Latest from the Court of Justice of the EU

 On 12th September 2024, the Court of Justice of the EU (CJEU) has decided six cases, two of which concern the issue of the Belgian repealing of the exemption for online betting and gambling other than lotteries and the decision of the Belgian Constitutional Court which did not deal with the issue from the perspective of the VAT Directive.

In Chaudfontaine Loisirs (C-73/23) and in Casino de Spa SA and Others (C-741/22) the CJEU has now confirmed that Member States are not precluded from treating online betting in a different way from betting which takes place offline. However, the Court imposed the condition that this could be done "provided that the objective differences between those categories of gambling are liable to have a considerable influence on the decision of the average consumer to use one or other of those categories of games". In other words, this different treatment could only take place where the difference in the nature of the gambling service is so obvious that it could influence the average consumer to chose to play one and not the other.

In my opinion, this condition by the Court is quite subjective, and unfortunately the Court failed to provide the criteria on which such assessment could be done. This makes the rulings more complicated.

Article 135(1)(i) of the VAT Directive exempts betting, lotteries and other forms of gambling, subject to the conditions and limitations laid down by each Member State. It seems that the Court may have considered the exclusion of online gambling as a limitation imposed by the Member State. However, in my opinion, the conditions and limitations referred to in the VAT directive provision do not refer to conditions/limitations that could discriminate between similar services on grounds that these are not supplied through the same medium. 

Here we don't have the issue of goods vs services related to the VAT treatment of ebooks, which was treated in CJEU cases Commission vs France (C-479/13) and Commission vs Luxembourg (C-502/13) and again confirmed by the RPO case (390/15), which also led to a change in Annex III of the VAT Directive. 

In yesterday's cases related to gambling there is no distinction between goods and services; both offline and online gambling other than lotteries are services. And in my opinion, they are similar in nature and merit the same treatment, as for VAT purposes, it is the nature of the service that is important and not the medium through which it is supplied.

These decisions will lead to one conclusion. Despite the European Commission’s efforts, we are still far away from bringing physical and online services on equal footing.  This was the feeling in the discussion on the platform economy at the Council. And decisions of the CJEU such as the ones published yesterday would only confirm that more work needs to be done to attain such objective.