Jdigital appeals Spanish decree orders to EC courts

Spain’s Jdigital has submitted a ‘compendium of arguments’ to the European Commission (EC) highlighting that the introduction of the Draft Royal Decree breaches EU law on business practices and fair market arrangements.

Jdigital, with the backing of the European Gaming and Betting Association (EGBA), argues that the Royal Draft Decree had not been subject to ‘public consultation’, and that it is ‘obvious that the Spanish authorities are making an improper use of the emergency procedure’ – adding final amendments that had not been published to market incumbents.

Under EU Directive 2015/1535, the standstill period may be shortened “in cases where […] for urgent reasons, occasioned by serious and unforeseeable circumstances relating to the protection of public health or safety […] and for rules on services, also for public policy, in particular the protection of minors, a Member State is obliged to prepare technical regulations in a very short space of time in order to enact and introduce them immediately without any consultations being possible.”

The TRIS Directive further clarified that “the Member State shall give reasons for the urgency of the measures taken. The Commission shall give its views on the communication as soon as possible. It shall take appropriate action in cases where improper use is made of this procedure.”

According to Jdigital, the Spanish authorities have made ‘improper use of the emergency procedure, and that the Spanish Draft Royal Decree is not eligible for such emergency procedure’.

“It is inadmissible to accept the emergency resource for the approval of a regulation that presents such differentiated treatment between public and private play, especially when gambling is a legal activity in Spain that is already subject to strict controls and regulatory measures, most of them self-imposed by the sector itself,” a statement from Jdigital said.

“This is a rule that completely silences the industry, with significant consequences in terms of jobs and tax collection, at a time of economic crisis as difficult as the one we live in. It is an ideological law, which has no support in data or studies.”

Among its arguments, Jdigital outlined three key areas which it believed discredit the Spanish government’s decision to adopt more stringent measures.

The briefing paper stated: “ First of all, it is submitted that Spain cannot argue that the measures contained in the notified Draft Royal Decree (advertising restrictions on gaming) are directly linked to the COVID-19 pandemic.

“Indeed they do not address serious risks for the public health related to COVID-19 nor the protection of the population from the effect of this disease; the only cases of new drafts notified by Member States that warranted the use of emergency procedure during the pandemic were technical regulations concerning tests, medicinal products and devices, masks etc.

“Second, in any case the criteria to establish urgency (to avoid the application of a standstill period) are not met. Indeed, the Spanish authorities did not prepare such technical regulations “in a very short space of time” and/or due to the COVID state of emergency.

“The backbone of these measures were already prepared in February 2020 and notified to the Commission following the normal TRIS procedure and adopted as Royal Decree 11/2020 on 31st March 2020, at a time when arguably the COVID-19 situation was even more serious and more unforeseeable than at the present stage.

In its appeal, Jdigital states that Spain’s Consumer Affairs Ministry, the author of the controversial amendments had taken advantage of unprecedented market conditions to forward its Decree order to the EC, without any form of technical oversight, required by authorities to provide to licensed market incumbents.

“The notified measures are just adjusting (by providing more restrictions to the internal market) those already notified under the normal procedure at the heart of the crisis : how could they now qualify for an emergency that did not exist and was not invoked at that time?

“Third and to make it worse, the notified measures mostly aim at making the Decree as notified in March 2020 more restrictive and discriminatory, as further elaborated on in the sections on the breach of internal market freedoms below.

“Thus, the only “urgent” motivation for Spain is to favour public lotteries against any other gaming and gambling activities. As the Commission knows, economic motivation cannot be considered as an acceptable justification for imposing restrictions to internal market freedoms, even less in emergency procedures

“Thus the Commission is called upon to oppose Spain’s request for adoption of the Draft Royal Decree without due regard to the TRIS standstill period. It is not only justified so as to allow Member States and interested parties to express their concerns against the notified Draft within the TRIS procedure, but also necessary to avoid a very bad precedent that would weaken the procedure as established by the TRIS Directive.”

Having approved last-minute changes to the Royal Decree, Mikel Arana, new Director-General of Spain’s DGOJ, defended the regulatory body and Spanish government’s actions stating that betting incumbents, football clubs and media owners had been forewarned throughout 2019 of likely changes to the mandate that had been federally approved.

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