Does the ECJ decision in “Digibit” overrule the ECJ decision “Carmen Media”? – No, it confirms it!

By Dr. Wulf Hambach and Dr. Stefan Bolay, Hambach & Hambach law firm

Please find below a summary and assessment of the two core statements from the ECJ and its meaning for the regulation of gambling in Germany:

What the ECJ says in paragraph 36:

• “Finally, even assuming that the existence of legislation of one Land, which is more liberal than that in force in the other Länder, might damage the consistency of the legislation at issue as a whole, it must be observed that, in the circumstances of the case in the main proceedings, such damage to consistency was limited ratione temporis and ratione loci to a single Land. Therefore, it cannot be argued that the derogating legal situation in one Land seriously affects the appropriateness of the restrictions on games of chance applicable in all the other Länder to achieve the legitimate public interest objectives that they pursue.”

What it means:

• The existence of a more liberal legislation in force in one part of the country might, in general, be able to damage the consistency of legislation as a whole throughout the country. This indicates that a “horizontal coherency test” might be applicable. However, under this particular case, such damage was limited to a particular state and time. Under these circumstances, the legal situation does probably not affect restrictions on games of chance in all other states.

What we say:

• The ECJ does not define or even indicate what amounts to a “serious affection” and when the same would occur.
• The ECJ ignores that the (factual) incoherency in Germany will continue for subsequent years, since 25 sports betting licenses and 23 online poker and casino licenses remain valid in SH which allow advertising in the press and media all over Germany.

What the ECJ said in paragraph 41

• “Having regard to all the foregoing considerations, the answer to the questions referred is that Article 56 TFEU must be interpreted as meaning that it does not preclude legislation common to the majority of the federal entities of a Member State having a federal structure which prohibits, in principle, the organisation and facilitation of games of chance via the internet, where, for a limited period, a single federal entity has maintained in force more liberal legislation coexisting with the restrictive legislation of the other federal entities, provided that such legislation is able to satisfy the conditions of proportionality laid down by the case-law of the Court, which is for the national court to ascertain.”

What it means:

• The coexistence between the more liberal gambling regulation of Schleswig-Holstein on the one hand and the less liberal gambling regulation of the Interstate Treaty on Gambling on the other hand can be acceptable under European law, so long as the less liberal gambling regulation “is able to satisfy the conditions of proportionality laid down by the case-law of the Court”.

What we say:

• The reference to the “case-law of the Court” means nothing more than a confirmation of the Carmen Media judgement:

The ECJ asks the German courts to apply the measures outlined by the ECJ in the Carmen Media decision and make its own assessment of whether or not the ITG is in compliance with Union law.