International Law

Commission v Spain Gambling Case

By Karl-Friedrich Lenz

The first chamber of the European Court of Justice handed down a judgment on October 6th that gives a rather different impression compared to that of the Grand Chamber in the BWin case I discussed here recently.

In the new case, the Commission sued Spain because lottery winnings are exempted from income tax only in case the lottery operator is based in Spain. The Court ruled that this is discriminatory. Operators that pursue charitable activities must be exempted in an equal way, whereever they are established.

Especially noteworthy is the reasoning at paragraph 39:

It need merely be pointed out in that respect that, as is apparent from the Court?s case-law, it is not justifiable for the authorities of a Member State to assume, in a general way and without distinction, that bodies and entities established in another Member State are engaging in criminal activity.

That is in contrast to the idea of the BWin case that operators may be assumed to operate fraudulently just because they are established in another Member State and use the Internet to communicate with their customers.

I am pleased to note that the Internal Market is not completely dead in the sector, even after the BWin case.

Full post as published by Lenz Blog on October 11, 2009 (boomark / email).