The Use of the Margin of Appreciation in EU Gambling Law

Abstract

The doctrine of the margin of appreciation has been key in the gambling case law. At international level, this doctrine was introduced by the European Court of Human Rights, which has defined the contours of the doctrine in a rich and diversified case law. The chapter examines the use of the margin of appreciation in relation to the concerns relevant in the area of gambling: health (addiction), crime and public morality. It aims to identify the principles and criteria that have steered the application of the doctrine in Strasbourg and to use these findings to analyse the gambling case law in Luxembourg. This exercise allows theorising the use of the margin of appreciation in a greater context.

An earlier chapter showed manifold commonalities between the judicial settings in Strasbourg and Luxembourg. The doctrine serves to address the universality-diversity dichotomy, and both judiciaries apply a proportionality review to counterbalance the discretion a priori granted. Naturally, the differences of the courts must also be taken into account.

The chapter concludes that the criteria in the Strasbourg Court’s practice do not support the wide discretion that the Court of Justice has granted in the area of gambling. While the Strasbourg Court does grant a wide margin of appreciation in relation to public morality concerns, this is only the case in situations where the cases exclusively regard morality issues. With regard to crime and health (addiction) concerns, wide discretion is only granted where this is justified by the factors urgency and severity of the danger.

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In the previous chapter, it was established that the Court of Justice recognised public interest objectives relating to threefold concerns: concerns relating to criminal activities, concerns relating to public morality and concerns relating to the health of consumers (gambling addiction). The present chapter inquires the use of the margin of appreciation specifically in relation to these concerns. Since the doctrine was introduced and heavily shaped by the ECtHR (Sect. 8.1), a thorough analysis of that court’s rich and detailed practice of the doctrine shall establish the principles (Sect. 8.2) and criteria that steer the application of the doctrine in cases relating to crime, public morality and health (Sect. 8.3). The thoroughness of this part of the analysis finds justification in that the doctrine has played a key role in the development of the gambling jurisprudence. Subsequently, the findings are contrasted with the use of the margin of appreciation in the gambling case law of the Court of Justice and the EFTA Court (Sect. 8.5). Chapter 8 exclusively focuses on the margin of appreciation that is a priori granted. Chapter 9 will subsequently take a detailed look at how this general approach has been balanced in the gambling case law by an adequate proportionality review.

1 Reasons for Taking a Comparative Look at the European Court of Human Rights

The use of the margin of appreciation in the gambling cases is a delicate issue. The stakes involved are very high and it can be no surprise that government agents demand the widest possible margin of appreciation while private operators advocate the strictest possible review of national restrictions. The use of the margin of appreciation is a complex process as it involves the balancing of various factors. An isolated look at the gambling cases risks to be dominated by personal views that one may have towards gambling issues. Consequently, the use of the margin of appreciation in the gambling cases needs to be viewed in the larger context of the doctrine as a whole.

The ECtHR has shaped the doctrine of the margin of appreciation like no other court.¹ In fact, a discussion of this doctrine is hardly imaginable without a comparative look at Strasbourg.² At the international level, the first recourse to the margin of appreciation occurred under the Convention system.³ It was shown that the raison d’être of the margin of appreciation is essentially identical in the Internal Market setting and under the Convention system. The doctrine serves to address the universality-diversity dichotomy (see Sect. 3.4.2). Similarly, both the Strasbourg and Luxembourg judiciaries apply a proportionality review to counterbalance the discretion a priori granted.⁴ Over decades, the Strasbourg Court has acquired extensive experience in applying the doctrine. It is the quantity and the diversity of issues that have allowed for the development of a detailed and diversified case law.

As Sweeny correctly argued, the case law of the ECtHR can offer helpful guidance in steering the margin of appreciation in Internal Market issues,⁵ and the gambling jurisprudence is just one out of many possible applications. In countless cases, the ECtHR has addressed the justification grounds raised in relation to gambling issues: crime (confer in the gambling cases: money-laundering or fraud), public morality (confer: moral concerns regarding gambling) and health (confer: protecting consumers from gambling addiction).⁶

2 How to Steer the Margin of Appreciation: General Principles

2.1 General Considerations

This section presents the general principles that the ECtHR has established and which ensure that the use of the doctrine is steered in a coherent and non-arbitrary manner.

In the context of the Convention, the doctrine of the margin of appreciation is better suited for certain rights than for others. The doctrine has been mostly used in relation to emergency cases (Article 15), anti-discrimination (Article 14) and of course the personal freedoms under Articles 8–11⁷ as well as the right to property (Article 1 of Protocol No 1).⁸ Even though the Court has never expressed a limitation to a numerus clausus of Convention rights,⁹ it has not applied the doctrine regarding certain rights.¹⁰ The rights enshrined in Articles 2–7 are not well suited to accommodate a classic balancing act of interests and the discretion that may be granted within this balancing act.¹¹

The provisions protecting personal freedoms (Articles 8–11)¹² are particularly apt to accommodate the doctrine. Similar to the fundamental freedoms in the Internal Market, they enshrine the characteristic structure of a principle combined with a derogation clause. The first paragraph states the general principle – a right that any person shall enjoy – while the second paragraph mentions the conditions under which derogations to the general rule are permitted. Comparable to the practice of the Internal Market Courts, exceptions are to be interpreted narrowly also in the Convention system.¹³ Limitations must reflect a ‘public interest’, be ‘prescribed by law’ and ‘necessary in a democratic society’.¹⁴ Accordingly, the following analysis takes into account in particular Articles 8–11 of the Convention. Prior to specific criteria, a few overriding principles are presented that guide the ECtHR’s use of the margin of appreciation.

2.2 The Role of the Motivation of the Decision

The first principle of review is a careful assessment of the motivation of the national decision. Not even the widest discretion would prevent the ECtHR from reviewing the decision. A thorough judicial review of the motivation is all the more important where wide discretion is granted to national authorities. According to Judge Villiger, the jurisprudence of the ECtHR shows that a convincing, coherent motivation ties to a considerable extent the hands of the Court. If this is not the case, the Strasbourg Court no longer feels bound to the margin of appreciation a priori granted.¹⁵ The motivation of the decision must be relevant and sufficient.¹⁶ The defending government must convincingly establish both the objective and the proportionality of the restrictions.¹⁷

2.3 The Importance of the Convention Right

The width of the margin of appreciation varies between different Convention rights. Some rights take a particularly important role within the Convention system and a detailed review of the national measures is indicated:¹⁸

the scope of the margin of appreciation enjoyed by the national authorities will depend […] on the nature of the right involved. […] The importance of such a right to the individual must be taken into account in determining the scope of the margin of appreciation allowed to the Government.¹⁹

The jurisprudence shows that a particular importance is not assigned to a provision as a whole. Only certain expressions of the respective provision may be considered particularly important, and as a consequence hardly any margin of appreciation will apply to these expressions. With regard to Articles 8–11, the particularly important expressions involve core aspects of private sphere as well as political debate.²⁰ At the other end of the spectrum with lesser importance would be for instance the rights of coalitions under Article 11, more precisely activities of trade unions, the conduct of collective bargaining and the right to strike.²¹

The genesis of the Convention explains this prioritisation, which was heavily influenced by the experience of atrocities committed by totalitarian regimes. One of the key power tools of totalitarism is the suppression of free political debate and the intrusion of the official ideology in all aspects of private life. As such, the ECtHR has given particular importance to those aspects of Article 8 (private life/home) that concern the most intimate aspects of private life, such as the sexual life of a person.²² Other examples include the integrity of the home, protection of personal data and the professional secrecy between client and counsel.²³

Parallel considerations apply to the freedom of expression under Article 10. This freedom is especially important since it plays a central role in a democratic society,²⁴ including the expression of personal views and on public affairs.²⁵ The Court has also repeatedly underlined the special role of elected representatives and of the press as the public watchdog. The public had a right to receive such information.²⁶ Similarly, a very narrow margin of appreciation applies generally to the freedom of thought, conscience and religion under Article 9.²⁷

Some expressions of Convention rights are therefore considered to be more important than others. Some authors have gone as far as to create a hierarchy of provisions in the form of an atomic or solar system.²⁸ Any schematic depiction must however consider that it is normally not the provision but only certain expressions of the right that profit from a particularly high importance.²⁹

2.4 The Nature of the Justification Ground

Similar to the importance of the Convention right, the nature of the justification ground matters greatly. The relevant question is whether the justification ground is somehow special or different. Certain characteristics of that nature may justify granting wider discretion to domestic authorities. While most justification grounds do not lead to a wide margin of appreciation, some nevertheless do. This point will be discussed directly in relation to the relevant grounds crime (prevention), public morality and health.

3 How to Steer the Margin of Appreciation: Criteria in Relation to Crime, Health and Public Morality

The previous section established a couple of general principles that steer the use of the margin of appreciation. This section now analyses the criteria that have been developed specifically in relation to crime, public morality and health. As the ECtHR’s use of the doctrine is extremely voluminous, this section is informed by publications that looked at this issue in great detail.³⁰

Since restrictions to the freedom to provide gambling services have been justified on grounds of crime prevention, health (gambling addiction) and public morality, the use of the margin by the ECtHR must be studied in relation to related grounds. Particular attention is paid to health and public morality as these findings will prove to be very instructive for the analysis of the gambling case law.

3.1 Crime

The ECtHR has dealt with crime as a justification ground in countless cases. It differentiated between various forms of crime; not all of them profit from the same width of discretion.

In the early days of the Convention, both the Commission of Human Rights and the ECtHR applied the doctrine in relation to public emergency cases under Article 15. The very wording of this provision makes it likely that national authorities enjoy wide discretion in relation to emergency measures.³¹ The two characterising elements of public emergency cases are the time factor, namely urgency (“the pressing needs of the moment”)³² and the seriousness of the threat (“[i]n time of war or other public emergency threatening the life of the nation”).³³ This combination of two special factors justifies a wide margin of appreciation. The doctrine of the margin of appreciation was introduced in the Convention jurisprudence by the Human Rights Commission’s report on the Cyprus case.³⁴ At the time, the UK administered the island of Cyprus and pleaded a state of emergency. From the outset, the Human Rights Commission made it clear that while it grants discretion, it also reviews the decision:

The Commission was in no way precluded by the Convention from reviewing a decision taken by a Government in derogation of the Convention under Article 15 and from examining critically the appreciation of the Government as to the exigencies of the situation. On the other hand, it was a matter of course that the Government concerned was in a better position than the Commission to know all relevant facts and to weigh in each case the different possible lines of action for the purpose of countering an existing threat to the life of the nation. Without going as far as to recognise a presumption in favour of the necessity of measures taken by the Government, the Commission was of the opinion, nevertheless, that a certain margin of appreciation must be conceded to the Government.³⁵

The Human Rights Commission continued to use the doctrine in subsequent cases such as Lawless ³⁶ and the Greek Colonels cases.³⁷ In the Greek Colonels cases, it clarified that the burden of proof rested with the government, which had to show that the conditions to derogate from the Convention in Article 15 were met.³⁸

With regard to the Strasbourg Court, that body implicitly applied the doctrine in its first case Lawless in 1961³⁹and continued to do so in subsequent cases.⁴⁰ The first express reference to the doctrine by the ECtHR was in relation to Article 8 in De Wilde,⁴¹ referring to it as the ‘power of appreciation’.⁴² The Strasbourg Court expanded over time the scope of application of the doctrine from emergency cases (Article 15) to non-discrimination (Article 14) and Articles 8 to 11 that contain the characteristic accommodation clause.⁴³ Yet, the jurisprudence of the Strasbourg Court shows that the use of the margin of appreciation in emergency cases forms a special category:

The limits on the Court’s powers of review […] are particularly apparent where Article 15 (art. 15) is concerned. […] By reason of their direct and continuous contact with the pressing needs of the moment, the national authorities are in principle in a better position than the international judge to decide both on the presence of such an emergency and on the nature and scope of derogations necessary to avert it. In this matter Article 15 para. 1 (art. 15-1) leaves those authorities a wide margin of appreciation.⁴⁴

In spite of the wide margin, the ECtHR still exercises a European supervision by inquiring whether the state has gone beyond the “extent strictly required by the exigencies.”⁴⁵ What is more, when governments claim a state of emergency the Council of Europe will proceed to inquiries on the spot.⁴⁶

Regarding the use of the margin in the accommodation clauses of Articles 8–11, there are two justification grounds that stand out. The first is national security. The nature of this ground is somehow related to the concerns surrounding public emergency cases. The ECtHR grants an a priori wide margin in such cases too.⁴⁷ The second category is terrorism.⁴⁸ Within the bigger category of ‘crime’, it forms a special case. The ECtHR’s practice is coherent in that authorities taking measures against terrorism regularly need to consider the two characteristic elements of urgency and severity:

Democratic societies nowadays find themselves threatened by highly sophisticated forms of espionage and by terrorism, with the result that the State must be able, in order effectively to counter such threats, to undertake the secret surveillance of subversive elements.⁴⁹

The close relationship of the fight against terrorism and national security is evident from the case law and the literature. The ECtHR recognised that both grounds can serve as justifications in a case,⁵⁰ and the margin of appreciation has been analysed in the literature jointly in relation to both grounds.⁵¹ The grounds of national security and the fight against terrorism generally lead to a wide margin of appreciation.⁵² This differs strongly from judgments relating to concerns of crime and disorder more generally.⁵³ Crime in general or public order does not lead to domestic discretion.⁵⁴ In these cases, the ECtHR did not mention the doctrine. It also did not grant any particular discretion where this justification ground has been used;⁵⁵ other considerations were more relevant such as the special status of a prisoner or military staff that can lead to a widening of the margin of appreciation.⁵⁶ Apart from these special relations to state authorities, crime concerns do not trigger any particular margin of appreciation.

Starting around the 1990s, the case law shows a certain shift, and the aforementioned description of older case law needs to be adjusted in two regards. First, authors have observed that a wide margin is no longer regularly granted in relation to national security and terrorism.⁵⁷ In several cases, the doctrine was neither mentioned nor effectively granted.⁵⁸ In other cases, the ECtHR argued certain discretion but with another aspect such as the special status of the applicants.⁵⁹ Second, if national security is not the sole ground on which the ruling is based, the discretion shrinks. Examples include Observer and Guardian ⁶⁰ as well as Sunday times (no 2).⁶¹ In these cases, national security was only one among other grounds invoked.⁶² This is a noteworthy aspect that will be revisited in relation to public morality concerns.

3.2 Health

3.2.1 Notion

Articles 8–11 of the Convention list the protection of health as one of the recognised justification grounds for restrictions of human rights. The justification ground ‘health’ is of essential importance for the present analysis as the protection of consumers’ health from gambling addiction is one of the central justifications in the gambling case law. The term health in the Convention includes the psychological and physical well-being of an individual person or small groups of persons as well as the public health generally.⁶³ Accordingly, this definition encloses mental health disorders such as relating to gambling. Gambling addiction impacts the psychological and physical well-being of a person.⁶⁴ The present analysis in relation to health is twofold. It first assesses the use of the margin of appreciation in cases involving health issues and second, it takes a close look at the role that has been granted to medical research and empirical evidence in the review process.

The health concerns in the gambling cases relate in particular to the protection of vulnerable individuals such as children and adolescents.⁶⁵ The next chapter will show that adolescents evidence a clearly increased vulnerability towards gambling addiction (see Sect. 9.1.3.5). Similarly, health concerns regarding children and adolescents have been pleaded in numerous cases before the ECtHR. The other vulnerable group involves the health and well-being of persons of ‘unsound mind’ under Article 5(1)(e) in the context of the deprivation of personal freedom.

3.2.2 Protection of Well-Being and Health in Childcare

The childcare cases regard situations where a child was separated from its parents (or one parent) and put in state childcare or where the child was adopted by new legal parents. Article 8 of the Convention protects the (natural) parent(s)’ right to family life, inter alia “the mutual enjoyment by parent and child of each other’s company.”⁶⁶ Authorities for their part justify limitations of that right with interests relating to the child’s health.⁶⁷ The objective of the measure is to protect the child from physical or mental harm.⁶⁸

3.2.2.1 General Considerations

In its jurisprudence on health concerns, the ECtHR has constantly underlined the importance of combining discretion with the central role of the proportionality review. The motivation put forward had to be relevant and sufficient.⁶⁹ A careful weighing of all interests involved needed to be done. In spite of offering particular importance to the best interests of the child,⁷⁰ the protection of the child’s health interests must be balanced with the interests of the parents. The ECtHR goes as far as to note that “it is not enough that the child would be better off if placed in care.”⁷¹ While acknowledging in certain situations a certain margin of appreciation,⁷² the ECtHR’s review is strict:

[The Court’s] review is not limited to ascertaining whether a respondent State exercised its discretion reasonably, carefully and in good faith […] in exercising its supervisory jurisdiction, the Court cannot confine itself to considering the impugned decisions in isolation, but must look at them in the light of the case as a whole; it must determine whether the reasons adduced to justify the interferences at issue are “relevant and sufficient”.⁷³

The ECtHR seems in particular to reject a role that would be limited to a mere test of arbitrariness and unreasonableness as referred to in the earlier mentioned Wednesbury test in common law.⁷⁴ It insists on a full proportionality review.

3.2.2.2 Very Restrictive Measures Hardly Justifiable

The ECtHR has constantly emphasised the temporary character that measures should take:

taking into care of a child should normally be regarded as a temporary measure to be discontinued as soon as circumstances permit, and any measures of implementation of temporary care should be consistent with the ultimate aim of reuniting the natural parent and child.⁷⁵

Absolute measures, namely measures that deprive the parents of their right to family life, “should only be applied in exceptional circumstances and could only be justified if they were motivated by an overriding requirement pertaining to the child’s best interests.”⁷⁶

Therefore, it is difficult to argue very restrictive measures before the ECtHR, in particular permanent or absolute measures.

3.2.2.3 Time Factor: Urgency

It was noted earlier that the urgency character of public emergency cases (and partly of national security and terrorism issues) may lead the Strasbourg Court to grant wide discretion to national authorities. In line with that criterion, the ECtHR distinguishes between two phases in childcare. It grants a wide margin only in relation to the initial decision of taking a child into care but not with regard to the decision to keep it in care. Authorities enjoy a wide margin of appreciation when initially assessing the necessity of childcare, especially in emergency situations. Moreover, the assessment of the appropriateness of intervention can vary from one state to another,⁷⁷ which reminds of the similar recognition of the Court of Justice that protection levels can vary between Member States (see Sect. 8.5). Many of the childcare cases originated in Nordic countries⁷⁸ where the role of the state is more comprehensive and authorities are in charge of many functions that traditionally were fulfilled by parents.⁷⁹ By contrast, measures that do not require urgent action, such as the decision on the continuation of public childcare or more far-reaching restrictions, do not profit from widened discretion:

a stricter scrutiny is called for both of any further limitations, such as restrictions placed by those authorities on parental rights and access, and of any legal safeguards designed to secure an effective protection of the right of parents and children to respect for their family life.⁸⁰

3.2.2.4 Procedural Rights and Administrative Burden

The ECtHR’s willingness to grant wide discretion has decreased over the years. More recent decisions show that the Court is less inclined to grant substantial discretion. It assesses carefully whether the parents are duly involved in the process of determining the custody.⁸¹ They must also be given access to information that authorities rely on in their decisions. Administrative difficulties of authorities are not seen as primarily relevant. Irrespective of encountering difficulties, the state has, in the ECtHR’s view, the positive obligation to involve the parents. The mere fact that a solution chosen by the authorities is less burdensome on them when compared to another solution, which would restrict less the right to family life, is almost irrelevant.⁸²

3.2.3 Persons of Unsound Mind

The second category in which health considerations have played an important role regards the lawful detention of persons of ‘unsound mind’ under Article 5(1)(e). The term refers to people who suffer from a mental illness, either permanently or temporarily. Authorities can lawfully restrict somebody’s liberty if that person is a danger to the health of others or to his own health.⁸³

3.2.3.1 Time Factor: Urgency

The time factor plays again an important role in the use of the margin of appreciation. Similar to what was seen in relation to public childcare interventions, the ECtHR offers wide discretion to local authorities in relation to emergency confinements of mentally ill persons.⁸⁴ However, the wide discretion is to some extent counterbalanced by the fact that the term ‘unsound mind’ is interpreted narrowly. The objective of Article 5(1) is that no one is dispossessed of his liberty in an arbitrary manner and the exception cannot “be taken as permitting the detention of a person simply because his views or behaviour deviate from the norms prevailing in a particular society.”⁸⁵

3.2.3.2 Review of Consistency of Policy

The Strasbourg Court reviews strictly whether the measures truly serve the purpose pleaded by the government. In Aerts, the plaintiff could not be held criminally responsible for certain offences. He was detained in the psychiatric wing of a prison. The ECtHR found that if the exception clause of unsound mind was argued, the detention of that person had to take place in an appropriate institution where the relevant treatment could be offered.⁸⁶

[T]here must be some relationship between the ground of permitted deprivation of liberty relied on and the place and conditions of detention. In principle, the “detention” of a person as a mental health patient will only be “lawful” for the purposes of sub-paragraph (e) of paragraph 1 if effected in a hospital, clinic or other appropriate institution […] The reports […] show sufficiently clearly that the Lantin psychiatric wing could not be regarded as an institution appropriate for the detention of persons of unsound mind, the latter not receiving either regular medical attention or a therapeutic environment. […] The proper relationship between the aim of the detention and the conditions in which it took place was therefore deficient.⁸⁷

The ECtHR thus stresses the consistency of a policy. If health concerns are pleaded, the relevant measures or programmes must convincingly reflect these health concerns, and they must be suitable to address the concerns. It emphasises the decisive role of the policy as it is practised, not simply as it is foreseen in the law. Similarly, it underlined in Ashingdane that the lawfulness of the measures was not simply about the correctness of the initial order but also about matters such as the place, environment and conditions of detention.⁸⁸ The institution should ensure physical safety with adequate therapeutic and recreational programmes and continuous contact with the outside world.⁸⁹

[N]o detention that is arbitrary can ever be regarded as “lawful”. […] there must be some relationship between the ground of permitted deprivation of liberty relied on and the place and conditions of detention.⁹⁰

3.2.3.3 Central Role of Medical Science and Empirical Evidence

In the context of the gambling cases, a further aspect of the jurisprudence of the ECtHR is highly instructive: the central role that it assigns to science. Repeatedly, it underlines the essential role of empirical evidence and its evolving nature. Unsound mind is

a term whose meaning is continually evolving as research in psychiatry progresses, an increasing flexibility in treatment is developing and society’s attitude to mental illness changes, in particular so that a greater understanding of the problems of mental patients is becoming more wide-spread.⁹¹

A restriction of liberty preconditions “medical evidence establishing that his mental state is such as to justify his compulsory hospitalisation.”⁹² Confinement can only be continued if the disorder persists.⁹³

A position that reflected broadly accepted research findings two decades ago may not reflect current international scientific knowledge. With certain time lag, newly gained scientific knowledge first affects the scientific discourse and only subsequently the general perception in society. The Strasbourg Court underlines the role of science and empirical evidence as it is a means to objectivise the decision-making process. Medical evidence is a substantial safeguard against arbitrariness and the abuse of Article 5 for other purposes.⁹⁴

The established principles of medicine are admittedly in principle decisive in such cases; as a general rule, a measure which is a therapeutic necessity cannot be regarded as inhuman or degrading. The Court must nevertheless satisfy itself that the medical necessity has been convincingly shown to exist.⁹⁵

3.2.3.4 Medical Discretion

While the ECtHR insists on the central role of science, it offers discretion to the medical personal and the authorities when assessing complex facts. It refers to established principles of medicine,⁹⁶ psychiatric principles generally accepted at the time as well as to medical necessity;⁹⁷ it underlines that “it is for the medical authorities to decide, on the basis of the recognisable rules of medical science, the therapeutic methods to be used.”⁹⁸ The ECtHR relies on the medical expertise except if there are reasons to doubt the professional assessment.⁹⁹ In Winterwerp for instance, it had “no reason whatsoever to doubt the objectivity and reliability of the medical evidence.”¹⁰⁰ A clinic or a doctor thus enjoys wide discretion in determining the relevant data.¹⁰¹ However, ‘medical discretion’ is not granted if the ECtHR has indications that the diagnosis was not reached by a suitably qualified expert or that there were other indications, which made the ultimate decision not objective or professional. It departs from the results of a diagnosis if it was made in bad faith or for a collateral purpose.¹⁰²

3.2.3.5 Complex Factual Assessments

It is principally for the local authorities to evaluate the evidence before them as they are better placed to evaluate the evidence.¹⁰³ The Court simply reviews their decisions. The local authorities enjoy the direct contact with the interested parties and can hear them in person.¹⁰⁴ They are “in a better position than the European judges in striking a fair balance between the competing interests involved.”¹⁰⁵ Domestic authorities, including courts, “had the benefit of reports from child psychiatrists and a psychologist as well as from specialised agencies.”¹⁰⁶ Medical assessments are part of the fact-finding process. The ECtHR’s general policy is to rely on facts that are established by the national courts and to apply deference to medical opinions.¹⁰⁷ Medicine does not always offer clear answers; this is further reason for granting discretion to domestic authorities.¹⁰⁸

3.2.3.6 Professional Standards

The question remains how the ECtHR can effectively review national measures if it offers discretion regarding medical expertise. The Court underlines the central role of best practice and empirical evidence. While the ECtHR cannot itself establish the exact state of the art of best medical practice, it can strictly review whether the authorities and experts applied professional standards.¹⁰⁹ These obligations include the duty to take careful notes of the patient’s state of health. In Keenan v UK, the Court was

struck by the lack of medical notes concerning Mark Keenan, who was an identifiable suicide risk and undergoing [.] additional stresses […]. Given that there were a number of prison doctors who were involved in caring for Mark Keenan, this shows an inadequate concern to maintain full and detailed records of his mental state and undermines the effectiveness of any monitoring or supervision process.¹¹⁰

Substantive medical professionalism serves as safeguard for the Convention rights.¹¹¹ In this context, the Council of Europe enshrined a duty to keep medical notes in one of its recommendations. Article 13(2) stipulates that “[c]lear and comprehensive medical and, where appropriate, administrative records should be maintained for all persons with mental disorder placed or treated for such a disorder.”¹¹² The Recommendation further describes in its Articles 11 and 12 professional standards and general principles of treatment.¹¹³

3.2.3.7 Role of Domestic Court

The Strasbourg Court takes a holistic view: it considers the whole judicial scrutiny process, which also includes domestic courts. The latter’s role in the review process may depend on the discretion enjoyed by other authorities. In areas where parliamentary scrutiny is weak, the ECtHR demands strict judicial review. An effective control was especially needed where the executive enjoyed wide discretionary powers and parliamentary scrutiny was low.¹¹⁴

[A]n interference by the executive authorities with an individual’s rights should be subject to an effective control which should normally be assured by the judiciary, at least in the last resort, judicial control offering the best guarantees of independence, impartiality and a proper procedure.¹¹⁵

3.2.4 Results

Over all, the analysis of the ECtHR’s case law in relation to health concerns shows that the Strasbourg Court does not grant any particular margin of appreciation. It does however grant wider discretion where situations show urgency. This is the case in relation to the initial decision of taking a child into care or a person of unsound mind into detention. The Strasbourg Court heavily emphasises the central role of science, empirical evidence, best practice and professionalism. This serves to objectivise the decision-making process and to avoid arbitrariness.

3.3 Public Morality

3.3.1 General Approach

Handyside is arguably one of the most prominent decisions of the ECtHR. Mr Handyside, an English Publisher, delivered bookstores with ‘The Little Red Schoolbook’, which was mainly aimed at school children, age 12 and above. The book was seized due to its controversial content regarding certain passages that described actions that could appear as morally questionable or illegal.¹¹⁶ Handyside is the role model of a public morality case. It exclusively concerned that justification ground, and the UK authorities argued protecting a particularly vulnerable population group: children and adolescents. The ECtHR granted wide discretion:

it is not possible to find in the domestic law of the various Contracting States a uniform European conception of morals. The view taken by their respective laws of the requirements of morals varies from time to time and from place to place […]. By reason of their direct and continuous contact with the vital forces of their countries, State authorities are in principle in a better position than the international judge to give an opinion on the exact content of these requirements […]. Article 10 […] leaves to the Contracting States a margin of appreciation. This margin is given both to the domestic legislator (“prescribed by law”) and to the bodies, judicial amongst others, that are called upon to interpret and apply the laws in force.¹¹⁷

The Strasbourg Court applies a wide margin of appreciation in relation to public morality concerns,¹¹⁸ as well illustrated in Handyside. Certainly, the wide discretion granted in Handyside was also likely due to the fact that the book was primarily aimed at school children. The Human Rights Commission and the ECtHR have more readily accepted an intervention by the state when the authorities aim at protecting youth.¹¹⁹ This motivation was also central in the case Müller versus Switzerland, which concerned the exhibition of sexually explicit art. The ECtHR noted that the exhibition was open to everybody, including children.¹²⁰

The special characteristic justifying a wide discretion is linked to the fact that pure questions of morality are, by their very nature, not open to an objective assessment. Views on moral issues vary strongly by culture, time, geography, religion and, last but not least, individually. Are questions of morality thus exempt from judicial review?

The answer is found in Open Door and Dublin Well Woman v Ireland,¹²¹ another role model case of public morality. Several Irish organisations provided counselling to pregnant women in Ireland regarding abortion facilities outside of Ireland. In Ireland, abortion was banned. A court injunction prohibited those organisations to provide information on abortion facilities abroad. Before the ECtHR, the Irish government argued that the former should refrain from reviewing moral considerations. However, the Court reviewed the measure and found the Irish limitation of the freedom of expression disproportionate:

The Court cannot agree that the State’s discretion in the field of the protection of morals is unfettered and unreviewable.¹²²

The Strasbourg Court’s outspoken reply is evidence of its conviction that discretion does not exclude a review of the aim and of the proportionality in relation to public morality concerns. In the Irish case, it was decisive that the national measures were overbroad; they imposed an absolute and permanent restraint. Moreover, the measure was found to be not even suitable as Irish women could get the respective information through other channels too. They went in significant numbers to the UK to receive abortion services.¹²³

The ECtHR recognises the special nature of public morality issues and acknowledges an a priori wide margin of appreciation to national authorities. On the whole, public morality concerns generally lead to more significant self-restraint on the part of the Court than in cases where national security is pleaded.¹²⁴ At the same time, the ECtHR insists on reviewing the aim and the proportionality of the measures.

3.3.2 Limitations: Pure Question of Morality? European Consensus?

Two important limitations of the wide margin of appreciation must be noted as they both serve as safeguards against the abuse of the public morality justification. First, the ECtHR grants wide discretion only if the case relates to a pure question of public morality, that is, when there is no other justification ground in view. This is consistent with what has been mentioned earlier in the context of crime, more precisely, national security and emergency cases. Public morality concerns do not lead to a wide margin of appreciation if they are not the sole justification in the case.¹²⁵

This approach of the Strasbourg Court is consistent with the twofold model of public morality concerns that was suggested in Sect. 7.3. Cases involving questions of morality essentially fall in two categories. In the first category, the moral disapproval concerns the activity as such (‘core cases of morality’). Were an international court to impose its own moral views, it would take a big risk of hampering the acceptance of its case law. By contrast, the second category of moral concerns does not disapprove of the activity as such but of the detrimental consequences that the activity potentially involves. In relation to this latter category, science can play a constructive role by objectivising a discussion on risks. Nevertheless, it must be acknowledged that the scientific paradigm also has its limits. In the very last, it has established methods to distinguish the objective appearance of information from subjective reactions to it.¹²⁶

The second limitation pertains to the fact that the ECtHR does not grant wide discretion if it can identify a common moral position, a consensus among the Signatory States. While the ECtHR accepts that different states may have different views on questions of morality,¹²⁷ it does not approve when a Signatory State is clearly lagging behind. Consensus may be witnessed not only in law but also in practice. If the Strasbourg Court notes such consensus, it narrows down the initially granted wide margin of appreciation. This criterion can be understood as an attempt to assess something objectively, namely morality, which is generally hard to assess in any objective way. The ECtHR has repeatedly used this criterion,¹²⁸ which also illustrates well the dynamic method of interpretation of the ECtHR. The Strasbourg Court interprets the Convention as a living instrument in the light of present day conditions.¹²⁹ The extent of discretion thus depends on the presence of a consensus.¹³⁰

3.3.3 The Universality-Diversity Dichotomy and Cultural Relativism

The Strasbourg Court offers substantial discretion to national authorities in cases that exclusively relate to public morality concerns. However, public morality is a very diffuse and accordingly complicated justification ground.¹³¹ The challenge for the ECtHR is to accommodate cultural, religious and moral differences while avoiding that this justification ground is arbitrarily abused. As noted earlier, the doctrine of the margin of appreciation and the principle of subsidiarity are in a relationship of lex specialis and lex generalis,¹³² with the principle of subsidiarity showing a more comprehensive character and addressing the universality-diversity dichotomy more broadly.¹³³ What does this dichotomy consist of? Human rights are supposed to be of universal validity, as they are assumed to be inherent to a person’s existence. However, there are substantial cultural differences between different countries and regions. Ultimately, the dichotomy relates to the question of the manner in which universal human rights can and should be applied in a culturally diverse world.

A broader perspective shows that the dichotomy is not limited to human rights. In the EU and the EEA, the corresponding principles are the ‘universally’ applicable fundamental freedoms. Here, cultural diversity is a challenge to the homogenous nature of the Internal Market. Likewise, the dichotomy also arises before the WTO judiciary, even though the panels and Appellate Body apply a more contractual interpretation rather than a ‘constitutional’ balancing exercise. This finds expression in a methodology of the WTO judiciary that is dominated by a grammatical interpretation.¹³⁴

In sum, the dichotomy represents a double-edged challenge to an international judicial mechanism. If the cultural diversity is not taken into account, the respective court risks having its acceptance hampered. If the argument of cultural diversity is granted too much weight, the universality of the ‘principles’, that is, human rights or fundamental freedoms, is at risk. Resorting to ‘cultural relativism’ can therefore water down these guarantees and subject them to arbitrary determinations.¹³⁵ The challenge of cultural relativism is best seen in cases involving morality concerns. The approach of the ECtHR to deal differently with cases that exclusively regard moral questions compared to others where morality is only one of the justification grounds seems an appropriate answer to the challenge. The approach also reminds of the earlier described twofold model, which distinguishes between core cases of morality and cases of mere disapproval of detrimental side effects (see Sect. 7.3).

4 Summarising the Principles and Criteria and Double-Checking Them in Gambling Cases Before the European Court of Human Rights

The two previous sections have elaborated the principles and criteria that steer the Strasbourg Court’s use of the margin of appreciation. The identified principles and criteria are briefly summarised before their application is double-checked with the rare cases before the ECtHR that involved games of chance.

4.1 General Principles

The margin of appreciation is always embedded in the broader process of judicial scrutiny. Irrespective of the extent of the margin granted, the aim and the proportionality of the national restrictions are always carefully reviewed. If the motivation of the national decision is not convincing and consistent, the ECtHR no longer feels bound to the margin of appreciation a priori granted and is inclined to impose its own balancing of interests. The margin of appreciation is further informed by the importance of the Convention right (for instance, certain aspects of private life) and the special nature of the justification ground (for instance, morality).

4.2 Criteria Regarding Crime, Health and Public Morality

It was analysed whether the ECtHR grants a somewhat wider margin of appreciation in relation to the justification grounds relevant in the gambling case law. The practice is relatively easy to observe since the ECtHR has been very explicit about its use of the doctrine in relation to crime (prevention), health and public morality and has offered a detailed catalogue of criteria. The Court of Justice is often less explicit about its use of the doctrine, partly due to the different and shorter drafting style of the judgments. Nevertheless, the literature identified criteria of the Court of Justice, which are often reminiscent of those of the Strasbourg Court.¹³⁶

4.2.1 Crime

Within the category of crime in the large sense, one situation clearly stands out: public emergency cases under Article 15. Such situations are characterised by the time factor urgency and the severity of the threat. This particular combination of factors that are challenging to any government justifies in the ECtHR’s view a wide margin of appreciation. Nevertheless, the ECtHR reviews the aim and proportionality in these cases too.

There are two more categories of concerns that may be summarised under prevention of crime, which in the past profited from a wide margin (even though not as wide as in emergency cases): national security and terrorism. This is coherent in that situations relating to these concerns may involve the two aforementioned characteristic elements of urgency and severity. In more recent years, the Court has nonetheless narrowed down the margin in these situations. If national security is not the sole ground on which the ruling is based, the margin is further narrowed down. In relation to all other forms of crime — and consequently those forms of crime of relevance in the gambling cases (fraud, money laundering) — the ECtHR does generally not mention the doctrine and does not grant a particular margin of appreciation.

4.2.2 Health

Most cases touching upon health concerns before the ECtHR relate to enforced childcare by the state and the deprivation of freedom of persons of unsound mind. In regards to the former, the ECtHR proceeds to a careful weighing of all interests. It is in particular not enough to merely consider that the child would be better off if placed in care. Permanent or absolute restrictions can hardly ever be justified. The ECtHR only grants wide discretion for the initial decision of placing the child in public care. Mere administrative burdens are not seen as primarily relevant considerations.

Regarding the detention of persons of unsound mind, the time factor of urgency is again decisive to grant authorities wide discretion for the decision of the initial detention. The term ‘unsound mind’ is interpreted strictly. By contrast, the margin is narrowed down for the question of keeping the person in detention. In particular, the consistency of the effectively practised policy is closely reviewed. Programmes and institutions need to be suitable, from a medical perspective, to address the person’s mental health problem by ensuring adequate therapeutic and recreational programmes as well as contact with the outside world.

Medical research, empirical evidence, best practice and professionalism play a central role in the considerations of the Strasbourg Court. The ECtHR sees these points as effective safeguards against arbitrariness and the abuse of the derogation for other purposes. The Court demands that the constantly evolving best international science is relied on. Nonetheless, it grants so-called medical discretion: in principle, it is for the medical authorities to decide the therapeutic methods. Similarly, the ECtHR grants some discretion to authorities when complex facts must be assessed and balanced as local authorities are usually better placed to strike a fair balance.

The ECtHR imposes on both public authorities and medical personal high professional quality standards. This includes the duty to carefully observe the development of a disease and to keep careful record. Finally, the ECtHR demands strict judicial control where the executive has far-reaching discretionary powers. Overall, the ECtHR does not grant a particular margin of appreciation in relation to health concerns.

4.2.3 Public Morality

For good reasons, the Strasbourg Court grants wide discretion in relation to public morality issues. Views on moral questions are necessarily subjective and hard to objectivise. The ECtHR reviews the aim and proportionality of the restrictions in these cases too. The policy of granting wide discretion experiences two limitations that serve as safeguards against the abuse of the public morality justification. First, the ECtHR grants wide discretion only if the facts of the case exclusively concern public morality and no other justification ground. This is reminiscent of the approach in relation to national security and emergency cases.¹³⁷ Second, a wide margin is no longer granted if a common European consensus can be identified among the Signatory States on this moral issue.

4.3 Double-Checking the Principles and Criteria in Gambling Cases

The present analysis of the use of the margin of appreciation has focused on the extensive case law of the ECtHR regarding the grounds of justification of crime, health and morality concerns. The ECtHR has rarely dealt with cases that involved the use of the margin of appreciation in relation to games of chance specifically. In the following, it will nevertheless be double-checked how the ECtHR used its principles and criteria in these cases as well.

Among the cases that appeared to be relevant for the present analysis,¹³⁸ it can be observed that most of them involved no margin of appreciation. Often, they related to gambling tax issues and aspects of fair trial under Article 6 ECHR.¹³⁹ Other cases included the question whether the Convention or domestic law granted a right to provide gambling services or to acquire gambling goods (see Sect. 11.3.1). The mere presence of games of chance did not trigger the ECtHR to apply a margin of appreciation, and even less, a wide margin of appreciation.

In the rare cases where discretion for domestic authorities was discussed, the use of the margin of appreciation was argued on other grounds. The decision in TIPP 24 AG v Germany regarded a German operator that offered online intermediation of betting. It had to cease its remaining activities as of January 2009 due to an online gambling ban introduced by a State Treaty between the German Länder. The ECtHR granted a wide margin of appreciation in this case. The discretion, however, was not argued with the presence of games of chance but the Convention rights concerned. The ECtHR noted that domestic authorities enjoyed wide discretion in striking a fair balance between public interest objectives and company property rights (Article 1, Protocol No 1) as well as freedom of speech in commercial matters (Article 10 ECHR).¹⁴⁰ The Court’s decision is in line with a much older decision of the Commission regarding the revocation of an Irish licence to operate amusement arcades (Article 1, Protocol No 1).¹⁴¹ Similar to the domestic practice of national courts, the ECtHR also applied a more lenient review as regards questions relating to classic exercise of administrative discretion, involving aspects of expediency or specialised expertise (see also environmental or planning matters).¹⁴²

The approach is perfectly consistent with the ECtHR’s general case law. Discretion involving questions of expediency or specialised expertise was noted in relation to ‘medical discretion’ or ‘complex factual assessments’ as well (see Sect. 8.3.2.3). The analysis further established general principles that apply irrespective of the justification ground. One principle is that the width of the margin of appreciation varies between different expressions of Convention rights (see Sect. 8.2.3). Examples of particularly important expressions where hardly any margin of appreciation can apply include for instance core aspects of private sphere as well as political debate.¹⁴³ It was noted that expressions of lesser importance included for instance the rights of coalitions under Article 11;¹⁴⁴ the same applies to company property rights and commercial speech (advertising).

5 The Margin of Appreciation in the Gambling Case Law of the Court of Justice of the EU

This section discusses the use of the margin of appreciation in the case law on gambling. First, the development of the practice of the margin of appreciation before the Court of Justice is outlined. In the next stage, the practice is compared with the use of the margin of appreciation by the EFTA Court. Finally, these approaches are contrasted with the principles and criteria established in the previous section in relation to the doctrine as applied by the ECtHR (Sect. 8.5.5). Section 8.5 solely examines the overall use of the margin of appreciation in the gambling cases. A detailed analysis of the proportionality review is reserved for the subsequent Chap. 9.

5.1 Early Case Law: Unlimited Margin of Appreciation

In its early case law in Schindler,¹⁴⁵ Läärä,¹⁴⁶ Zenatti ¹⁴⁷ and Anomar,¹⁴⁸ the Court of Justice practised a virtually unlimited margin of appreciation and did de facto not review the proportionality of the measures.

The first case, Schindler, concerned the UK legislation on lotteries that banned large-scale lotteries at the time. The Court of Justice granted an unlimited margin of appreciation due to the ‘peculiar nature’ of lotteries that it noted. The peculiar nature was concluded from the following elements: lotteries like other types of gambling involved moral, religious or cultural aspects. They further involved a high risk of crime or fraud. They also incited people to spend, which could have damaging individual and social consequences. It was not without relevance that lotteries were used to finance benevolent or public interest activities.¹⁴⁹

Those particular factors justify national authorities having a sufficient degree of latitude to determine what is required to protect the players and, more generally, in the light of the specific social and cultural features of each Member State, to maintain order in society, as regards the manner in which lotteries are operated, the size of the stakes, and the allocation of the profits they yield. In those circumstances, it is for them to assess not only whether it is necessary to restrict the activities of lotteries but also whether they should be prohibited, provided that those restrictions are not discriminatory.¹⁵⁰

The Court of Justice continued the policy of an unlimited margin of appreciation in Läärä. This case was significantly different in that the relevant gambling services (slot machines) were not banned, but the right to offer such games was reserved to a state operator. The Court revisited what it had referred to in Schindler as “a sufficient degree of latitude:”

However, the power to determine the extent of the protection to be afforded by a Member State on its territory with regard to lotteries and other forms of gambling forms part of the national authorities’ power of assessment […]. It is for those authorities to assess whether it is necessary, in the context of the aim pursued, totally or partially to prohibit activities of that kind or merely to restrict them and, to that end, to establish control mechanisms, which may be more or less strict. In those circumstances, the mere fact that a Member State has opted for a system of protection which differs from that adopted by another Member State cannot affect the assessment of the need for, and proportionality of, the provisions enacted to that end. Those provisions must be assessed solely by reference to the objectives pursued by the national authorities of the Member State concerned and the level of protection which they are intended to provide.¹⁵¹

The question whether, in order to achieve those objectives, it would be preferable, rather than granting an exclusive operating right to the licensed public body, to adopt regulations imposing the necessary code of conduct on the operators concerned is a matter to be assessed by the Member States.¹⁵²

The approach of the Court in Schindler and Läärä was remarkable in that it significantly differed from its general practice. Under the preliminary ruling procedure of Article 267 TFEU, the Court is called to offer guidance to the referring court. As Advocate General La Pergola noted in Läärä, the Court is required

to reach an interpretation of [Union] law which gives the national court as complete and useful guidance as possible.¹⁵³

The Court of Justice usually discusses the proportionality of the measure. Sometimes, it then decides itself whether the measures were proportionate. Often, it will leave it to the referring court to answer this question while providing criteria that are aimed to guide the national court’s decision on this point.¹⁵⁴

The decisions in Schindler and Läärä are very different in this regard. The Court granted an unlimited margin of appreciation, therefore giving Member States a ‘carte blanche’ in this area of law. It did not proceed to a discussion of the proportionality of the measures. It concluded itself in both cases that the measures were proportionate and did not leave the answer to that question to the referring court.

The next two cases did not significantly change that picture. The Zenatti ruling confirmed the wide discretion enjoyed by the Member States. However, Advocate General Fennelly had pointed at inconsistencies in the Italian gambling regime and the Court of Justice took up this point:

However, as the Advocate General observes […], such a limitation is acceptable only if, from the outset, it reflects a concern to bring about a genuine diminution in gambling opportunities and if the financing of social activities through a levy on the proceeds of authorised games constitutes only an incidental beneficial consequence and not the real justification for the restrictive policy adopted.¹⁵⁵

This remained an isolated statement. The Court of Justice did not engage in a more detailed discussion of this point nor did it hold the Italian measures disproportionate. It had expressly held the measures to be proportionate in Schindler and Läärä. In Zenatti, it left it to the national court to verify

whether […] the national legislation is genuinely directed to realising the objectives which are capable of justifying it and whether the restrictions which it imposes do not appear disproportionate in the light of those objectives.¹⁵⁶

In Anomar, the Court found the Portuguese legislation to be similar to the Finnish legislation as discussed in Läärä. It limited its ruling for large parts to simply referring to the unlimited discretion of national authorities. The Advocate General noted that the Court of Justice had substantially relaxed the principle of proportionality in Läärä, “which normally applies to implementation of the provisions of the freedom to provide services.”¹⁵⁷ The Court’s reference to the principle of proportionality remained rhetoric. It neither engaged in a proportionality test nor did it instruct the national court to further look at this point:

the Court has held that national measures which restrict the freedom to provide services […] must, nevertheless, be such as to guarantee the achievement of the intended aim and must not go beyond what is necessary in order to achieve it […].

Nonetheless, it is a matter for the national authorities alone, in the context of their power of assessment, to define the objectives which they intend to protect, to determine the means which they consider most suited to achieve them and to establish rules for the operation and playing of games, which may be more or less strict […] and which have been deemed compatible with the Treaty.

[…] the choice of methods for organising and controlling the operation and playing of games of chance or gambling, such as the conclusion with the State of an administrative licensing contract or the restriction of the operation and playing of certain games to places duly licensed for that purpose, falls within the margin of discretion which the national authorities enjoy.¹⁵⁸

5.2 Gambelli and Lindman: Limitation of the Margin of Appreciation

Within one week, the Court of Justice handed down the decisions in Gambelli ¹⁵⁹ and Lindman.¹⁶⁰ It was the first time that a significant change was applied in the use of the margin of appreciation. Hatzopoulos and Do concluded that these decisions brought an end to the Court of Justice’s tendency to turn a blind eye to protectionist justifications in the field of gambling.¹⁶¹ According to the Court in Gambelli, national measures could only be suitable if they were “consistent and systematic.” If national authorities incited and encouraged consumers to participate in gambling primarily in view of the financial benefit for the public purse, they could not invoke public order concerns.

Gambelli was the first decision to contain some element of proportionality review. More precisely, it discussed the suitability of the measures. The referring Italian court had noted that Italy practised a policy of expansion of games of chance, while claiming a goal of limiting gambling opportunities. In this case, the Court could hardly avoid being outspoken. Inconsistencies of the Italian gambling regime had already been critically noted by Advocate General Fenelly in Zenatti and Advocate General Alber in Gambelli.

In so far as the authorities of a Member State incite and encourage consumers to participate in lotteries, games of chance and betting to the financial benefit of the public purse, the authorities of that State cannot invoke public order concerns relating to the need to reduce opportunities for betting in order to justify measures such as those at issue in the main proceedings.¹⁶²

The Court of Justice also gave some guidance regarding the compatibility of the Italian tender licensing procedure with Union law and as regards the proportionality of the criminal penalties imposed on unlicensed operators. The Court’s decision even seemed to leave the door somehow open for a certain degree of mutual recognition of licences.¹⁶³ Gambelli differed significantly in that the Court for the first time engaged in a discussion of the referred questions. The Court of Justice left it ultimately to the national court to decide whether the Italian legislation “actually serves the aims which might justify it, and whether the restrictions it imposes are disproportionate in the light of those aims.”¹⁶⁴

As opposed to Gambelli, the decision in Lindman ¹⁶⁵ received little attention in the literature and with the interested stakeholders. This is because it was handed down only one week after Gambelli and the latter was seen as a major step in the case law on gambling. Also, the facts of the case concerned rather straightforward discriminatory measures. Lottery revenues with foreign lotteries were subject to taxation while revenues from Finnish lotteries were not. Notable was not the outcome of the ruling but an interesting obiter dictum.¹⁶⁶ The Court stated that the case file did not disclose any statistical or other evidence on the gravity of the risks connected to playing games of chance. Since the Court added this criterion without any need to do so, it suggested that authorities needed to provide empirical evidence when arguing gambling-related risks. Hereby, the Court not only underlined the burden of proof, which was with the Member State, but also suggested that empirical evidence and accordingly a scientific perspective on gambling-related risks could take a central role in future cases.

5.3 Subsequent Case Law: A Mixed Picture

The decisions in Gambelli and Lindman held the potential to significantly change the direction of the case law. For the first time, the margin of appreciation had been limited. Under the suitability test, a consistent and systematic policy had been demanded. Moreover, the Court had pointed at the role of evidence in relation to gambling-related risks.

However, the post-Lindman decisions show a mixed picture with regard to the use of the margin of appreciation. Decisions with an approach seemingly similar to that in Gambelli, for instance Placanica,¹⁶⁷ altered with other decisions whose standard of review was reminiscent of the early case law, for instance Liga Portuguesa.¹⁶⁸

Chapter 9 will closely assess the other side of the coin: the proportionality review.¹⁶⁹ Overall, it can already be noted that the margin of appreciation in the gambling cases remained very wide in the post-Gambelli decisions. The Court of Justice largely stuck to the special use of the margin of appreciation specific to games of chance.¹⁷⁰ This overall view must, however, be split in different aspects: the use of the margin as well as the corresponding proportionality review vary between different aspects. In general terms, the practice of the Court since Placanica ¹⁷¹ can be summarised as follows.

There are some aspects for which Member States enjoy unlimited discretion. This is the case for the desired protection level against gambling-related risks, such as gambling addiction and various forms of crime. In principle, Member States are furthermore free in their choice of the regulatory licensing model. A Member State can prohibit gambling offers or allow them. If it decides to legalise them, it enjoys almost unlimited discretion with regard to the regulatory model. It can install an exclusive right holder with public or private ownership, a tightly or more liberally regulated licensing model or even a model that does not require an authorisation. Member States can allow some games while prohibiting others (for example, online games); they can regulate some types of games more strictly than others. Ultimately, it is up to the Member States’ discretion whether they want to recognise the standards ensured by regulation and surveillance in other Member States.

For other aspects of games of chance or under certain conditions, this unlimited margin of appreciation may be narrowed. The Court narrows the margin of appreciation where inconsistencies become obvious in the national policy on games of chance. Where governments allow their own operators(s) to significantly expand or heavily advertise their offers while claiming public policy concerns like gambling-related crime, the Court of Justice no longer feels bound to the very wide margin of appreciation. Similarly, the Court of Justice held in recent decisions such as Zeturf or Dickinger & Ömer that gambling monopolies could only be justified in relation to a particularly high level of consumer protection. The Court appeared to narrow the margin of appreciation where the justification ground related to crime concerns rather than gambling addiction concerns (namely, addiction concerns relating to online gambling). The Court of Justice still grants very wide discretion when it comes to games of chance played via the Internet.

The margin of appreciation is small in relation to licensing procedures. If the Member State does not opt for an exclusive right holder, the Court reviews the national measures much more closely. The duties of transparency and non-discrimination play a central role in this context. Similarly, where a licensing system involves restrictions to prevent forms of crime, such as seat requirements for companies or a ban on stock-registered companies, the margin of appreciation becomes small.

Overall, the Court of Justice has still applied a wide margin of appreciation in the case law since Placanica. Some aspects enjoy an unlimited or hardly limited margin of appreciation while others are granted a narrower margin. In more recent cases, however, a relativisation of the wide margin of appreciation and occasionally a change of tonality could be observed, including in Markus Stoss, Zeturf, Dickinger & Ömer and Costa & Cifone.

5.4 EFTA Court

The EFTA Court dealt in two cases with gambling services, one direct action¹⁷² and one advisory opinion.¹⁷³ The direct action concerned the compatibility of the Norwegian nationalisation of the gaming machine market; the advisory opinion related to all other forms of games of chance in Norway.

In relation to the use of the margin of appreciation, the EFTA Court quoted the Court of Justice with the latter’s statement that gambling involved cultural, religious and moral aspects and harmful consequences.¹⁷⁴ The EFTA Court also granted a certain margin of appreciation to national authorities:

Moral, religious and cultural factors, as well as the morally and financially harmful consequences for the individual and for society associated with gaming, may serve to justify a margin of discretion for the national authorities, sufficient to enable them to determine what is required in order to ensure consumer protection and the preservation of public order. The EEA Contracting Parties are free to set the objectives of their policy on gaming and, where appropriate, to define in detail the level of protection sought. However, the restrictive measures they impose must satisfy the conditions laid down in the case law of both the Court and the Court of Justice of the European [Union] as regards their proportionality […]. In that respect, the burden of proof is on the State responsible for the restriction.¹⁷⁵

As will be shown in more detail in Chap. 9, the EFTA Court combined the margin of appreciation with an effective proportionality review.¹⁷⁶ In the direct action procedure, a somehow stricter review could be expected for procedural reasons. In this procedure, the EFTA Court was not only handing down an interpretation of EEA law, it was in the possession of all facts and under the legal obligation to decide on the merits of the case. Interestingly, the EFTA Court applied a stricter standard of review in the advisory opinion.¹⁷⁷ That ruling took a close look at potential inconsistencies and offered substantial guidance to the referring Norwegian court.

In EFTA-Ladbrokes, the EFTA Court made an express statement in relation to the extent of the margin of appreciation. The agents for the Norwegian government had pleaded that judicial review was limited in the area of gambling. The courts could assess the necessity of the measures only if they had reasons to believe that the national provisions were discriminatory or protectionist.¹⁷⁸ Similarly, in ESA versus Norway, the government position had been that it was only for the national authorities to assess the necessity, notwithstanding the fact that this was a direct action case.¹⁷⁹ The EFTA Court commented in detail on the use of the margin of appreciation in the area of gambling:

This cannot be accepted. Even though the Contracting Parties do have discretion in setting the level of protection in the field of gambling, this does not mean that the measures are sheltered from judicial review as to their necessity […].

To the extent the legislation at issue is deemed suitable, it must be assessed whether the measures at issue go beyond what is necessary to meet the aims pursued. As with regard to suitability, the necessity of the measures must, at the outset, be assessed in relation to each legitimate objective. […]

The necessity test consists in an assessment of whether the exclusive rights system is functionally needed in order to achieve the legitimate objectives of the legislation at the level of protection chosen by the Contracting Party concerned, or whether this could equally well be obtained through other, less restrictive means […]. Thus, where other, less restrictive measures would have the effect of fully achieving the objectives at the level of protection chosen, an exclusive rights system could not be considered necessary simply because it might offer an even higher level of protection.”¹⁸⁰

In contrast to the approach of the Court of Justice, the EFTA Court underlined that it needed to be shown that a regulatory model such as a monopoly was functionally needed to achieve a certain objective.¹⁸¹ It also referred to “other, less restrictive means,” the characteristic test behind the notion ‘necessity’, which the Court of Justice has normally avoided to mention.¹⁸²

The guidance offered by the EFTA Court in EFTA-Ladbrokes was much more substantial than in the gambling case law of the Court of Justice at that time. This could be particularly well observed in relation to the criterion of a consistent and systematic policy and the protection level that was sought in practice:

The restrictions placed on the monopoly provider must be taken into account when identifying the level of protection actually sought by Norwegian authorities under the current exclusive rights system. A low level of protection exists if the Norwegian authorities tolerate high numbers of gaming opportunities and a high level of gaming activity. Important factors in this regard are restrictions on how often per week or per day games are on offer, restrictions on the number of outlets which offer games of chance and on sales and marketing activities of the outlets, as well as restrictions on advertising and on development of new games from Norsk Tipping.

With regard to marketing, several factors have to be taken into account by the national court. In particular, it will have to look into the extent and effect of marketing and development of games of chance, inter alia how much Norsk Tipping spends in that regard as well as the form and content of the marketing and the susceptibility of the targeted groups. Moreover, the national court must ascertain whether the advertising of the gambling and betting services is rather informative than evocative in nature.

In its assessment of necessity the national court will have to examine, in particular, whether Norsk Tipping has less economic incentives to breach the rules regulating the sector of games of chance or less of an interest in an aggressive marketing strategy than a commercial operator under a licensing system. Furthermore, the national court will have to evaluate whether effective control may be exercised and is actually being exercised by the State on Norsk Tipping and whether private service providers operating under a licensing system cannot be subjected to the same kind of control.¹⁸³

It follows that the margin of appreciation applied by the EFTA Court in the area of gambling differed, overall, from that practised by the Court of Justice. For some aspects, the margin of appreciation was narrower, and the proportionality of the measures was generally more closely reviewed.

5.5 Principles and Criteria from the European Court of Human Rights Applied to the Gambling Case Law of the Court of Justice of the EU

5.5.1 General Considerations

Sections 8.2, 8.3 and 8.4 established the principles and criteria that the Strasbourg Court has followed in its use of the margin of appreciation. They serve to avoid an arbitrary and incoherent use of the doctrine. It is now examined whether these principles and criteria support the width of the margin of appreciation as practised by the Court of Justice in its gambling jurisprudence. The established overriding principles of the ECtHR relate to the motivation of the decision, the importance of the right concerned and the possible existence of a special nature of the justification ground.

The fundamental freedoms form part of the essential principles of the Single Market and are of central importance. Absolute, permanent or otherwise far-reaching restrictions are generally strictly reviewed and seldom approved. The Court of Justice went as far as to define EU fundamental freedoms as supreme to fundamental rights protected under national constitutional law.¹⁸⁴ Even though that position was later relativised by the development of EU fundamental rights in the case law,¹⁸⁵ the protection of the fundamental freedoms certainly enjoys utmost importance within the process of European integration.

The next overriding principle concerns the possible existence of a special nature of the justification ground. The ECtHR only recognises this in relation to a few grounds. In this context, it is noteworthy that the Court of Justice since Schindler has referred to gambling services as showing a peculiar nature. According to the Court, there were “particular factors” that justified a “sufficient degree of latitude.”¹⁸⁶ These factors were threefold and regarded “moral, religious or cultural aspects of gambling,” “high risk of crime or fraud” and “damaging individual and social consequences.”¹⁸⁷ The Court of Justice summarised various concerns under two main justification grounds in the gambling cases: consumer protection and the maintenance of order in society. The concerns behind these grounds relate to health issues (gambling addiction), the prevention of crime and public morality.

It must be assessed whether these concerns are of a special nature. According to the jurisprudence of the ECtHR, the former concerns, namely health and crime, do not show a special nature that would a priori justify a wide margin of appreciation. With regard to public morality, this may be different. In the following, the criteria in relation to these three concerns are briefly revisited and applied to the situation of the gambling jurisprudence.

5.5.2 Crime Concerns

While certain forms of crime (in the broadest sense) profit or may profit from a wide margin of appreciation (public emergencies; to a lesser extent national security and prevention of terrorism), other forms of crime do not. Two characteristic elements justify a wide margin of appreciation: the time factor (urgency) and the severity of the threat. These two factors are typical for public emergency cases and may also be present in constellations regarding national security or terrorism. By contrast, the forms of crime commonly referred to in the gambling jurisprudence are fraud and money laundering. Particular urgency and severity are not characteristic for policies relating to these two forms of crime. They do not show a special nature that would justify a wide margin of appreciation.

5.5.3 Health Concerns

The jurisprudence of the ECtHR in relation to the well-being and health of persons shows that very restrictive measures, such as permanent or absolute measures, are hard to argue on health grounds. Situations where health concerns justify a wide margin of appreciation involve an element of urgency and severity: the initial decision to put a child in public care when serious mental or physical harm is imminent or the initial placement of a mentally unsound person in an institution when the person may harm himself or others.

No particular margin is granted for other situations that do not involve those characteristic features of urgency and severity. Yet, the ECtHR grants what is referred to as ‘medical discretion’. Medical authorities enjoy wide discretion in deciding upon the therapeutic methods. Where state authorities have to weigh complex facts, some degree of discretion is granted too.

The Court of Justice has repeatedly dealt with gambling and the addiction to games of chance as showing a peculiar nature. As to the addiction to gambling, it still needs to be inquired whether this disorder effectively shows a peculiar nature (see Sect. 9.1.1). So far, the considerations regarding the criteria in relation to health do not justify a wide margin of appreciation in the gambling case law – except if a peculiar nature of gambling addiction were to be discovered in the following chapter. Apart from this caveat, gambling addiction concerns do not generally involve the factors of urgency and severity. It was previously noted that addiction to games of chance is an old and well-known phenomenon. The severity of this disorder will be studied in Sect. 9.1.2.2.

Important is the notion of medical discretion. Under certain conditions, there are good reasons to offer wide discretion to medical experts and national authorities when assessing scientific findings and medical options. This discretion is subject to criteria that will be closely assessed in the next chapter on the practice of the proportionality review.

5.5.4 Public Morality Concerns

Public morality concerns have been pleaded in the gambling cases. Among the three group of concerns assessed here, this is the sole justification ground seen by the Strasbourg Court as showing a special nature; this could justify a wide margin of appreciation. The specificity of this ground is that issues of morality can hardly be assessed in an objective way. Moral views are subjective and vary by culture, time, geography and religion.

This general policy of granting a wide margin knows two limitations that serve as safeguards against the abuse of the public morality justification. The ECtHR grants wide discretion only if the facts of the case exclusively concern public morality and no other justification ground; in the language of the earlier presented twofold model: core cases of morality. Furthermore, no wide margin applies if there is a broad consensus as regards this issue of morality.

In regard to the first limitation, it is clear from the outset that the gambling cases do not exclusively involve public morality concerns. The main concerns repeatedly argued by the parties, the Advocates General and the Court of Justice as well as the EFTA Court relate to gambling addiction and crime concerns. Section 7.3 inquired whether gambling-related risks were an issue for public morality. While the Court of Justice did indeed use language that occasionally left the impression that gambling-related risks were primarily a moral issue,¹⁸⁸ it was concluded that science was better suited to inform policies in relation to these risks. The auxiliary role of moral concerns regarding gambling was illustrated in a model consisting of two categories of public morality concerns. Concerns about gambling relate to potential detrimental side effects but not to the activity as such. Gambling does not constitute one of the core cases of morality to which the wide discretion of the ECtHR would apply. Consequently, the wide margin of appreciation granted by the Court of Justice in the gambling jurisprudence does not find support in the criteria relating to public morality concerns.

5.5.5 Results

The wide margin of appreciation, and for some aspects even unlimited margin, which the Court of Justice has applied in the case law on gambling, is not supported by the doctrine on the margin of appreciation as practised by the ECtHR. The criteria that steer the use of the margin of appreciation do not support the view that gambling is (primarily) a matter for public morality. The urgency and severity factors that are sometimes identified in relation to certain crime and health concerns are also not present. It remains to be assessed whether Chap. 9 will establish a peculiar nature of gambling that – according to the criteria of the ECtHR – could justify a wide margin of appreciation.

The use of the margin of appreciation by the EFTA Court finds more support in the criteria of the ECtHR. While the EFTA Court did a priori grant some discretion to national authorities, it combined it with an effective proportionality review. It offered substantial guidance to national courts by outlining, in quite some detail, the meaning of certain criteria, such as ‘consistent and systematic policy’. As a result, the EFTA Court gave the discretion enjoyed by national authorities primarily in the hands of the national courts (see Sect. 8.5.4). These aspects will be more closely analysed in the following chapter.