THIRD SECTION
DECISION
AS TO THE ADMISSIBILITY OF
Application no. 27968/05
by LADBROKES WORLDWIDE BETTING
against Sweden
The European Court of Human Rights (Third Section), sitting on 6 May 2008 as a Chamber composed of:
Josep Casadevall, President,
Boštjan M. Zupančič,
Alvina Gyulumyan,
Egbert Myjer,
Ineta Ziemele,
Päivi Hirvelä,
Luis López Guerra, judges,
and Santiago Quesada, Section Registrar,
Having regard to the above application lodged on 21 July 2005,
Having regard to the decision to apply Article 29 § 3 of the Convention and examine the admissibility and merits of the case together,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having regard to the decision of the United Kingdom Government not to intervene in the proceedings in accordance with Article 36 § 1 of the Convention,
Having regard to the fact that Elisabet Fura-Sandström, the judge elected in respect of Sweden, withdrew from sitting in the case (Rule 28 of the Rules of Court) and that the respondent Government accordingly appointed Päivi Hirvelä, the judge elected in respect of Finland, to sit as judge (Rule 29),
Having deliberated, decides as follows:
THE FACTS
The applicant, Ladbrokes Worldwide Betting, is a betting and gaming company based in Harrow, United Kingdom. It is represented before the Court by Mr S. Widmark and Ms T. Cabander, lawyers practising in Stockholm. The Swedish Government (“the Government”) were represented by their Agent, Ms I. Kalmerborn, Ministry for Foreign Affairs.
A. The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
On 11 December 2003 the applicant applied to the Government, under section 45 of the Lotteries Act (Lotterilagen, 1994:1000), for a permit to provide betting and gaming services in Sweden.
By a decision of 18 March 2004, the Government rejected the application. The decision, prepared by the Ministry of Finance in consultation with the Prime Minister’s Office (Statsrådsberedningen) and several other ministries, was signed by Mr Bosse Ringholm, the Minister for Finance, on behalf of the Government. The Government noted that betting and gaming in Sweden was essentially reserved for the State, certain non-profit making organisations (folkrörelserna) and the equestrian sports, and that the profits should be to the benefit of the public or for public utility purposes. They did not find that there were reasons to deviate from those principles and grant a permit to the applicant by way of an exception under section 45.
On 16 June 2004 the applicant applied to the Supreme Administrative Court (Regeringsrätten) for a judicial review of the Government’s decision under the Act on Judicial Review of Certain Administrative Decisions (Lagen om rättsprövning av vissa förvaltningsbeslut, 1988:205). The applicant claimed that the impugned decision should be quashed as it was contrary to Articles 43 and 49 of the EC Treaty, the latter guaranteeing the free movement of services. It also requested the court to hold an oral hearing.
On 8 December 2004 the Supreme Administrative Court, sitting with five judges, decided not to hold a hearing in the case.
Stating that three of the judges had previously, at the Ministry of Finance and the Court of Justice of the European Communities, dealt with the question whether the Lotteries Act was in conformity with Community law, the applicant, on 19 January 2005, challenged their impartiality and moved for their disqualification from the case. One of the challenged judges was later replaced and, before the Court in the instant proceedings, the applicant stated that it had been clarified that there were no grounds to question the impartiality of another judge. Of relevance to the present case is thus only the alleged partiality of one of the judges, Mr Nils Dexe. The applicant stated in its plea for disqualification that he had been Director-General for Administrative and Legal Affairs (expeditions- och rättschef) in the Ministry of Finance between 1992 and 2001, when he had allegedly been responsible for the preparation and enactment of the Lotteries Act as well as a new rule which criminalised violations of that Act’s prohibition on the promotion of foreign lotteries. Within the scope of that work, the question whether Swedish lottery legislation was contrary to EU law had been investigated, leading to the Ministry taking the view that it was not.
It is true that Mr Dexe held the above-mentioned position in the Ministry of Finance between 1992 and 2001. However, responsibility for the Lotteries Act was transferred to that ministry only on 1 July 1996, about three years after it had been prepared. The new rule on criminalisation was, however, elaborated and introduced during Mr Dexe’s period of service within the Ministry of Finance. In its proposal for introducing, inter alia, this rule, the Government investigated its conformity with EU law. The decision to propose the amendment was taken by 14 ministers of the Government, none of whom was Mr Ringholm, at a Government meeting held on 29 October 1998. Mr Ringholm was Minister for Finance between 1999 and 2004. Previously, he had not been a member of the Government or employed in the Government offices.
On 4 February 2005 the Supreme Administrative Court, sitting without the challenged judges, rejected the applicant’s plea for disqualification. It stated the following:
“Decisions concerning Government bills are political decisions. Being a civil servant and not a political appointee, the Director-General for Legal Affairs at a Government Ministry has no decisive influence on the contents of the proposals that the Government presents. Consequently, the contents of a Government bill do not reflect the personal opinion of the Director-General for Legal Affairs on a legal issue; indeed, his opinion may differ from that of the Government. Accordingly, the duty of the Director-General for Legal Affairs to see to the drafting of legislative proposals, on the basis of positions taken by politicians, cannot be held to mean that he has thereby concerned himself with the matter in a manner that could provide grounds for disqualification when dealing with cases relating to the application of the legislation. In light of these considerations, the Supreme Administrative Court finds that Nils Dexe’s previous employment as Director-General for Administrative and Legal Affairs at the Ministry of Finance does not constitute a circumstance that entails disqualification in the case. Nor has any other circumstance come to light that disqualifies Nils Dexe. The objection that he is disqualified must therefore be dismissed.”
On 15 February 2005 the Supreme Administrative Court altered its decision of 8 December 2004 and granted the applicant’s renewed request for an oral hearing. The hearing was held on 2 June 2005.
By a judgment of 20 June 2005, the Supreme Administrative Court, sitting with five judges, including Mr Dexe, upheld the Government’s decision. The court stated that, in a judgment of 26 October 2004 (RÅ 2004 ref. 95), it had already examined the conformity of the Swedish lottery legislation with EU law, as interpreted by the jurisprudence of the European Court of Justice, and considered that there were no reasons to come to a different conclusion in the applicant’s case. The court had noted in the earlier case that, as regards betting, the Court of Justice had accepted extensive restrictions on the freedom to provide services on the territory of other EU member states. The court had found therefore that the Swedish lottery legislation, which required a permit for essentially all forms of betting and gaming, and its main objectives, namely the protection of the individual and the public, and the principle that profits should benefit the public or be for public utility purposes, were acceptable to the Court of Justice. The court had further considered that the implementation of the lottery legislation met the requirements laid down by the Court of Justice for restrictions on the freedoms enshrined in the EC Treaty. Thus, while the court considered that the Government’s reasoning in the decision of 18 March 2004 could be seen as misleading and incomplete in light of the object and purpose of the Lotteries Act and the examination made by the court in the above-mentioned judgment, the challenged decision was contrary neither to the Lotteries Act nor to EC law as it had been developed thus far through the jurisprudence of the Court of Justice.
B. Relevant domestic and international law and practice
The Lotteries Act is applicable to lotteries, including betting, which are arranged for the general public.
Section 9 of the Act provides that, save for some exceptions not relevant to the present case, the organisation of betting and gaming requires a permit. Under section 15, a permit to arrange betting and gaming of the type provided by the applicant may be given to a Swedish non-profit making association which fulfils certain requirements, inter alia that it conducts activities whose main objective is to support public utility purposes within the country. If there are special reasons, a permit may be granted also to a legal person which is not a non-profit making association or to a legal person whose main objective is to support public utility purposes outside the country. Further conditions are laid down in section 16.
According to sections 39-41, applications for a permit to organise betting and gaming are determined by a municipal committee and, in some cases, the country administrative board and the National Gaming Board (Lotteriinspektionen).
The Government may grant a permit by virtue of section 45:
“The Government may grant a special permit to arrange a lottery in other cases and according to other procedures than as provided in this Act. ...”
The Government is thus authorised to grant a permit in situations where the requirements of section 15 are not fulfilled. The preparatory works mention the need to issue permits in specific situations. As examples of permits issued under section 45, reference is made to lotteries arranged by the savings banks in order to encourage savings and to the two companies wholly or partially controlled by the Swedish State, AB Svenska Spel and AB Trav och Galopp, which have obtained permits to arrange certain games, including sports and horse betting. The preparatory works do not provide any other directives on how to apply this provision (Government Bill 1993/94:182, pp. 79-80).
The Swedish lottery legislation’s compliance with EC law, notably Article 49 of the EC Treaty, is under investigation by the European Commission. On 27 June 2007 the Commission issued a reasoned opinion, the second step of the procedure laid down in Article 226 of the Treaty.
COMPLAINT
The applicant complained under Article 6 § 1 of the Convention that, due to Mr Dexe’s participation in the case, the Supreme Administrative Court could not be considered to have met the requirements of independence and impartiality. The applicant referred to what it had stated in its plea for disqualification to the Supreme Administrative Court. In addition, it submitted that, between 1997 and 2001, Mr Dexe’s superior had been the Minister for Finance, Mr Ringholm, who had taken the impugned Government decision of 18 March 2004. Moreover, in October 2004, Mr Dexe had participated in two other cases adjudicated by the Supreme Administrative Court, including the one referred to by the court in its judgment of 20 June 2005, in which the primary issue had been the same as in the applicant’s case of judicial review.
THE LAW
The applicant complained that the Supreme Administrative Court had not met the requirements of independence and impartiality under Article 6 § 1 of the Convention. In so far as relevant, this Article reads as follows:
“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal established by law.”
For Article 6 § 1 under its civil head to be applicable, there must be a dispute over a right which can be said, at least on arguable grounds, to be recognised under domestic law. The dispute must be genuine and serious. It may relate not only to the actual existence of a right but also to its scope and the manner of its exercise. The outcome of the proceedings must be directly decisive for the right in question (see, among other authorities, Frydlender v. France [GC], no. 30979/96, § 27, ECHR 2000-VII).
The respondent Government submitted that the application was incompatible ratione materiae, as the applicant did not have a right that could arguably be said to be recognised in domestic law. The Lotteries Act was a prohibitive legislation, the main purpose of which was to decrease the potentially harmful economic and social consequences of gambling and to ensure that the proceeds of games and lotteries promote objects of public benefit. In contrast to lottery and gaming permits issued by the National Gaming Board and other authorities and which were regulated in the Lotteries Act in a detailed and precise manner, there were no tangible criteria applicable to permits issued by the Government under section 45 of the Act. Instead, the applicant’s request for a permit to provide betting and gaming had been wholly dependent on whether the Government considered it appropriate or not. The Government’s discretion in these matters was therefore unfettered.
The applicant contested this view, maintaining that section 45 was the relevant provision for other applicants than non-profit making associations, thus implying, at least on arguable grounds, a right for such other applicants. Moreover, the Government’s discretion was not limited, as allegedly shown by its practice of granting permits to state-controlled gaming companies and to commercial banks. It was asserted that the Government’s practice had established certain criteria, or factors, which were decisive for the grant of permits under section 45, namely the status of the applicant, the nationality of the applicant, and the nature of the activity for which a permit was sought. The applicant contended that the reasoning of the impugned decision of the Government showed that a permit had been refused solely on the ground that the applicant was not based in Sweden. It further referred to the ongoing investigation by the European Commission as to the Swedish lottery legislation’s compliance with EC law.
As to whether a dispute over a right existed so as to attract the applicability of Article 6 § 1, the Court will first address the issue whether a right for the applicant to provide betting and gaming services could arguably be said to be recognised under Swedish law.
In view of the status of the Convention within the legal order of Sweden, the Court observes firstly that the Convention does not grant to individuals or companies the right to provide betting and gaming services. Such a right can be derived neither from Article 6 § 1 nor from any other provision of the Convention or its Protocols. It follows that the question whether such a right can be said to exist in any particular case must be answered solely with reference to domestic law.
In deciding whether a right, civil or otherwise, could arguably be said to be recognised by Swedish law, the Court must have regard to the wording of the relevant legal provisions and to the way in which these provisions are interpreted by the domestic authorities.
The Court reiterates that the provision of betting and gaming services is not free in Sweden. The Lotteries Act restricts this activity and makes it dependent on the grant of a permit. The main rule, section 15, provides that a permit may be given to a Swedish non-profit making association which fulfils certain requirements. Being neither a non-profit making association nor a Swedish subject, the applicant company could not have its application for a permit examined under that provision but only under the special rule laid down in section 45. According to the latter provision, the Government may grant a special permit in other cases and according to other procedures than those regulated elsewhere in the Act.
As can be seen from the impugned decision of the Government of 18 March 2004, it took into consideration that betting and gaming in Sweden was essentially reserved for the State, certain non-profit making organisations and the equestrian sports, and that the profits should be to the benefit of the public or for public utility purposes. The overall concern of protecting gamblers from harmful economic and social consequences, mentioned by the Supreme Administrative Court in its judgment of 20 June 2005 as a main objective of the restrictive legislation, may also have played a part in deciding on the applicant’s application. However, there is nothing in the Government’s decision which indicates that the private interests of the applicant were or should be of relevance to the examination of the application under section 45. The provision itself states that the Government may grant a permit, but does not specify how and when this power should be used. Furthermore, the preparatory works do not lay down any conditions in this respect. This is in stark contrast to sections 15 and 16, which stipulate specific requirements for a permit to be granted.
The applicant has claimed that it can be adduced from the Government’s practice that certain factors – the status and nationality of the applicant and the nature of the activity – are decisive for the grant of permits under section 45. However, even assuming that such factors can be derived from the very few examples of positive decisions taken under that provision, these are not concrete criteria that an applicant could rely on when requesting a permit. For example, even if the nature of an applicant’s activity could be of concern to the Government in examining an application under section 45, the Government’s practice does not give any direction as to what type of activity would qualify for a permit. Moreover, insofar as the nationality is of importance, the practice would rather indicate that the present applicant is excluded altogether.
The applicant has further referred to the ongoing investigation of whether the Swedish lottery legislation is in compliance with EC law, notably Article 49 of the EC Treaty. In this respect, the Court notes that those proceedings are still pending and that the outcome is thus not known. In any event, even if the proceedings would result in changes in the Swedish legislation, such changes will not have any bearing on the status of the Lotteries Act and the applicant’s possible rights under that Act at the relevant time, namely the dates of the decision and judgment in the case.
Having regard to the foregoing, the Court concludes that section 45 of the Lotteries Act confer on the Government a power to grant a permit to arrange lotteries whenever they consider it appropriate. The grant to a public authority of such a measure of, in practice unfettered, discretion clearly indicates that no actual right can be said to be recognised in law (see Masson and Van Zon v. the Netherlands, judgment of 28 September 1995, Series A no. 327, pp. 19-20, § 51, and Ankarcrona v. Sweden (dec.), no. 35718/97, p. 582, ECHR 2000-VI). In this context, the Court notes that the instant case manifestly differs from situations where a state has introduced an actual right which can be related to certain criteria, the existence of which can without particular difficulties be examined by the competent authorities and, subject to appeal, the national courts. It is clear that such rights fall within the scope of Article 6 § 1, whether they concern, for example, the right to social security and social assistance (see, for example, Feldbrugge v. the Netherlands, judgment of 29 May 1986, Series A no. 99), the right to a public service transport licence (Pudas v. Sweden, judgment of 27 October 1987, Series A no. 125-A), or the right to an alcoholic licence (Tre Traktörer AB v. Sweden, judgment of 7 July 1989, Series A no. 159).
Section 45 of the Lotteries Act contains no such applicable criteria, but leaves it to the discretion of the Government to decide whether a permit shall be granted or not. In no way is the situation or needs of the applicant in question decisive to the outcome of this evaluation. On the contrary, no regard at all is paid to such circumstances.
In view of the above considerations, the Court concludes that, whether or not the impugned proceedings involved a dispute for the purposes of Article 6 § 1, the claims asserted by the applicant did not in any event concern a right which could arguably be said to be recognised under Swedish law.
It follows that Article 6 § 1 of the Convention is not applicable in the instant case and that the application must be rejected as being incompatible ratione materiae with the provisions of the Convention, in accordance with Article 35 §§ 3 and 4. In view of the above, it is appropriate to discontinue the application of Article 29 § 3.
For these reasons, the Court by a majority
Declares the application inadmissible.
Santiago QuesadaJosep Casadevall
RegistrarPresident
Full & Egal Universal Law Academy