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Internal Market

PR(04)37 - Act on Lotteries and Prize Draws contrary to the EEA Agreement

1.12.2004

The EFTA Surveillance Authority decided today to deliver a reasoned opinion to Iceland as it has failed to repeal Article 2 of Act no 6/1926 on Lotteries and Prize Draws (Lög um happdrætti (lotteri) og hlutaveltur (tombólur)).

Article 2 of the Act prohibits persons resident in Iceland from trading in or selling tickets for foreign lotteries or other equivalent prize draws, and from undertaking any work related thereto.

Article 31 of the EEA Agreement provides that there shall be no restrictions on the freedom of establishment of nationals of EC/EFTA States. Article 36   of the EEA Agreement provides that there shall be no restrictions on the freedom to provide services in respect of nationals of EC/ EFTA States who are established in an EC/EFTA State other than that of the person for whom the services are intended. There is established case law from the Court of Justice holding that lotteries constitute services within the meaning of the EC Treaty. The same considerations are equally applicable in the EEA context.

Article 2 of the Act has a restrictive effect on the possibility for foreign lottery providers to provide their services on the Icelandic market, placing them at an inevitable disadvantage as compared to Icelandic lottery providers when they try to encourage purchase of tickets for their lotteries in Iceland. The provision also restricts the freedom of establishment, e.g. in the case of a lottery company from another EEA State wishing to offer its services on the Icelandic market through, e.g. an agent or representative office in Iceland.

The Icelandic Government has not offered any justification for the provision and repeatedly informed the Authority that it would be subject to amendments.

A reasoned opinion is the second stage in the Authority’s formal infringement procedures against a Member State. The Government of Iceland is requested to take measures to comply with this reasoned opinion within three months.

For further information please contact Mr Jónas Fr. Jónsson, Director of Internal Market Affairs Directorate, telephone (+32) (0) 2286 1860.    

1 December 2004




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