In light of last year's preliminary ruling by the European Court of Justice, the Council of State recently concluded that the current system for the grant or renewal of a licence for games of chance to a single operator without competitive tendering restricts the freedom to provide services as laid down in Article 56 TFEU. It is only in the event of a public operator subject to direct State supervision, or a private operator subject to strict control by the public authorities, that no competitive tendering procedure needs to be in place for the grant or renewal of a licence.1
In the Netherlands, a single-operator licensing scheme exists regarding games of chance. De Lotto, a non-profit-making foundation governed by private law, holds the requisite licence for the organisation of sports-related prize competitions, the lottery and numbers games. The UK-based company Sporting Exchange (Betfair) provides gaming services solely via the internet and by telephone on the basis of British and Maltese licences. Betfair's application for a licence in the Netherlands was refused by the Minister for Justice (minister) on account of the single licence system. In appeal, Betfair argued inter alia that the Dutch authorities should respect the principle of transparency when granting a licence for the provision of games of chance.
The Council of State requested a preliminary ruling by the European Court of Justice (ECJ) on the compatibility of the Dutch licensing system with EU law. The ECJ ruled that there is nothing wrong with the Dutch single-licence system, but that the principles of equal treatment and transparency should apply to procedures for the grant and renewal of a licence to a single operator, in so far as the operator in question is not a public operator whose management is subject to direct State supervision or a private operator whose activities are subject to strict control by the public authorities.2 Compliance with these principles means that a competitive tendering procedure should be in place in the event the relevant operator does not satisfy the latter conditions.
In the national proceedings, the Council of State thus needed to ascertain whether De Lotto qualified as either a public operator or a private operator controlled by public authorities in order to determine whether the minister's licence grant to De Lotto was justified. After having established that De Lotto is a private operator, the Council of State reasoned that there should be a "special relationship" between the public authorities and the private operator in order to satisfy the ECJ's condition of "strict control". According to the Council of State, the minister's authority to grant, renew, withdraw or attach conditions to a licence was not "special" enough to qualify as strict control, since the minister could exercise these powers as regards any operator competing for a licence. Consequently, the Council of State ruled the grant or renewal of a licence to De Lotto without any competitive tendering procedure incompatible with Article 56 TFEU.
Footnotes
1. See the ruling by the Council of State of 23 March, 2011, LJN: BP8768.
2. Case C-203/08, Sporting Exchange Ltd, 3 June 2010.
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