An uncertain legal framework

Lotteries in Europe are subject to national legislation since games of chance in general are excluded from EU secondary legislation. Nevertheless, the EU institutions are dealing with the topic in different ways, especially when it comes to online gambling because of its cross-border nature. A number of Member States are partly opening up their markets by legalizing on-line sports betting and poker, but so far lottery markets remain (state) monopolized in most Member States.

European Court of Justice

Legal proceedings at the European Court of Justice (ECJ) and several national courts following complaints from commercial (online) operators that are refused entry to foreign markets, have increased the pressure on state monopolies. Although gambling is a competence of the Member States, the rules of the Treaty such as the freedom of establishment (art. 49 TFEU) and the freedom to provide services (art. 56 TFEU) must be obeyed.

Over the past two decades numerous cases related to gambling have been dealt with by the ECJ. In various decisions (e.g. Gambelli 2003, Placanica 2007, Santa Casa 2009), the ECJ has ruled that Member States may impose restrictions on the freedom to provide services only if such restrictions can be justified by imperative requirements in the general interest. These include consumer protection, fraud prevention and preservation of public order. The restrictions must be proportional, consistent and non-discriminatory.

ACLEU regrets the fact that fundraising for good causes is considered only an ancillary effect according to ECJ jurisprudence. For the members of ACLEU fundraising is the main purpose.

Council of the European Union

Since the French Presidency in 2008 gambling related issues are regularly discussed in the Council Working Group on Establishment and Services. In December 2010, the Council produced conclusions for the first time on this matter. One of the conclusions stated that contributions from lotteries to society should be recognized in the discussions at the EU level. Although not binding to the European Commission, the Conclusions express the common political view of all Member States.

European Parliament

Since gambling is not regarded a normal economic activity, the European Parliament voted against a proposal to include games of chance in Services Directive in 2006, leaving it up to the Member States to regulate gambling (and lotteries) at the national level.

In 2009, the Parliament adopted an own-initiative report, the so-called Schaldemose report, in which Member States were called upon to cooperate more closely when it comes to online gambling and the prevention of its negative aspects such as addiction, fraud and crime. The positive aspect of fundraising for charities was not a part of the discussion unfortunately.

In 2011, as part of the consultation of the Green paper (see below) the Parliament drafted another report on this subject later this year. The first draft of rapporteur Creutzmann does recognize the fact that gambling represents a considerable source of revenue for the Member States, for publicly beneficial and charitable purposes.

European Commission

In response to the Schaldemose report, the Council conclusions and the growing amount of jurisprudence from the ECJ, the European Commission drafted a Green paper in 2011 on online gambling, followed by a public consultation. The paper deals with several  aspects of (online) gambling including the benefits for society coming from games of chance. The Green paper is considered a first step to future EU legislation, though much will depend on the outcome of the consultation and the political will within the Commission to take any further steps in this field.

The members of ACLEU are pleased to see the growing recognition at the EU institutions of contributions to society from lotteries and will continue their efforts in increasing awareness for the concept of private charity lotteries, next to state lotteries, as sustainable funding mechanisms for civil society organisations throughout the EU.