on 16 December 2014 (REV IX). The Commission opened infringement proceedings against Sweden on the Swedish Lottery Law in April 2006. The infringement relates to the provision and promotion (facilitation) of sports betting services. The proceedings against Sweden concern the restrictions referred to by the petitioner/complainant). In their previous response of 31 January 2014, the Commission services informed the European Parliament that on 20 November 2013, in two separate proceedings, the Commission had requested the Swedish government to ensure compliance with EU law of its national rules establishing exclusive rights for the provision of online betting services and for the provision of online poker services. In its replies, received by the Commission in February 2014, Sweden did not indicate that it would take the necessary steps to ensure EU-law compliance in the near future. Therefore, on 16 October 2014, the Commission decided to refer Sweden to the Court of Justice of the EU. 13. Further Commission's reply, received on 18 December 2015 (REV X). In their previous response in December 2014, the Commission services informed the European Parliament that the European Commission decided on 16 October 2014 to refer Sweden to the Court of Justice of the EU in relation to Swedish legislation for gambling services (one decision relates to online betting services and the other one to online poker games). The Commission is preparing the necessary follow-up. In parallel, the Commission's services are following the ongoing reform of the gambling market in Sweden with high interest, including the recent direct proposals for legislative amendments, and looks positively at these developments. Conclusion The Commission is examining the legal situation in Sweden in relation to gambling to ensure compliance with EU law, in view also of the ongoing reform of the gambling market in Sweden. PE362.442v15-00 8/10 CM\1127280.docx
14. Further Commission's reply (REV. XI), received on 30 November 2016 In their last two communications, the Commission services informed the Committee on Petitions that the Commission decided on 16 October 2014 to refer Sweden to the Court of Justice of the EU in relation to Swedish legislation for gambling services (one decision relates to online betting services and the other one to online poker games). However, the referral decisions have not been executed to date. As also communicated in the communication of December 2015, in the meantime, the longawaited reform of the gambling market with an introduction of a licensing system has started in Sweden. The Commission services are following this process with high interest and look positively at these developments. The results of the review process, including a legislative proposal, should be available by March 2017, with the aim of implementing the new legislation in 2018. Conclusion The Commission continues to examine the legal situation in Sweden in relation to gambling to ensure compliance with EU law, also in view of the ongoing reform of the gambling market in Sweden. 15. Further Commission's reply (REV. XII), received on 31 May 2017 In their last three communications, the Commission services informed the Committee on Petitions that the Commission decided on 16 October 2014 to refer Sweden to the Court of Justice of the EU in relation to Swedish legislation for gambling services (one decision relates to online betting services and the other one to online poker games). However, the referral decisions have not been executed to date. As also communicated in the last two communications, the long-awaited reform of the gambling market with an introduction of a licensing system has started in Sweden. A gambling inquiry was assigned to submit proposals for a new regulation of gambling based on a licensing system in which all operators on the Swedish gambling market are to have the appropriate permit a licence. The gambling inquiry submitted its proposals to the Swedish government at the end of March 2017. A consultation of the proposals is ongoing in Sweden The proposals include extensive changes for a re-regulation of the Swedish gambling market, particularly a division of the market into a competitive sector and an exclusive rights section. A licence would allow online gambling companies, Svenska Spel s competitive section and ATG to operate on the competitive section of the market with a proposed tax rate of 18%. The types of gambling that may be offered are online casino, online betting, online poker and online bingo, as well as land-based sports betting and land-based horse-race betting. Svenska Spel's exclusive rights would cover token gaming machines and land-based casinos, and it would also continue to compete with the public interest associations with respect to online and land-based lotteries. The public interest associations (non-profit sector) would continue to conduct lottery activities, both land-based and online, and land-based bingo, and remain tax exempted. CM\1127280.docx 9/10 PE362.442v15-00
The new envisaged gambling regulation intends to promote safe gambling with a high level of consumer protection, and a transparent regulatory framework considering market and technological developments as well as EU law. It is proposed to enter into force on 1 January 2019, but this depends on the political process in Sweden. Conclusion The Commission follows the legal situation in Sweden in relation to gambling to ensure compliance with EU law, taking into account the ongoing developments of the gambling market in Sweden. PE362.442v15-00 10/10 CM\1127280.docx