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Constitutional Complaint Against Laws of three Laender Imposing Restrictions on Gambling Halls Unsuccessful
Press Release No. 27/2017 of 11 April 2017
Order of 07 March 2017
1 BvR 1314/12, 1 BvR 1874/13, 1 BvR 1694/13, 1 BvR 1630/12
Stricter requirements for the licencing and operation of gambling halls provided in the First State Treaty of the Laender Amending the State Treaty on Gambling (Erster Glücksspieländerungsstaatsvertrag) and by provisions of the respective laws of three Laender are constitutional. In its Order pronounced today, the First Senate of the Federal Constitutional Court rejected the constitutional complaints lodged by four gambling hall operators based in the Laender (federal states) Berlin, Free State of Bavaria, and Saarland.
Facts of the Case:
Since the 2006 Federalism Reform, the Laender have the legislative competence to enact laws regulating gambling halls. Initially, the State Treaty on Gambling (Glücksspielstaatsvertrag) which the Laender adopted in 2008 did not contain any specific regulations on gambling halls. As a consequence, the provisions adopted by the Federation for the regulation of gambling continued to apply. In 2012, following an increase in turnover generated by gambling machines situated outside casinos (Spielbanken), and in response to studies showing the substantial risk potential stemming from commercialised machine gambling, the Laender established, by way of the First State Treaty Amending the State Treaty on Gambling, stricter requirements for the licencing and operation of gambling halls. For the purpose of regulating the gambling sector, these requirements introduced a prohibition of gambling compounds (Verbundverbot) pursuant to which a gambling hall shall not be located in a building or building complex that is shared with other gambling halls. In addition, gambling halls are required to keep a minimum distance between their respective venues (distance requirement - Abstandsgebot). In order to be allowed to continue the operation of their facilities, gambling halls must fulfil the stricter requirements within certain transitional periods, even if they had already obtained a licence in accordance with applicable statutory regulations prior to the enactment of the new provisions of the State Treaty on Gambling and the laws of the Laender relating to gambling halls.
Already in 2011, the Land of Berlin enacted a Law on Gambling Halls (Spielhallengesetz) which incorporated provisions similar to the ones contained in the First State Treaty Amending the State Treaty on Gambling; in addition, the law requires a minimum distance between a gambling hall and facilities for children and youth. The permissible maximum number of machines in gambling halls was lowered to eight machines; moreover, the law imposes an obligation that a supervisor of the facility must be present at all times.
The four complainants operate gambling halls located in the Laender Berlin, Free State of Bavaria, and Saarland. With their constitutional complaints, they challenge the respective legal regulation of the gambling sector. Essentially, they claim a violation of their fundamental freedom of occupation (Art. 12 of the Basic Law, Grundgesetz – GG) and the general principle of equality before the law (Art. 3 GG).
Key Considerations of the Senate:
1. To begin with, the constitutional complaints are partially inadmissible. In this respect, the complainants failed to sufficiently substantiate that they are presently and directly affected by the challenged provisions. Furthermore, the constitutional complaints in part do not comply with the principle of subsidiarity (Subsidiaritätsgrundsatz), nor do they meet the statutory requirements of substantiation.
2. To the extent that the requirements of admissibility are met, the constitutional complaints are unfounded. The challenged new regulations are compatible with the Constitution.
a) The Laender have the exclusive competence for legislation on gambling halls, which includes the competence to adopt statutory regulations for the operation and the licencing of gambling halls. Federal legislation under the competence of the Federation for law on soil and land, and law on public welfare does not limit the competence of the Laender.
b) The challenged provisions on the licencing and operation of gambling halls interfere with the complainants’ fundamental rights. However, the interferences are justified.
aa) The prohibition of gambling compounds and the distance requirements are compatible with Art. 12(1) GG. Aimed at preventing and averting the risks of addiction stemming from gambling, and at protecting children and youth, the relevant provisions pursue a particularly important objective of the common good. The prohibition of gambling compounds and the distance requirement to other gambling halls serve the purpose of limiting the concentration of gambling halls and thus restricting the overall number of gambling halls. The requirement of a distance to facilities for children and youth aims to prevent gambling addiction as early as possible and to combat the effect of increasing adaption to addictive stimuli. The assessments of the legislature to that end are not manifestly incorrect.
As far as casinos operated by or in cooperation with the state are concerned, the prohibition of gambling compounds and the distance requirement are pursuing the legitimate objective of combatting gambling and betting addiction in a sufficiently consequent manner. Casinos are equally subject to comprehensive regulations for the protection of gamblers, imposed by the Laender; moreover, there is a statutory limit on the number of casinos in the Laender, which reduces the presence of casinos in everyday life. However, the Laender are also under an obligation to ensure that, in the future, the reduction of the number of gambling halls is not undermined by an expansion of machine gambling or an increase of casino venues.
The prohibition of gambling compounds and the distance requirements are also proportionate. They constitute a suitable means for achieving the legitimate objectives of the common good pursued by the legislatures, as they at least contribute to the combat against gambling addiction. The legislatures’ assessments regarding suitability do not raise concerns under constitutional law. It appears plausible that multi-complex compounds in particular create an enhanced incentive for gambling due to the multiplication of the readily available offer. The distance requirement reduces the number of locations available for the establishment of gambling halls and limits their concentration, thereby limiting the overall number of gambling halls. A less restrictive, yet equally effective means is not discernible. Most notably, measures that only relate to gamblers or gambling machines do not constitute an equally effective means for combating and preventing gambling addiction. The prohibition of granting access to minors is not as effective as the distance requirements as it does not reduce – to the same extent – the promotional effect or the increasing adaption to addictive stimuli. The prohibition of gambling compounds and the distance requirements are also appropriate. In an overall balancing of the intensity of the interference, and the weight and urgency of the justifications in this regard, the statutory regulations on the whole comply with the limit set by the requirement of reasonableness and do not impose excessive burdens on the affected persons.
bb) The interferences with the freedom of occupation stemming from the reduction of the maximum number of machines in gambling halls, and from the obligation that a supervisor of the facility be present at all times, are justified as well.
With the reduction of the maximum number of machines in gambling halls, the legislature pursues the objective of preventing addiction by limiting incentives for excessive gambling in gambling halls. The regulation is suitable to achieve this objective, because it was reasonable for the Land legislature to assume that the incentive for gamblers to continue their game in gambling halls is all the lower, the less machines are situated in the facility. The reduction of the maximum number of machines was also necessary and does not impose excessive burdens on the operators of gambling halls. It may be true that the reduction of the maximum number of cash-gambling machines negatively impacts the profitability of gambling halls. However, the principle of proportionality does not guarantee a specific level of profitability.
The obligation that a supervisor of the facility be present aims to facilitate the detection of problematic gambling behaviour and enable an immediate intervention in these cases; thus, it also serves the prevention of addiction – a particularly important objective of the common good – and is proportionate.
cc) The challenged new regulations do not result in an unequal treatment that would be incompatible with Art. 3(1) GG of gaming hall operators in relation to operators of casinos and pubs where cash-gambling machines are situated. Under the challenged provisions, gaming hall operators are indeed treated unequally in relation to casino and pub owners, as gambling halls are subjected to restrictions that do not apply to the operation of gambling machines in casinos, nor to cash-gambling machines in pubs. However, this unequal treatment is justified. The differences in risk potential, with regard to the differences in the availability of gambling opportunities, constitute a sufficient objective reason for the unequal treatment.
c) The transitional regulations challenged by the complainants are also constitutional.
aa) The five-year transitional period for established gambling halls interferes with the freedom of occupation of gaming hall operators; it is, however, constitutionally justified. It complies with the requirement of a statutory provision, as the key criteria for the selection in cases of competing established gambling halls [for legally permissible venues] are specified to a sufficient degree in the gambling hall legislation. The five-year transitional period is also compatible with the principle of protection of legitimate expectations (Vertrauensschutz) derived from Art. 12 GG. This principle does not guarantee an unconditional right to amortisation of investments made, neither with regard to the previously applicable statutory regulations nor with regard to the licences granted. Even a specific expectation that the existing legal framework will continue to apply, demonstrated by action based on this expectation, does not generally result in a protection of legitimate expectation exempt from a balancing of interests. The principle of proportionality is also met. The interests of the gaming hall operators have been adequately taken into account with regard to the granting of a five-year transitional period, not least because the Laender have provided for exceptions in individual cases of extreme hardship.
bb) The interference with the freedom of occupation by the one-year transitional period, applicable to established gambling halls that were licenced after 28 October 2011, is also compatible with Art. 12(1) GG. The distinction between the one-year and the five-year transitional period serves legitimate objectives of the common good and gives due consideration to the protection of legitimate expectations. Protection of the expectation that existing statutory regulations and the licences granted thereunder would continue could be legitimately expected only until the Order of the Conference of Minister-Presidents (Ministerpräsidentenkonferenz) of the First State Treaty Amending the State Treaty on Gambling, after which any legitimate basis for such expectations was eliminated or at least significantly reduced. Basing this distinction on the day of the granting of the commercial licence is also constitutional. The transitional regulation is also proportionate, as the gaming hall operators affected by the one-year transitional period could – at the time the commercial licence was granted – no longer legitimately expect that the former statutory framework would continue to apply. Art. 3(1) GG does not preclude the legislature from opting for staggered transitional periods based on considerations of protection of legitimate expectations, together with a fixed deadline, in order to combat addiction as effectively as possible by way of reducing the offer of gambling halls as quickly as possible.
3. To the extent that the constitutional complaint of one complainant was subsequently modified to also cover the Implementing Law on the Minimum Distance Requirement of the Land of Berlin (Mindestabstandsumsetzungsgesetz Berlin) as well as the provisions of the Gambling Halls Act of the Land of Berlin (Spielhallengesetz Berlin) newly incorporated in 2016, the Senate has severed these proceedings for a separate decision.