44 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2022 assessment policy is implemented. It has been held, both by the EFTA Court and the European Court, that a monopoly system sometimes serves the purpose of fighting addiction related to gambling more effectively than would be the case with a system authorising the business of operators that would be permitted to carry on their business in the context of a free and open competition market within a non-exclusive legislative framework. When seeking an even higher level of protection, a State is entitled to take the view that it is only by granting exclusive rights – which is subject to strict control by the public authorities – that it can tackle the risks connected with the gambling sector, thereby pursuing the objective of preventing incitement to over-spend on gambling and combating addiction to gambling with sufficient effectiveness. The Court specifically recognised the legality of a monopolistic gambling model also with regards to online gambling, something which is basically in line with its rulings that online gambling is only another form of distribution of games and not an independent business model or new category of games. Recently, in Fluctus and Fluentum, the Court took a more holistic view. The Court found that a system of organising market in games-of-chance in Austria in which the advertising practices of the holder of the monopoly on lotteries and casinos are intended to encourage active participation in the games by conferring on it a positive image by virtue of the use of the proceeds for activities in the public interest, or by increasing its attractiveness by means of attentiongetting advertisements which hold out the promise of large prizes, can be compatible with EU law and the theory of controlled expansion as already ratified by the Court. Indeed, such an increase could just as well be the result of a channelling of illegal activities into the controlled gaming networks. The ruling thus allows for a more flexible case-by-case application of advertising and commercial policy by exclusive right holders at the national level. So today it is clear that applying the monopoly model for lotteries and attracting people to play lottery games for the benefit of society is finally considered to be an appropriate way to address illegal activities on a market. The starting point of the good causes funding allocation needs to be found in the cases recognizing the prohibition or limitation of private profit. The prohibition or limitation of profit has been part of the way in which lotteries can be operated in the Member States of the European Union since the first relevant judgment on games-of-chance of the Court. This was further explicitly confirmed by the Court of Justice in the judgments in the Finnish Läärä case and later also in the Swedish Sjöberg and Gerdin cases. In these last cases the Court clarified that limiting private profit and limiting lotteries to (in)direct contributions to charities is an acceptable principle from the Swedish Gaming Policy because, just like with the Schindler judgment, it fell within the scope of consumer protection and the protection of public order. The Court further states that the basic premise of free competition does not apply in full in the games of chance market. Competition should normally lead to better products/services and lower prices for the benefit of consumers. But “better” gambling products or services and lower prices, which generally make these products/services more attractive, are not always necessarily better for consumers. In other words, it can be beneficial for consumer protection and the protection of public order to limit the number of (lottery) providers in a market. There are several ways to limit the number of providers including, but not limited to, choosing a model in which the pursuit of private profit is prohibited or limited. The prohibition or limitation of profit reduces the incentive for companies to participate in this market. It is worthwhile for fewer companies to make investments (or incur debts) if these cannot later be translated into large profits for the company and its shareholders. A prohibition/ limitation of profit therefore can serve both consumer protection and public order. This is also the opinion of the European Court’s Advocate General in the recent Admiral case, but still to be confirmed by the Court. The Court already confirmed in 1999 in a Finnish case that a monopoly regime under direct State control may be more effective in managing the risks associated with the gaming sector and in achieving the legitimate objective of preventing incitement to excessive gambling expenditure and combating addiction to gambling, than under a non-exclusive legislative framework. Moreover, the Court even considers a model of allocating the proceeds of the state lottery to charitable purposes more favourable than a licensing model with the taxation of profits: “Although the sums thus received by the State for public benefit purposes could also be obtained by other means, for example through taxation of the various entrepreneurs who would be allowed to carry out the activities in question under a non-exclusive system, the The obligation imposed on the licensed body to transfer the proceeds of its business is certainly a more effective means of setting strict limits on the profits resulting from those activities, in view of the risks of fraud and other criminal acts.” So within a context of controlling gambling in a responsible way and protecting society against crime and illegal gambling, States are permitted to grant the exclusive right holders of Lotteries or other games-of-chance more extensive powers to maximise the return to society. The uncertainty around this issue has been affecting Lotteries in Europe for decades. It is now time to consolidate these fundamental principles in the EU context. The current discussion on the Future of the EU is providing us an interesting forum to put the role of Lotteries in Europe on the table. Innovation, social justice, access to education, a healthy lifestyle including sport, social rights & employment, protection of cultural heritage, access to broad cultural events, empowerment of diversification, attention to disabled, a greener world and a future-oriented economy based upon the principle of good governance are all themes that require attention in this context and are all within the DNA of the Lotteries. We can easily provide numerous examples in many states. But let us give just one example each in relation to two European countries, Belgium and France. The French newspaper Le Figaro reported in its weekend edition (14/15 May 2022) that the Belgian National Lottery is supporting the festivities in Liège of the famous Belgian/French composer César Franck ( born in Liège in 1822). The City of Paris, where he lived most of his life, has also actively contributed to the recognition of the composer of offering a monumental sculpture by a French artist to the city of Liège. This example, and there are many others, brings alive how Lotteries contribute to a common cultural heritage. Equally important as promoting the values that Lotteries pursue, we need in the near future to consolidate the fundamental principles which Lotteries are based upon. It starts with subsidiarity and reemphasizing that within the context of the EU and its attribution of competenConsolidating the societal role of Lotteries in Europe continued from page 24
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