FIFTH SECTION
DECISION
Application no. 21252/09
TIPP 24 AG
against Germany
The European Court of Human Rights (Fifth Section), sitting on 27 November 2012 as a Chamber composed of:
Mark Villiger, President,
Angelika Nußberger,
Boštjan M. Zupančič,
Ann Power-Forde,
André Potocki,
Paul Lemmens,
Helena Jäderblom, judges,
and Claudia Westerdiek, Section Registrar,
Having regard to the above application lodged on 22 April 2009,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Tipp 24 AG, (“the applicant company”), is a stock company based in Hamburg. It currently operates under the name Tipp 24 SE. The applicant company was represented before the Court by Mr T. Masing and Mr N. Wimmer, both lawyers practising in Berlin.
A. The circumstances of the case
2. The facts of the case, as submitted by the applicant company, may be summarised as follows.
1. Legal background
3. In Germany, jurisdiction over gambling is divided between the Federal State and the Länder. In most of the Länder, there is a regional monopoly on the organisation of sports betting and lottery games, while the organisation of betting on horseracing and the operation of gaming machines and casinos are entrusted to duly authorised private operators. By way of a State Treaty on lottery games (Staatsvertrag zum Lotteriewesen in Deutschland), which entered into force on 1 July 2004, the Länder created a uniform framework for the organisation, operation and commercial presence of games of chance. Under this treaty, the professional intermediation of lottery games was lawful without special licensing, so long as retailers complied with certain conditions.
4. In a judgment of 28 March 2006 (1 BvR 1054/01) the German Federal Constitutional Court held that the regional monopoly on sports betting in the Land of Bavaria infringed Article 12 § 1 of the Basic Law, which guaranteed freedom of occupation. The court held in particular that, by excluding private operators from the activity of organising betting, without at the same time providing a regulatory framework capable of ensuring the effective pursuit of the aims of reducing the passion for games of chance and combating gambling addiction, the monopoly had a disproportionately adverse effect on the right to freedom of occupation.
5. A majority of the German Länder later concluded the State Treaty on games of chance (Glücksspielstaatsvertrag ‒ “the State Treaty”, see paragraph 18 below), which established a new uniform framework for their organisation, operation and intermediation. The State Treaty was ratified in the Länder of Berlin and Lower Saxony on 15 December 2007 and entered into force on 1 January 2008, subject to certain transitional provisions. It subjected the organisation and intermediation of games of chance to a licensing system whereby licences could be issued by separate Länder and were limited to the territory of the respective Land. Furthermore, the State Treaty prohibited outright the online organisation, intermediation, and advertising of public games of chance.
2. The applicant company’s professional activities
6. From the year 2000, the applicant company operated an Internet platform which allowed the placing of bets with lottery operators run by the German Länder. This intermediation was operated on a contractual basis with the lottery operators, who paid a commission to the applicant company. The applicant company held about 60% of the overall market share in this area. By the end of 2008, it had around two and a half million registered customers.
7. Before the entry into force of the State Treaty, the applicant company requested the Länder authorities to grant it permission to continue its professional activity under Article 25 § 6 of the State Treaty for a transitional period of one year. Only the Länder of Hamburg and Hessen granted such permission. Accordingly, the applicant company continued its activity in these Länder until 31 December 2008. Following that date, the applicant company ceased all its activities relating to the intermediation of the State-run lottery. Instead, it continued to use its Internet platform for hosting so-called “ability games”, which, however, attracted significantly fewer customers.
3. Proceedings before the Federal Constitutional Court
8. On 29 February 2008 the applicant company lodged a constitutional complaint against a number of provisions of the State Treaty as implemented by the laws of the Länder of Berlin and Lower Saxony. The applicant company alleged, in particular, that the prohibition on online organisation and intermediation of public games of chance set out in Article 4 § 4 of the State Treaty violated its right to freedom of occupation under Article 12 of the Basic Law. It further complained of a violation of its property rights, and of its rights to freedom of expression and equal treatment.
9. On 14 October 2008 the Federal Constitutional Court, sitting as a three-judge panel, refused to accept the applicant’s constitutional complaint for adjudication. The court observed that Article 4 § 4 of the State Treaty restricted and (as from 1 January 2009) prohibited outright the online intermediation of public games of chance, and thus the carrying out of a professional activity which had until then been exercised by the applicant company in a lawful way. Furthermore, Article 4 §§ 1 and 2, by subjecting the organisation of public games to State licensing, restricted the applicant company’s right to carry out a specific professional activity. These provisions were closely linked to Article 9 § 4 of the State Treaty, which provided that licences were issued by the Länder authorities and were limited to the territory of the respective Land. The Federal Constitutional Court concluded that these provisions interfered with the applicant company’s freedom to provide services. The same applied to the provisions relating to advertising and to its prohibition on television, the Internet and via other means of telecommunication. Conversely, the applicant company’s complaint did not come within the scope of the right to protection of property (Article 14 of the Basic Law), as that right only applied in case of interference with the use of acquired property, but not in cases concerning interference with specific professional activities.
10. The Federal Constitutional Court held that the provisions at issue were sufficiently precise and complied with the distribution of powers within the Federal State. Furthermore, they respected the principle of proportionality. In this connection, the court noted that the provisions primarily pursued the aim of protecting the population, and in particular minors, from the dangers of dependency on games and gambling-related crime. The court considered that these were important aims serving the public interest, which were capable of justifying objective restrictions on the freedom to carry out a specific professional activity.
11. The court further considered that gambling dependency could entail serious consequences not only for the person concerned, but also for his or her family and the wider community. It was true that certain types of games of chance were more likely to cause dependency than others, and that the lottery games intermediated by the applicant company were less likely to cause problematic or even pathological gambling behaviour than, for example, gaming machines and casino games. However, this did not call into question the legitimacy of the aims pursued.
12. The court considered that the legislature enjoyed a wide margin of appreciation when it came to making a prognosis on dangers to be averted from the public. This margin of appreciation was only exceeded if the legislature’s considerations were obviously erroneous to such a degree that they could not serve as a basis for the legislative measure in issue. Against this yardstick, the Federal Constitutional did not find reason to object to the legislature’s considerations. It noted that these considerations were supported by scientific research carried out by the University of Bremen, from which it could be concluded that lottery games could lead to the development of symptoms of addiction.
13. The court further held that the provisions were suitable for achieving the aim pursued. The prohibition on and special licensing of the organisation of games of chance created a channelling effect leading to a restriction on which games were offered and enhanced the transparency of the betting industry. In particular, the licensing system allowed the Länder authorities to directly influence the number of persons actively working in the betting industry. The restrictions on advertising also pursued the aim of preventing dependency and protecting minors.
14. Lastly, the court considered that the prohibition on the online organisation and intermediation of public games of chance was intended to curtail problematic forms of participation in such games. Online gambling was characterised by a high degree of convenience and unrestricted availability of the games in question. The high degree of abstraction from traditional ways of gambling could cause a player to lose perspective and, in particular, ignore the possibility of losing stakes. By cutting off the option of online gambling, participation became more difficult and the individual player was made more aware of the process of the game, which could prevent him or her from drifting off into problematic behaviour. Furthermore, there remained doubts as to whether the requirements of protecting minors could be effectively implemented on the Internet.
15. As regards the proportionality of the interference, the court further held that the Länder stayed within their margin of appreciation. It was, in particular, acceptable to ban any form of online advertising, as the State-run games of chance were exclusively devised to channel the natural play instinct, but they should not turn into a branch of the national economy. Lastly, the court held that there was no indication that any of the other basic rights relied upon by the applicant company had been violated.
16. The decision was served on the applicant company’s counsel on 22 October 2008.
4. Further developments
17. On 1 June 2012, a new State Treaty amending the Treaty on Games of Chance entered into force. Under this new Treaty, the Länder may allow the organisation and intermediation of public games of chance on the Internet, provided specific prerequisites are met. The operator must, in particular, ensure the effective exclusion of minors or prohibited players. Furthermore, stakes must, as a rule, not exceed EUR 1,000 per player and month; particular incitements to dependency by rapid draws are prohibited; a programme of social measures adapted to the specific conditions of the internet have to be established and operated and bets and lotteries must not be offered via the same Internet domain. Advertising for public games of chance on television, on the Internet and via means of telecommunication remains, as a rule, prohibited, but the Länder may allow advertising for lotteries and horse- and sports bets on the Internet and on television in accordance with the principles laid down in the State Treaty.
B. Relevant domestic law
18. The relevant provisions of the State Treaty on games of chance (Glücksspielstaatsvertrag – “the State Treaty”), which entered into force on 1 January 2008, read as follows:
Article 1
“The State Treaty’s objectives
The objectives of this State Treaty are as follows:
(1) to prevent dependency on games of chance and on bets, and to create the conditions for effectively combating dependency;
(2) to limit the supply of games of chance and to channel the gaming instinct of the population in an organised and supervised manner, preventing in particular a drift towards unauthorised games of chance;
(3) to ensure the protection of minors and players;
(4) to ensure the smooth operation of games of chance and the protection of players against fraudulent manoeuvres, and to prevent criminality connected with and arising from games of chance.”
Article 4
“General provisions
(1) The organisation or intermediation of public games of chance may take place only with the authorisation of the competent authority of the Land concerned. All organisation or intermediation of such games is prohibited without such authorisation (unlawful games of chance).
(2) Such authorisation shall be refused where the organisation or intermediation of the game of chance is contrary to the objectives of Article 1. Authorisation shall not be issued for the intermediation of games of chance unlawful according to the present State Treaty. There is no established right to the obtaining of an authorisation.
(3) The organisation and intermediation of public games of chance must not contravene the requirements of the protection of minors. Minors are not allowed to take part. The organiser or intermediary has to ensure that minors are excluded from taking part.
(4) The organisation and intermediation of public games of chance on the internet are prohibited.”
Article 5
“Advertising
(1) In order to avoid any enticement while maintaining the aim of offering lawful gaming opportunities, advertisements for public games of chance have to be limited to offering information and instructions on the offer of games of chance.
(2) Advertising for public games of chance must not contravene the aims laid down in Article 1. In particular, it must not be targeted at inviting, enticing or encouraging participation in public games. It must not be addressed to minors or similarly vulnerable target groups. Advertisements must not be misleading and must contain clear information that minors are not allowed to participate as well as on the risk of addiction and the possibilities of obtaining help.
(3) Any advertising for public games of chance on television, on the Internet and via other means of telecommunication is prohibited.
(4) Any advertising for unlawful games of chance is prohibited.”
Article 9
“Supervision of games of chance
...
(4) The authorisation is issued by the competent authority for the territory of the respective Land or for a part of this territory. It has to be revocable and subject to a time-limit...”
Article 25
“(6) The Länder may, for a maximum period of one year after the entry into force of the State Treaty, by way of derogation from Article 4 § 4, permit the organisation and intermediation of lottery games on the Internet where there is no reason to refuse them pursuant to Article 4 § 2 and where the following conditions are met:
1. exclusion of minors or prohibited players guaranteed by identification and authentication measures, in compliance with the directives of the Commission for the protection of minors as a closed group of media users;
2. limitation of stakes, as fixed in the authorisation, to EUR 1,000 per month, and guarantee that credit is prohibited;
3. prohibition of particular incitements to dependency by rapid draws and of the possibility of participating interactively with publication of results in real time; as regards lottery games, limitation to two winning draws per week;
4. localisation by use of the most modern methods, in order to ensure that only persons within the scope of the authorisation may participate;
5. establishment and operation of a programme of social measures adapted to the specific conditions of the Internet, the effectiveness of which is to be assessed scientifically.”
C. Relevant case-law of the Court of Justice of the European Union
19. On 8 September 2010, the Court of Justice of the European Union (CJEU) issued several judgments relating to the compatibility of the rules on sports betting with European Union (EU) Law (case C-409/06, Winner Wetten GmbH v Bürgermeisterin der Stadt Bergheim; joined cases C‑316/07, C-358/07 to C-360/07 C-409/07 and C-410/07, Markus Stoss and Others v. Wetterauskreis and Others; and C-46/08, Carmen Media Group Ltd v. Schleswig-Holstein and Others). The CJEU found that the German rules did not regulate games of chance in a consistent and systematic manner. In such circumstances, the objective of preventing incitement to squander money on gambling and combating addiction to the latter could no longer be effectively pursued by public monopoly, so that the latter could no longer be justified having regard to Articles 43 and 49 of the EC Treaty (freedom of establishment and freedom to provide services; see Markus Stoss and Others, ibid., §§ 106-107).
20. In its judgment in the case of Carmen Media Group Ltd. (ibid., §§ 97-111), the CJEU, in addition, answered the question as to whether a prohibition such as that set out in Article 4 of the State Treaty (referred to below as “the GlüStV”) could be regarded as suitable for pursuing the objectives of combating the risk of dependency on games of chance and protecting minors from the betting industry as follows:
“97. Concerning, first, the prohibition on the organisation and intermediation of games of chance on the internet, it should be noted that the referring court has confined itself to casting doubt on the conformity of that prohibition with EU law in the very general terms which have just been referred to in paragraph 95 of this judgment.
98. Since the referring court has not been more specific about the nature of the doubts which it has in that regard, merely referring to positions which the Commission is said to have adopted in a reasoned opinion addressed to the Federal Republic of Germany following notification by the latter of the draft of the GlüStV [Glücksspielstaatsvertrag, see §§ 5 and 17, above], without however explaining them in any way, the Court will limit its examination to the question whether a measure prohibiting offers of games of chance on the internet such as that contained in [Article] 4(4) of the GlüStV may, in principle, be regarded as suitable for achieving the objectives of preventing incitement to squander money on gambling, combating gambling addiction, and protecting young people.
99. In that regard, it should be noted as a preliminary observation that the Court has previously acknowledged that a measure prohibiting, purely and simply, the practice of a form of gambling on the territory of a Member State, in that case lotteries, is capable of being justified by such overriding reasons in the public interest (see Schindler).
100. In the main proceedings, the prohibition in dispute concerns not the marketing of a particular type of gambling, but a channel through which games of chance may be offered, namely the internet.
101. The Court has already had occasion to emphasise the particularities concerned with the offering of games of chance on the internet (see Liga Portuguesa de Futebol Profissional and Bwin International, paragraph 72).
102. has thus observed in particular that, because of the lack of direct contact between consumer and operator, games of chance accessible via the internet involve different and more substantial risks of fraud by operators against consumers compared with the traditional markets for such games (Liga Portuguesa de Futebol Profissional and Bwin International, paragraph 70).
103. It should be noted that, in the same way, the characteristics specific to the offer of games of chance by the internet may prove to be a source of risks of a different kind and a greater order in the area of consumer protection, particularly in relation to young persons and those with a propensity for gambling or likely to develop such a propensity, in comparison with traditional markets for such games. Apart from the lack of direct contact between the consumer and the operator, previously referred to, the particular ease and the permanence of access to games offered over the internet and the potentially high volume and frequency of such an international offer, in an environment which is moreover characterised by isolation of the player, anonymity and an absence of social control, constitute so many factors likely to foster the development of gambling addiction and the related squandering of money, and thus likely to increase the negative social and moral consequences attaching thereto, as underlined by consistent case-law.
104. Moreover, it should be noted that, having regard to the discretion which Member States enjoy in determining the level of protection of consumers and the social order in the gaming sector, it is not necessary, with regard to the criterion of proportionality, that a restrictive measure decreed by the authorities of one Member State should correspond to a view shared by all the Member States concerning the means of protecting the legitimate interest at issue (see, by analogy, Case C518/06 Commission v Italy [2009] ECR I-3491, paragraphs 83 and 84).
105. Having regard to the whole of the above, it must be acknowledged that a prohibition measure covering any offer of games of chance via the internet may, in principle, be regarded as suitable for pursuing the legitimate objectives of preventing incitement to squander money on gambling, combating addiction to the latter and protecting young persons, even though the offer of such games remains authorised through more traditional channels.
106. Secondly, concerning the establishment of a transitional period such as that at issue in the main proceedings, it needs in particular to be verified whether the latter might not undermine the consistency of the legislation concerned by leading to a result contrary to the objective pursued.
107. In that respect, it should first be noted that the transitional measure at issue in the main proceedings applies only to lotteries, and not to other types of gambling.
108. Next, the explanations provided by the referring court show that that transitional measure is designed only to allow certain economic operators, who had hitherto legally offered lotteries via the internet in the Land concerned, to carry out a conversion of their business following the entry into force of the prohibition affecting their initial business, and that it is limited in duration to one year, which cannot be regarded as unreasonable in the said perspective.
109. Finally, it should also be emphasised, first, that, according to [Article] 25(6) of the GlüStV and [Article] 9 of the GlüStV AG, during the said transitional period, the operators concerned are obliged to comply with a series of conditions concerning the exclusion of minors and prohibited players, the limitation of stakes, the rules for and the frequency of the offer of games and the implementation of social measures, and, secondly, that the Land Schleswig-Holstein has stated before the Court that the benefit of that transitional measure was to be available, without discrimination, to all lottery operators who might be concerned.
110. It does not therefore appear that such a transitional period, in appearance justified by considerations of legal certainty (see, by analogy, Case C-347/06 ASM Brescia [2008] ECR I‑5641, paragraphs 68 to 71), is likely to affect the consistency of the measure prohibiting the offer of gambling on the internet and its suitability for achieving the objectives which it pursues (see, by analogy, in relation to a temporary exception from a prohibition on the operation of pharmacies by non-pharmacists, Joined Cases C-171/07 and C-172/07 Apothekerkammer des Saarlandes and Others [2009] ECR I-4171, paragraphs 45 to 50).
111. Having regard to all the foregoing, the answer to the fourth question is that, on a proper interpretation of Article 49 EC, national legislation prohibiting the organisation and intermediation of games of chance on the internet for the purposes of preventing the squandering of money on gambling, combating addiction to the latter and protecting young persons may, in principle, be regarded as suitable for pursuing such legitimate objectives, even if the offer of such games remains authorised through more traditional channels. The fact that such a prohibition is accompanied by a transitional measure such as that at issue in the main proceedings is not capable of depriving the said prohibition of that suitability.”
COMPLAINTS
21. The applicant complained under Article 1 of Protocol No. 1 and Articles 10 and 14 of the Convention about the decision of the Federal Constitutional Court dated 14 October 2008 together with the relevant provisions of the State Treaty.
THE LAW
A. Alleged violation of Article 1 of Protocol No. 1 to the Convention
22. The applicant company complained that the relevant provisions of the State Treaty violated its right to the peaceful enjoyment of its possessions provided for in Article 1 of Protocol No. 1 to the Convention, which reads as follows:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
23. In the applicant’s submission, the State Treaty interfered with its possessions, which consisted of, in particular, its clientele of two and a half million registered customers. Following the entry into force of the State Treaty, the value of this asset was considerably reduced. The applicant company further submitted that this interference, in so far as it prevented the applicant company from carrying out its professional activities on the Internet, amounted to an expropriation which was incompatible with Article 1 of Protocol No. 1. It alleged, in particular, that the legal prerequisites for granting a licence were not sufficiently defined. The same applied to the prohibition on advertising. The applicant company further submitted that the interference had not been “necessary in accordance with the general interest”. It alleged, in particular, that the legislature did not exclusively pursue the aims set out in Article 1 of the State Treaty, but that the Länder pursued the further unwritten objective of generating revenue from games of chance for the public treasury of the respective Land. As had been confirmed by the CJEU, the legislature did not pursue its alleged aims of protecting the public and minors from the negative effects of gambling in a consistent and systematic way. This was, inter alia, demonstrated by the fact that the German authorities had turned a blind eye to the State-run lottery games themselves commissioning extensive advertising campaigns, despite the severe restrictions imposed by the State Treaty on such advertising. The applicant company further emphasised that its professional activities had always been restricted to allowing the placing of bets on the Internet with the State-run lottery. These prize draws, which were limited to two per week, did not pose any significant risk to the public. All relevant scientific studies confirmed that the main problems arose with gambling machines in restaurants and casinos. There was practically no risk that low-frequency lottery games such as these, taken on their own, caused dependency. This was confirmed by the fact that Article 25 § 6 of the State Treaty assumed that such lottery games did not encourage dependency. The applicant company further submitted that the operation of the Internet platform had been lawful and in accordance with national and EU law. The applicant company therefore had the legitimate expectation of being allowed to carry out its professional activities. Lastly, the applicant company submitted that it had not been granted any compensation for deprivation of property. The transitional provisions contained in Article 25 § 6 of the State Treaty merely postponed the effect of the law, but did not constitute any compensation.
24. The Court notes, at the outset, that the applicant company, following the entry into force of the State treaty, was prevented from pursuing its professional activities in the field of intermediation of public games of chance on the Internet as from 1 January 2008 and 1 January 2009, respectively. On 1 June 2012 (see paragraph 17, above), a new State treaty entered into force. Under this treaty, the Länder may allow the organisation and intermediation of public games of chance on the Internet, subject to specific conditions. It follows that any form of intermediation of games of chance on the Internet and any advertising therefore was completely prohibited from 1 January 2008 (with a transitory period until 1 January 2009) until 1 June 2012 and is now subject to special authorisation by the respective Länder. Accordingly, the applicant company has not ceased to be a victim of the alleged violation of its Convention rights (Article 34 of the Convention).
25. The Court will proceed its examination by considering whether the State Treaty affected the applicant company’s “possessions” within the meaning of Article 1 of Protocol No. 1. The Court has recently summarised its case-law on Article 1 of Protocol No. 1 with respect to professional activities in the case of Malik v. the United Kingdom ( no. 23780/08, §§ 88‑89, 13 March 2012):
“88. The Court reiterates at the outset that Article 1 of Protocol No. 1 applies only to a person’s existing possessions; it does not guarantee the right to acquire possessions (see Marckx v. Belgium, 13 June 1979, § 50, Series A no. 31 and Slivenko v. Latvia (dec.) [GC], no. 48321/99, § 121, ECHR 2002-II (extracts)).
89. The Court has previously considered that rights akin to property rights existed in cases concerning professional practices where by dint of their own work, the applicants concerned had built up a clientele. It explained that this clientele had, in many respects, the nature of a private right and constituted an asset and, hence, a possession within the meaning of the first sentence of Article 1 (see Van Marle and Others, cited above, § 41). In a case involving an alleged interference with an applicant’s medical practice, the Commission noted that the ‘vested interests’ in the applicant’s medical practice could be regarded as ‘possessions’ (see Karni v. Sweden, no. 11540/85, Commission decision of 8 March 1988, Decisions and Reports 55, p. 157). In later cases, the Court explained that law practices and their clientele were entities of a certain worth that had in many respects the nature of a private right and thus constituted assets and therefore possessions within the meaning of the first sentence of Article 1 (see Olbertz v. Germany (dec.), no. 37592/97, 25 May 1999; Döring v. Germany (dec.), no. 37595/97, 9 November 1999; and Wendenburg v. Germany, cited above). The Court has also indicated that it did not matter whether the applicants acquired the possessions by taking advantage of a favourable position, or solely through their own activities. It found that when dealing with the protection of privileges accorded by law, Article 1 of Protocol No. 1 was applicable where such privileges led to a legitimate expectation of acquiring certain possessions (see Wendenburg, cited above).
90. In previous cases involving professional practices, the Court has taken the view that a restriction on applicants’ right to practise the profession concerned, such as a refusal to register an applicant on a professional list, significantly affected the conditions of their professional activities and reduced the scope of those activities. Where, as a consequence of the restrictions, the applicant’s income and the value of his clientele and, more generally, his business, fell, the Court has held that there was interference with the right to peaceful enjoyment of possessions (see Van Marle, cited above, § 42).
91. In cases concerning the grants of licences or permits to carry out a business, the Court has indicated that the revocation or withdrawal of a permit or licence interfered with the applicants’ right to the peaceful enjoyment of their possessions, including the economic interests connected with the underlying business (see Fredin v. Sweden (no. 1), 18 February 1991, § 40, Series A no. 192, in respect of an exploitation permit for a gravel pit; and mutatis mutandis, Tre Traktörer AB v. Sweden, 7 July 1989, § 53, Series A no. 159, concerning a licence to serve alcoholic beverages in a restaurant. See also Rosenzweig and Bonded Warehouses Ltd. v. Poland, no. 51728/99, § 49, 28 July 2005, which involved a licence to run a bonded warehouse). In this regard, the Court observed in particular in Tre Traktörer AB that the maintenance of the licence was one of the principal conditions for the carrying on of the applicant company’s business, and that its withdrawal had had adverse effects on the goodwill and value of the restaurant (at §§ 43 and 53 of the Court’s judgment).
...
93. The Court recalls that goodwill may be an element in the valuation of a professional practice or business engaged in commerce. Future income, on the other hand, is only a ‘possession’ once it has been earned, or an enforceable claim to it exists (see Ian Edgar [Liverpool] Ltd. v. the United Kingdom (dec.), no. 37683/97, 25 January 2000; and Denimark Limited and 11 Others v. the United Kingdom (dec.), no. 37660/97, 26 September 2000). Where an applicant refers to the value of his business based upon the profits generated by the business, or the means of earning an income from the business, as “goodwill”, the Court has indicated that this reference is to be understood as a complaint in substance of loss of future income. The Court has previously found that this element of the complaint falls outside the scope of Article 1 of Protocol No. 1 (see Ian Edgar (Liverpool) Ltd.; and Denimark Limited and 11 Others, both cited above).
94. The above review of the general principles which emerge from an examination of the Court’s case-law demonstrates that, in cases involving the suspension or revocation of licences and permits or the refusal to enrol a person on a list of individuals entitled to practise a particular profession, the Court has tended to regard as a “possession” the underlying business or professional practice in question. Restrictions placed on registration, licences or permits connected to the work carried out by the business or the practice of the profession are generally viewed by the Court as the means by which the interference with a business or professional practice has taken place.”
26. It follows from the above-cited case-law that any complaint of a loss of “goodwill” in the form of future income would clearly fall outside the scope of Article 1 of Protocol No. 1. Conversely, the applicant company’s business assets, including its clientele of about two and a half million registered customers, may be regarded as “possessions” within the meaning of that Article.
27. With regard to the question whether there had been an interference with these possessions, the Court observes that the applicant company complains about the loss of value of these business assets brought about by the restrictions imposed by the State Treaty. The Court notes that there has been no formal expropriation of any assets of the applicant company, whether in favour of the Government or a third party. Whilst it is possible that in certain circumstances there may be a de facto expropriation of possessions even without any formal alienation, on the ground that property has become wholly unusable (see, for example, Papamichalopoulos and Others v. Greece, 24 June 1993, §§ 43-45, Series A no. 260‑B), the present application does not disclose any such circumstances. In this connection the Court notes that the applicant company, after the prohibition had been implemented, continued to use its Internet platform for offering so called “ability games”.
28. In the Court’s view, the applicant company’s situation in the present case is comparable to that encountered in the case of Ian Edgar (Liverpool) Ltd v. the United Kingdom ((dec.), no. 37683/97, ECHR 2000‑I; also compare Denimark Ltd and Others v. the United Kingdom (dec.), no. 37660/97, 26 September 2000), in which the applicant business was a wholesaler and distributor of firearms, and the loss of business resulted from a prohibition on the possession of handguns. In that case, the Court assessed the loss of business suffered by the applicant as a “control of use” rather than a “deprivation of possessions”.
29. In the present case, the applicant company was not concerned by the prohibition on the organisation of games of chance on the Internet, as it did not engage in such business. The applicant company has, however, established having suffered a loss of business resulting from the prohibition on the online intermediation of games of chance. Insofar as the applicant company further complains about the restrictions imposed on advertising, the Court considers that these measures might have reduced the possibility of gaining future income, but did not have a direct impact on the applicant company’s possessions. The Court concludes that the State treaty, by prohibiting intermediation of games of chance on the Internet, interfered with the applicant company’s possessions, amounting to a “control of use”.
30. It thus remains to be determined if the relevant provisions of the State Treaty met the prerequisites of the second paragraph of Article 1 of Protocol No. 1 to the Convention.
31. The Court observes, at the outset, that the State Treaty defined the prerequisites for granting a licence for the organisation and intermediation of games of chance as well as the prohibition of such activities on the Internet with sufficient clarity for serving the purpose of controlling the use of property within the meaning of paragraph 2 of Article 1 of Protocol No. 1.
32. The Court will thus proceed by examining whether the interference with the applicant company’s possessions pursued a legitimate aim and struck a fair balance between the demands of the general interest pursued and the requirement to protect the applicant company’s property rights. In determining whether a fair balance exists, the Court has recognised that the State enjoys a wide margin of appreciation with regard both to choosing the means of enforcement and to ascertaining whether the consequences of enforcement are justified in the general interest for the purpose of achieving the object of the law in question (see AGOSI v. the United Kingdom, 24 October 1986, § 52, Series A no. 108; Tre Traktörer AB v. Sweden, 7 July 1989, § 62, Series A no. 159 and Fredin v. Sweden (no. 1), 18 February 1991, § 51, Series A no. 192).
33. Turning to the circumstances of the case, the Court observes that the State Treaty provisions at issue pursued the objectives set out in Article 1 thereof, that is to say the aim of preventing dependency on games of chance and ensuring the protection of minors, both which are undoubtedly very important aims in the general interest. This is not called into question by the fact that the regulations as a whole, in particular seen in conjunction with the public monopoly, may also have had the side-effect of generating revenue from the organisation of games of chance for the public treasury of the Länder. The Court further accepts that games of chance accessible online may impose different and more significant risks when compared with traditional forms of taking part in such games. This is not called into question by the fact that the lottery games offered by the applicant company, taken on their own, may be less likely to cause dependency than other games of chance.
34. The Court further observes that the applicant company operated its business in an industry which, in view of the dangers inherent in games of chance, was traditionally subject to restrictions, as is reflected in the State monopoly on the lottery in force at the relevant time. Under these circumstances, the Court does not find sufficient grounds supporting the applicant company’s alleged expectation that it would be able to continue its business of the online intermediation of lottery games indefinitely. The Court observes in addition that the State Treaty contained a transitional provision and that the applicant company was allowed to carry out its professional activities for one further year after the entry into force of the new regulations in two of the Länder concerned.
35. In these circumstances, the Court does not consider it unreasonable to impose a prohibition on online intermediation of games of chance. This is not called into question by the fact that the new State Treaty, which entered into force on 1 June 2012, allows for granting authorisation for such activities provided certain prerequisites are met (compare paragraph 17, above). Having regard to the wide margin of appreciation afforded to the State in this area (see paragraph 32, above) and to the importance of the interests to be protected, the Court considers that there is no indication that the applicant company suffered an excessive burden. There is thus no appearance of a violation of the applicant company’s rights under Article 1 of Protocol No. 1 to the Convention.
36. It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
B. Alleged violation of Article 10 of the Convention
37. The applicant company further complained that the restrictions imposed by the State Treaty on its right to advertise violated its right to freedom of expression under Article 10 of the Convention, which provides:
“1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. This Article shall not prevent states from requiring the licensing of broadcasting, television or cinema enterprises.
2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary.”
38. In the applicant company’s submission, the restrictions contained in Article 5 of the State Treaty were not sufficiently defined. Furthermore, the interference was not necessary in a democratic society. While advertising for other products, such as betting on sport events, might attract potential addicts, this did not apply to lottery games. Nevertheless, the advertising restrictions applied to all forms of games of chance, irrespective of how likely they were to be addictive.
39. The Court reiterates that States have a broad margin of appreciation in the regulation of speech in commercial matters or advertising (see Mouvement raëlien suisse v. Switzerland [GC], no. 16354/06, § 61, 13 July 2012, and the case-law cited therein). With regard to the applicant company’s allegation that the German authorities had “turned a blind eye” to the State-run lottery games themselves commissioning extensive advertising campaigns (compare paragraph 23, above), the Court observes that the restrictions on advertising contained in Article 5 of the State Treaty (see paragraph 18 above) applied to public and private retailers alike. Even if it should be true that the domestic authorities had failed in the past sufficiently to supervise the implementation of these rules in the public domain, this does not call in question the overall necessity of the prohibtion. Having regard to its findings under Article 1 of Protocol No. 1 (see paragraphs 33-34 above), the Court considers that any interference with the applicant company’s right to freedom of expression was justified under Article 10 § 2 as being necessary in a democratic society. There is thus no appearance of a violation of Article 10 of the Convention.
40. It follows that this complaint is also manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
C. Alleged violation of Article 14 in conjunction with Article 1 of Protocol No. 1 and Article 10 of the Convention
41. The applicant company lastly complained of having been discriminated against in its capacity as an online service provider as opposed to competitors operating via other means of telecommunication. It relied on Article 14 in conjunction with Article 1 of Protocol No. 1 and Article 10 of the Convention. Article 14 of the Convention provides:
“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”
42. In the applicant company’s submission, there were no relevant grounds to justify treating online intermediation any differently from postal or point-of-sale intermediation. Traditional points of sale were operated by private individuals trying to turn a profit just like the applicant company. There was no difference whether a lottery voucher was filled out by hand or completed online. Even if one were to assume that lottery games posed a risk of dependency, this risk would exist regardless of the way the tickets were distributed. Online intermediation could not lead to a higher risk of dependency, as points of sale such as licensed news-stands were easily accessible nationwide. Furthermore, the Internet offered links to information regarding the prevention of addiction and imposed stricter controls on the protection of minors than traditional points of sale. There was no reason why such measures should have been deemed sufficient during a transitional period, but not in the long term. Likewise, there were no relevant reasons justifying the prohibition on online advertising but not advertising on the radio or at traditional points of sale.
43. The Court observes, at the outset, that there was an interference with the applicant company’s property rights in the instant case. It follows that Article 14 is applicable. According to the Court’s well-established case-law, discrimination means treating differently, without an objective and reasonable justification, persons in relevantly similar situations. A difference in treatment has no objective and reasonable justification if it does not pursue a “legitimate aim” or if there is not a “reasonable relationship of proportionality” between the means employed and the aim sought to be realised (see, among many other authorities, Kurić and Others v. Slovenia [GC], no. 26828/06, § 386, ECHR 2012).
44. Turning to the circumstances of the instant case, the Court observes, firstly, that the applicant company complained of having been discriminated against in its capacity as an online service provider vis-à-vis other competitors providing the same services through more traditional media. The Court observes that the Internet is a medium which has specific qualities, such as being easily accessible and available at all times. The Court accepts the domestic authorities’ assessment that intermediation of betting via this medium involves different and more substantial risks than intermediation via more traditional media (also compare in this respect the case-law of the CJEU, see paragraph 18, above). The Court concludes that there were sufficient reasons allowing the domestic authorities to differentiate between the intermediation on the Internet and intermediation via other media.
45. The applicant company further complained of a violation of Article 14 in conjunction with Article 1 of Protocol No. 1 and Article 10 of the Convention as the prohibition on online intermediation and advertising applied to them the same way as to retailers offering high-frequency lottery and other types of games of chance. The applicant had thus been treated in the same way as retailers offering games of chance which were indeed dangerous. This treatment did not in any way serve the proclaimed purpose of the State Treaty. The Court reiterates that the right not to be discriminated against in the enjoyment of the rights guaranteed under the Convention may also be violated when States without an objective and reasonable justification fail to treat differently persons whose situations are significantly different (see Thlimmenos v. Greece [GC], no. 34369/97, § 44, ECHR 2000‑IV). It considers, however, that the fact that the games offered by the applicant company might be less dangerous than other games of chance covered by the prohibition did not oblige the legislature to exempt services such as those offered by the applicant company from this prohibition.
46. The Court concludes that there is no indication of discriminatory treatment contrary to Article 14 in conjunction with Article 1 of Protocol No. 1 and Article 10 of the Convention. It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Claudia WesterdiekMark Villiger
RegistrarPresident
Full & Egal Universal Law Academy