22nd February 2012

The Court of Justice of the European Union (CJEU) has ruled that Italian gambling legislation seeks to protect the market position of licensed companies at the expense of new entrants, in violation of EU law. The ruling was given following a reference for a preliminary ruling under Article 267 of the Treaty on the functioning of the European Union. It is a result of the still ongoing clash between Italian authorities and Stanleybet, a UK bookmaker prevented from applying for a gambling licence in Italy between 1998 and 2006 and dissatisfied with the licensing conditions and procedures introduced in Italy thereafter.

The reference to the CJEU was made by the Italian Corte Suprema di Cassazione in Italy following criminal proceedings brought against Messrs Costa & Cifone, the managers of data transmission centres bound by contract to Stanleybet. Messrs Costa & Mr. Cifone were charged with infringing Italian law by carrying out the activities of collecting and managing bets without a licence.  The CJEU ruled that EU Member States are precluded from excluding a category of operators from the award of licenses in breach of EU law, as well as from discriminating against new entrants to the market in order to safeguard the interests of current licensees and increase tax revenues, and thus that the sanctions are illegal and rendered invalid.  It was then stated that greater clarification was needed over the procedure for awarding and withdrawing betting licenses in Italy.  This judgement reaffirms that national legislation regulating a country’s gambling market must ensure fair market access and may not discriminate against any new operators.

For more information contact James Scicluna (james.scicluna@whpartners.eu) or Olga Finkel (olga.finkel@whpartners.eu)