The Community provisions relating to freedom to provide services do not preclude national legislation which grants to a single public body exclusive rights to operate slot machines, in view of the public interest objectives which justify it.
In Finland, under legislation on gaming which is intended to restrict the potential profit to be made from exploitation of the desire to gamble, a single public body is authorised to organise lotteries and betting, to manage casinos and to run the operation of slot machines. The holder of the requisite administrative authorisation is obliged to collect funds for non-profit-making causes.
The public body to which such authorisation has been issued is the RAY, an association of 96 organisations operating in the fields of health and social activities.
In 1996 the English company CMS concluded a contract with the Finnish company TAS whereby the latter was given the exclusive right to instal and operate in Finland slot machines manufactured and supplied at moderate prices by CMS. The contract provides that the machines are to remain the property of CMS and that TAS is to receive, by way of remuneration, a commission representing a percentage of the profit made from the machines installed.
Mr Läärä, the chairman of TAS, was fined for infringement of the Finnish legislation on gaming. In the proceedings pending before the Finnish Court of Appeal, Mr Läärä maintained that the Finnish legislation is contrary to the principles of Community law relating to the free movement of goods and services.
The national court requested the Court of Justice to rule on the question whether national legislation which grants to a single public body exclusive rights to operate slot machines for the achievement of objectives in the general public interest is contrary to, in particular, the rules on freedom to provide services.
In the Court's view, national legislation such as the Finnish legislation involves no discrimination on grounds of nationality, inasmuch as it applies without distinction to all economic operators, whether they are established in Finland or in another Member State. However, such legislation constitutes an obstacle to freedom to provide services in that it directly or indirectly prevents operators from making slot machines available to the public. Consequently, the Court examines whether that obstacle is justified under Community law.
The Court considers that it is for each Member State to assess whether, in order to achieve the objectives aimed at, it is necessary to adopt regulations imposing a code of conduct on the economic operators concerned or, alternatively, to grant an exclusive operating right to a licensed public body. Whichever option is chosen, it must, if it is to comply with Community law, be proportionate to the aim pursued.
As it is, the restriction on freedom to provide services, which is designed to limit the risk to the social order inherent in gambling, is justified, since it is intended to protect consumers. Thus, a measure whereby a Member State, instead of imposing a total ban on gaming, regulates it by means of a limited authorisation falls within the ambit of the prevention of the risk of crime and fraud involved in an activity.
Consequently, the Court has ruled that the solution adopted in Finland, namely to grant to a single public body exclusive rights to operate slot machines and to place a strict limit on the lucrative nature of that activity, is not disproportionate to the objectives pursued.
This release is an unofficial document issued for use by the media and is not binding on the Court of Justice. It is available in all the official languages.
For the full text of the judgment, please consult our Internet website www.curia.eu.int around 3.00 pm today.
For further information, please contact Jessica Larsson: tel: (00 352) 4303 3651; fax: (00 352) 4303 2033.