Abstract
The Constitutional Court handed down its judgment as a full court consisting of the president Pavel Rychetský and judges Jaroslav Fenyk, Josef Fiala, Jan Filip, Jaromír Jirsa as the judge rapporteur, Tomáš Lichovník, Jan Musil, Vladimír Sládeček, Radovan Suchánek, Kateřina Šimáčková, Milada Tomková and David Uhlíř on the application of a group of 21 senators of the Senate of the Parliament of the Czech Republic, represented by Mgr. Ing. Martin Lukáš, attorney‐at‐law with his registered seat in Prague 1, Na Florenci 2116/15, regarding the annulment of the provisions of sections 82, 84 and 123(5) of the Act No. 186/2016 Coll., on Gambling, with the participation of the Chamber of Deputies of the Parliament of the Czech Republic, the Senate of the Parliament of the Czech Republic (parties to the proceedings) and the Government of the Czech Republic intervening, as follows:
The application for annulment of the provisions of Sections 82, 84 and 123(5) of the Act No. 186/2016 Coll., on Gambling, is dismissed.
Reasoning:
I. APPLICATION FOR ANNULMENT OF THE ACT'S PROVISIONS
1. Pursuant to section 64(1)(b) of the Act No. 182/1993 Coll., on the Constitutional Court, as amended (“Constitutional Court Act”), within the meaning of Article 87(1)(a) of the Constitution of the Czech Republic (Constitutional Act No. 1/1993 Coll., as amended) (“Constitution”), the group of 21 senators of the Senate of the Parliament of the Czech Republic seeks in their application lodged on 31 August 2016 that the Constitutional Court repeals the provisions of sections 82, 84 and 123(5) of the Act No. 186/2016 Coll., on Gambling (“Gambling Act”).
2. The provisions of Sections 82 and 84 regulate (simply put) the “blocking” of unauthorised online games: Providers of internet connection in the territory of the Czech Republic are pursuant to these sections obliged to prevent access to internet sites listed on the list of unauthorised online games (so‐called blacklist), which is maintained by the Ministry of Finance (“Ministry”) which also decides on the ex officio registration and carries out removals from the list. The list contains internet sites that operate games of gambling without authorisation or without due notification. In the course of administrative proceedings regarding the entry of an internet site on the list, documents are delivered to the interested party by way of a public notice and if its residence or seat is known, then also to its attention there. The internet connection providers are obliged to prevent access within 15 days from the publication of the list, which is accessible on the Ministry's webpage. The provision of Section 123(5) sets out the administrative offense consisting of the internet connection provider not taking the necessary steps to prevent access to internet sites on the blacklist within the specified statutory period, for which a fine up to CZK 1,000,000 can be imposed.
3. The applicant considers the relevant Sections as contradictory to the constitutional order; it claims that it is uncertain, interferes with the legal certainty of the addressees, freedom of expression and right to access of information pursuant to Art. 17, as well as with the right to undertake an economic activity enshrined in Art. 26 of the Charter of Fundamental Rights and Freedoms (Act No. 2/1993 Coll., as amended) (“Charter”), contradicts the requirements of international treaties binding the Czech Republic as well as the European Union law. In support of its claims, the applicant provides an expert opinion dated 29 August 2016, No. 1483/2016, composed by Ing. Jan Fanta, court expert in, amongst others, electronics, cybernetics and IT.
4. Pursuant to the applicant, the uncertainty of the Act stems from that fact that the Act does not unequivocally set out its mandatory subjects—it does not clearly define the term “internet connection provider”; in particular, it is unclear whether it relates solely to entrepreneurs or also to other persons who enable internet connection to end users, such as restaurants, universities, municipalities or normal individuals that enable connection through a so called hotspot. On the other hand, it does not (yet it ought to) relate to provision of access from abroad, e.g. through a satellite or within the scope of internal networks of multinational enterprises. The regulation is unclear also with respect to the term “internet sites”—in practice the term “webpages” is used, which has, a slightly different meaning. The Act does not make it clear whether the domain address should be blocked as a whole or just the domain name of a second or lower order. It also does not clarify the manner of access to the list, to what extent the cooperation of the internet connection providers will be required and whether or not sites containing advertising for illegal gambling shall be included.
5. Apart from the uncertain terminology, the applicant points out the uncertainties surrounding the procedural regime—the blocking ought to be carried out exclusively pursuant to a court order or a decision of a specialised authority, for example the Czech Telecommunication Office. The Act does not regulate to a sufficient degree the process of removals from the blacklist of unauthorised online games and the connection providers' obligation to (re‐)enable access to the site. The implementation of norms will incur substantial costs, which can even have liquidation character, and it may be necessary to block legal content situated on the internet site in addition to the gambling game. Furthermore, persons with superior IT skills will find ways of circumventing the blocking and the Act ought to set out in more detail the conditions of liability and the grounds for exemption from liability.
6. The applicant perceives the concept of blocking of unauthorised gambling games operated via the internet as unconstitutional censorship without the respective legal checks and balances—arbitrarily carried out by an executive body. The Act contravenes rights of freedom of expression and the right to access of information, both of which are protected by the Constitution as well as through international obligations, whereas the checks and balances contained in Art. 17(4) of the Charter cannot be applied to the regulation, as this is not the case of a legitimate provision necessary in a democratic society. The regulation does not have the capability of reaching its stated aims; the guarantees of fundamental rights and freedoms were meant to be parts thereof.
II. SUBMISSIONS OF INTERESTED PARTIES (INTERVENING), REPLY OF THE APPLICANT
7. In its submission, the Chamber of Deputies of the Parliament of the Czech Republic focuses on describing the legislative process. It discussed the draft of the Gambling Act as Parliamentary Press No. 578, which was proposed by the government of the Czech Republic and approved on 13 April 2016, whereas 149 out of the total of 175 present Members of Parliament voted in favour, 2 against. The contested provisions remained unamended as proposed by the government. The discussion in the Chamber of Deputies focused on the alternatives proposed by the government, in particular whether the decision making process of entering a site on the list of unauthorised online games ought to be entrusted to the Ministry with courts as a reviewing body in administrative proceedings or whether it ought to be entrusted to courts exclusively. Doubts concerning blocking were heard in the Chamber of Deputies—from ideological (matter of censorship) as well as technical (efficacy of the regulation) point of view. Professional public was invited to take part in the legislative process—representatives of betting agencies supported the possibility of blocking for they consider the preventing access to illegal operators to the market as a key issue. The Association for Internet Development took a negative stand particularly against the Ministry being entrusted with the decision making, which on the other hand emphasised higher costs and an increase in the workload of courts should the decision making be entrusted directly to them, whereas this solution would be detrimental to fast and effective blocking of illegal games.
8. The Senate of the Parliament of the Czech Republic submitted its submission on 12 October 2016. Having regard to the legislative process, it states that the draft Gambling Act was passed on to it by the Chamber of Deputies on 2 May 2016 and listed under Parliamentary Press No. 256 in the 10th term of 2014–2016. The Organising Committee instructed the Committee for Economy, Agriculture and Transport, as well as three other committees with discussing the draft Act. Neither the Guarantee Committee nor the Committee for Territorial Development, Public Administration and Environment adopted any decisions; the Constitutional Committee and the Committee for Education, Science, Culture, Human Rights and Petitions recommended the adoption of the draft in the wording as passed on by the Chamber of Deputies. Subsequently, during the 24th meeting on 26 May 2016, the Senate approved the draft in the wording as passed on by the Chamber of Deputies in a Decision No. 452. During the vote no. 48, 42 out of the 65 senators present expressed their approval with the draft; no one was against it.
9. In its Decision No. 1013 dated 17 October 2016, the government of the Czech Republic approved its entry into the proceedings in the sense of Section 69(2) of the Constitutional Court Act. As an intervening party, it proposes the rejection of the application in its submission dated 31 October 2016; it denies the claim of uncertainty of the term “internet connection provider”, for it is normally used in practice and the abstract approach is necessary due to the dynamic development of IT. The government understands the connection provider as a subset of providers of information society services in the sense of Section 2(a) and (d) of the Act No. 480/2004 Coll., on Information Society Services, as amended (“Act on Information Society Services”), and also points out their liability for content of information and Sections 3–6 of the same Act.
10. According to the government, the challenged regulation is to be interpreted restrictively: the responsibility for administrative offences relates directly to legal persons and physical persons carrying on a trade—entrepreneurs in the sense of Section 2(1)(b) of the Act No. 634/1992 Coll., on Consumer Protection, as amended (“Consumer Protection Act”), providing internet connection as a service. Apart from these, it only relates to the original provider; no responsibility is born by the recipient (user) of the service, even if it provides the service to other users. In combination with Section 9(3) of the Act on Information Society Services, the regulation applies to persons from other EU Member States providing connection in the Czech Republic.
11. The government further states that the term internet site is generally used as a synonym to webpage, that being so even in other legislation, for example in Section 7 of the Act on Business Corporations, Section 1830 of the Civil Code or Section 195(4) of the Act No. 280/2009 Coll., Tax Code, as amended (“Tax Code”). It is necessary to always take the specific address of the internet site as listed on the list; blocking will be applied to a domain of such order, so as to affect the least amount of other (legal) content and will relate exclusively to sites offering access to illegal gambling games and not those that only contain their advertisement. Regarding the entry on, as well as the erasure from the list, it shall be decided on in administrative proceedings by way of an administrative decision with the option to appeal. The obligation to block is then not imposed by the decision gaining legal force but at a later stage by publishing the address on the list, whereas every address on the list shall be listed with the exact time of publication, which starts the statutory period for blocking.
12. The government emphasises that the option of administrative proceedings with the possibility of judicial appeal was chosen after a careful consideration and in line with EU and international law. Due to the unreachability of operators with their seat abroad, blocking can be most effectively carried out by connection providers which have at their disposal tools for automatically monitoring changes on the list with which they are well acquainted due to them being experts in the given field. Regarding the nature of strict liability, the government points out the grounds for exemption from liability contained in Section 128 of the Gambling Act. The choice of a specific form of blocking is up to the provider itself, having regard to its effectivity and costs. The Act does not attempt to interfere with this choice.
13. According to the government the contested issue does not fulfill the basic definitions of censorship and does not interfere with the freedom of expression and right to information. If it embodies certain limitations, it does so in accordance with Art. 17(4) of the Charter. Unauthorised gambling games are a dangerous social phenomenon adversely affecting the lives of affected individuals, public health and threatens order and safety. The regulation holds true even in relation to the restriction of the right to carry on a business activity, it satisfies the requirements of Art. 26(2) of the Charter and the freedom to provide services in the sense of Art. 52(1) in conjunction with Art. 62 of the Treaty on the Functioning of the European Union.
14. In its additional submission delivered on 9 December 2016, the government carries out a comparison with the methods used abroad, as they came to light in the communication of the Ministry with the competent authorities of the other EU Member States, respectively the European Economic Area. Of the countries that provided the relevant information, the following have legislation that allows blocking of internet sites with unauthorised gambling games: Belgium, Bulgaria, Denmark, Estonia, Cyprus, Latvia, Lithuania, Hungary, Portugal, Slovenia and Spain; it is in the legislative process in Slovakia and Poland. France, Italy, Romania and Greece have a similar tool. The government further states that the powers of administrative bodies to decide on blocking are laid down by the legal systems of Belgium, Estonia, Cyprus, Latvia, Lithuania, Hungary, Portugal and Spain; the regulations proposed in Poland and Slovakia contain these as well. On the other hand, Slovenian legislation entrusts the decision making exclusively to courts following a proposal from an administrative authority. Other countries combine both methods, e.g. Denmark or Bulgaria. Only in Poland, the proposed legislation contains specific rules on how the blocking is to be carried out by the connection providers.
15. Pursuant to Section 69(3) of the Constitutional Court Act, the Public Defender of Rights stated that she does not make use of her right to join proceedings as an intervening party.
16. In its reply dated 14 November 2016, the applicant maintains its application and objects in addition to the interference with the protection of property rights pursuant to section 11(1) of the Charter. Above and beyond the assertions in the proposal, the applicant sees a deficit in the administrative proceedings involving the service of documents by way of a public notice. It stresses that the obligations are imposed on connection providers despite the fact that the wrongful activity is committed by the operators of the illegal gambling games.
III. LANGUAGE OF THE CONTESTED PROVISIONS
17. Provisions of Sections 82, 84 and 123(5) of the Gambling Act state:
s.82
Blocking of unauthorised online games
(1) Internet connection providers on the territory of the Czech Republic are obliged to prevent access to any of the internet sites included in the list of the internet sites with unauthorised online games (the “list of unauthorised online games”).
(2) Entered in the list of unauthorised online games shall be any internet site on which an online game is operated contrary to Section 7(2)(b).
(3) The internet connection providers are obliged to comply with the requirement as per the foregoing paragraph 1 within 15 days from the publication date of the internet site in the list of unauthorised online games.
s.84
List of unauthorised online games
(1) The list of unauthorised online games is maintained and entries in it decided on and made by the Ministry, by virtue of office.
(2) The list of unauthorised online games includes
a) The address of an internet site on which an online game is operated contrary to Section 7(2)(b);
b) The unique identifier of a payment account that is used for the purposes of operating an online game contrary to Section 7(2)(b); and
c) The date of entry and deletion of the data set out under the foregoing clauses a) and b).
(3) The Ministry shall forthwith delete an internet site or a payment account from the list of unauthorized online games as soon as the reasons cease for their entry in the list.
(4) Information from the list of unauthorised online games as per the foregoing paragraph 2(a) and (b) is published by the Ministry on its internet sites.
(5) Under the procedure according to paragraph 1, the document is served to the party of the procedure by means of public decree, while it is also sent for information to the party whose residence or registered office is known.
s.123
(5) Internet connection providers in the territory of the Czech Republic commit an administrative offence if they fail to take measures within the set term to prevent access to the internet sites pursuant to Section 82.
18. Provisions of Sections 82 and 84 are contained in Chapter II of Part Four of the Gambling Act governing remote access via the internet. In instances under Section 7(2)(b) the games “for which no license has been issued or that has failed to be duly notified under this Act” shall be entered on the list of unauthorised games (so called blacklist). The provisions of Section 123 are in Chapter II of Part Eight of the Gambling Act headed supervision and administrative offences. “A fine up to CZK 1 000 000 shall be imposed” for breaches referred to by paragraph 11 of the same Section.
IV. RIGHT TO INITIATE PROCEEDINGS AND ITS CONDITIONS
19. Pursuant to Section 64(1)(b) of the Constitutional Court Act, a group of at least 17 senators is entitled to lodge a proposal for annulment of an Act or its individual provisions. Therefore, the right to initiate proceedings is present as the proposal was lodged by 21 senators and in compliance with Section 64(5) the list of signatures, on which each of the senators individually confirmed the support of the proposal, was attached.
20. The proposal includes all legally required formalities, it is not inadmissible under Section 66 of the Constitutional Court Act and there are no grounds for stopping the proceedings pursuant to Section 67 of the same Act. The Constitutional Court ruled on the proposal without ordering an oral hearing because it did not undertake an inquiry and no clarification of the matter could have been expected from the hearing in the sense of the first sentence of Section 44 of the Constitutional Court Act.
V. LEGISLATIVE PROCESS OF ADOPTING THE CONTESTED PROVISIONS
21. In terms of Section 68(2) of the Constitutional Court Act, the Constitutional Court examined whether the contested provisions of Sections 82, 84 and 123(5) (Gambling Act as a whole) were adopted and issued within the bounds of constitutionally provided jurisdiction and in the prescribed manner. It came to the conclusion that it has no objections in this respect; the applicant, other parties or the intervener do not specify any deficits.
22. For reasons of brevity, the Constitutional Court refers to the legislative process, as described in the submissions of the Chamber of Deputies and the Senate of the Parliament of the Czech Republic, and adds the following: The Senate draft of the Gambling Act was distributed to senators on 28 August 2015 as Parliamentary Press No. 578 (7th election period as of 2013). The first reading took place on 30 September 2015, the draft was then assigned to the Budget Committee as a guarantee committee, which discussed it on 13 January 2016 and 18 February 2016 and issued a resolution delivered to senators as Documents No. 578/1 and 578/3. Furthermore, it was also discussed by the Committee for Public Administration and Regional Development, which issued a resolution on 5 February 2016 delivered to the Deputies as Parliamentary Press No. 578/2. The second reading took place on 1 March 2016 with amendments being processed as Parliamentary Press No. 578/4. The third reading took place on 13 April 2016 during the 44th meeting and the draft was approved by the Chamber of Deputies by Resolution No. 1155.
23. Upon approval by both houses of parliament, the Gambling Act was delivered to the President of the Republic on 1 June 2016 and was signed by him on 7 June 2016. It was then delivered for signing to the Prime Minister on 10 June 2016 and on 15 June 2016; it was promulgated in the Official Gazette—in the issue 71/2016, at page 2962 under no. 186/2016 Coll. The provisions of Sections 86–89, 91–92, 97–100 and 109–112 came into force upon its publication; the remaining provisions—including those that are now contested—came into force on 1 January 2017.
VI. SUBSTANTIVE REVIEW OF THE APPLICATION
24. The Constitutional Court concluded that the application is not justified.
25. The aim of the contested regulation can be described as follows: In contrast to standard (brick‐and‐mortar) establishments, gambling on the internet is (generally) much less controllable and more dangerous, that being so just simply because in the absence of effective regulation, players can connect to internet games virtually from anywhere, children or pathological gamblers can easily participate, and games are more rapid and involve higher amounts. Illegal gambling on the internet often evades any taxation both in the country of destination, where they are offered, as well as in the country in which they operate. By not being subject to regulation or taxation, they offer better odds (winnings), which are attractive for players and furthermore, there are no limits in terms of age, betting limits, etc. – the aim of the contested provisions is to prevent this.
26. Therefore, states choose probably the only effective (yet not perfect) solution, namely the blocking of access to internet sites on which illegal gambling is offered. Games of gambling are operated from remote foreign countries with those responsible being virtually unattainable (and inapprehensible) and therefore individual countries often take such measures so that the obligation to block access to objectionable webpages is imposed on the providers of internet connections, whose task is effectively to prevent its customers from accessing illegal gambling on the internet, but only exerting such effort and costs which may be reasonably expected from them.
27. The Constitutional Court approves certain aims of the legislations, namely the protection of the interests of the state budget, prevention of tax evasion and money laundering. The aims of the regulation were set in the draft Gambling Acts' explanatory memorandum (Parliamentary Press No. 578/0, 7th voting term as of 2013, Special section K, section 82, available at www.psp.cz, “Explanatory Memorandum”). It states, “8 companies with a license from the Ministry currently operate online gambling. The proposed legislation will allow legal access to the market to other companies from other EU Member States. At first glance, this could mean an increase in competition for existing operators. Given, however, that foreign companies already do business in the Czech market, albeit illegally, the impact on existing companies would be more positive, as it would level the playing field on the market, especially in the area of paying taxes.” The Explanatory Memorandum refers to opinions of experts who have quantified the annual tax loss due to illegal business of foreign online gambling operators in the amount of CZK 600 million (according to the Supreme Audit Office), respectively CZK 716 million (analysis of KPMG Česká republika s.r.o., cf. General part, sections 3.3 and 3.6 of the Explanatory Memorandum).
VI/a. Constitutionality of blocking online games
28. The Constitutional Court concluded that the contested provisions are not inconsistent with the constitutional order—neither Sections 82 and 84 of the Gambling Act containing rules on blocking illegal online gambling, nor the following provisions of Section 123 (5) of the Act defining the offense which internet connection providers commit if they do not adopt the necessary measures to prevent access to internet sites on which gambling is operated.
29. The task of the Constitutional Court is exclusively to review constitutionality and in this regard the concept of blocking illegal gambling offered on the internet stands. Said concept cannot be compared to the limits of restrictions on freedom of expression and the right to information under Art. 17(4), the right to do business within the meaning of Art. 26(2) and the protection of property rights under Art. 11(3) of the Charter. Ownership creates obligations, cannot be misused in contradiction with the law and the exercise of it must not endanger human health, which in the case of operation of illegal online gambling is happening, provided they are freely accessible to children or persons registered in the register of individuals excluded from participation in gambling pursuant to Section 16 of the Gambling Act. The protection by the mentioned constitutionally protected values cannot even be in favour of the operators of illegal gambling, because it is an illegal activity that threatens many important interests of society; moreover, it is often linked with serious criminal activities. The purpose of the contested Act is to protect social interests; it cannot be compared to internet censorship as (systematic) controlling or limiting disclosure of information—it consists of technical measures designed to prevent illegal activities and that must be used so as not to interfere with lawful internet content. Blocking is mainly carried out in accordance with the budgetary interests (“in a fiscal interest”) and justified by the fight against money laundering (so called predicative offense).
30. The above mentioned does not however change anything with regard to the obligation to ensure constitutional interpretation and application of the law in administrative proceedings for entering a specific internet site to the list of illegal gambling games and the possible review proceedings before administrative courts. Pursuant to the Gambling Act, blocking is possible only to the extent necessary and to the exclusion of interventions with other (legal) online content. In this context, the principle of subsidiary of decision‐making of the Constitutional Court applies, as well as the restraint and minimizing interference in the activities of other public authorities—if the contested provisions may be interpreted and applied in a constitutional manner, there is no need to repeal them for the reason of a conflict with the constitutional order.
31. In this context, one cannot overlook the relationship of the contested regulation with Section 252 of the Criminal Code, which governs the offense of unauthorised gambling operation. Whereas the concept of blocking illegal online gambling falls under the administrative branch regulation (combating) gambling and its purpose is primarily to effectively prevent access to it, the regulation of the Criminal Code establishes the subsequent punishment of these criminal activities, which applies to both individuals and legal persons in terms of the Act No. 418/2011 Coll., on Criminal Liability of Legal Persons and Proceedings Against Them, as amended. Given that under Section 252(1) of the Criminal Code, a person commits an offense if it “illegally operates, organises, promotes or facilitates gambling”, then in accordance with this provision, even sanctioning the internet connection provider, who is actively involved in spreading access to such a game is not excluded. The competent public authority should always consider whether it is appropriate to lodge a criminal complaint pursuant to Section 8(1) of the Criminal Procedure Code, particularly when it comes to intentional fault.
32. The Constitutional Court does not consider unconstitutional even the interpretation imposing an obligation to effectively prevent access to internet sites with illegal gambling to providers of internet connection rather than to the actual operators of the games. The reason for this is that illegal games are offered on a regular basis from (remote) foreign countries, in many cases intentionally or even only formally, precisely because operators are so difficult to reach by enforcement authorities of the state. Therefore, the legislator imposed an obligation to prevent access to harmful content to internet connection providers who can provide blocking the most effectively and are at the same time reachable for communication with administrative authorities regarding the effective application of the Act, as well as any penalties for violations. In relation to operators of illegal gambling, and in particular to providers of internet connection, on which the responsibility for blocking access is de facto transferred, there, however, must be such a form of a decision, which is subject to due review in the administrative courts, which is also the case of the contested regulation as is further elaborated.
33. For connection providers, there are prerequisites for continuous (automated) monitoring of changes in the list of illegal online gambling. The Ministry is obliged to provide them in this direction with effective support and assistance, which is indeed stated in the explanatory report, which stresses that the list must be kept in an electronic form allowing continuous remote access. Providers cannot be seen as entities responsible for the illegal operation of gambling, but at most as a part of the illegal state (see Special part to Section 82). The implementation of the law should not be linked to a greater administrative burden for providers, as after a certain stabilisation of the situation, it can be expected that the blocking will relate to tens or at most hundreds of internet sites on average in the long term (in this context, the Explanatory Memorandum states a total of 12 webpages are blocked in Denmark and approx. 180 in France). It shall be up to the individual providers to choose the most technically appropriate method of blocking.
34. The legislator did not step out of its constitutional framework of its activities even by setting the assumptions and grounds for exemption from liability (exemption from liability), as set forth in Section 128(1) and (3) of the Gambling Act. By its nature, it is a strict liability but not an absolute one (for the result) and the basic exemption ground is to exert every effort that can be (reasonably) expected from the connection provider. For the application of the exemption, specific steps of providers taken to prevent access to objectionable sites are decisive, as well as how demanding it is to circumvent the blocking and the adequacy of cost.
VI./b. Decision making by an administration authority and judicial review
35. The Constitutional Court does not see any inconsistency with the constitutional order even in the fact that the power to decide on the inclusion of specific internet sites on the list of illegal gambling is conferred by the Act on administrative authorities; it is done in administrative proceedings—the final decision is subject to a standard review, especially in administrative courts. Proper form and two‐stage administrative procedure, with subsequent judicial review is constitutional both in terms of protection of procedural rights of persons concerned, as well as in light of ensuring proper interpretation and application of the Act. A similar procedural approach—an administrative procedure with judicial review—applies in relation to operators of gambling games, respectively the holder of the domain and the entry of the internet site on the list (“normal” administrative proceedings), and subsequently to the provider of internet connection and to its liability for breach of duty in preventing access to sites on the list (delist proceedings that features some different procedural standards). Judicial review is an adequate safeguard of the legality of the procedure of administrative bodies in the implementation of the Act.
36. The chosen approach has better prerequisites of efficiency due to the enormous dynamism, which is typical of the world of the internet and the development of gambling. The decision‐making process of inclusion of internet sites on the list may be faster and more flexibly through administrative proceedings. In terms of compliance with the relevant procedural standards, the Constitutional Court finds no substantial difference in whether it is the Ministry that makes the decisions in the administrative proceedings or whether it is any other governmental body, e.g. Czech Telecommunication Office mentioned by the applicant. What is essential is that decisions on blocking are made by an administrative authority that possesses appropriate specialisations and the staff apparatus. In this context, the decision‐making by the Ministry is convenient also because the inclusion on the list and the deletion from it are directly linked to whether the license was granted for the operation of gambling games, or as the case may be whether the game was duly reported—and these actions fall within the competence of the Ministry.
37. The Explanatory Memorandum also compares various options of taking a decision regarding the entry of an internet site on the list of illegal games of gambling, whereas sees as the most appropriate the conferral of the decision‐making powers to the Ministry. It states that: “when considering the implementation of blocking measures, an essential aspect was the response rate, which was due to the fact that providers of illegal gambling games can use a variety of measures, which restrict or render impossible the possibility of the reaction of state authorities. (…) The choice of the solution that is based on the administrative proceedings by the Ministry of Finance in this area is not only efficient in terms of speed of implementation and updates, but also the least burdensome on the state budget, as it does not entail any additional cost to other state authorities” (general section, subsection 2.9.4, ad Option 2: Blocking Internet Connection).
38. Inconsistency of the Act with the constitutional order cannot be brought about even by the absence of detailed regulation of erasure from the list once the reasons for entry cease to exist. Whether this will be done informally, immediately after the grant of a license or the notification of a gambling game in accordance with Section 7(2)(b), or in full‐fledged administrative proceedings (as suggested by the government), the important thing is especially the fulfillment of the requirement of Section 84(3) of the Gambling Act, in other words that the erasure occurred immediately after the reasons for entry ceased to exist. Even in this case the administrative courts may be called upon to review the Ministry's process.
39. The Constitutional Court did not omit to discuss the modification of the administrative proceedings pursuant to Section 84(5) of the Gambling Act—documents are delivered to the applicant (the operator of an internet site with illegal gambling or the domain holder, if it is a different person) by a public notice, and if the address of residence or registered office is known to the administration authorities, then also to its attention there. In this regard, it is also necessary to take account of the specific nature of blocking of illegal gambling, where speed and efficiency is decisive.
40. If it is an entity with a known address—in the Czech Republic and abroad—it will learn about the steps taken in the administrative proceedings also by receiving a document to its address, even though legal effects are already established by the publication of the decree. In this context, it is necessary to appeal to the authorities to be active in identifying valid addresses of the parties and to send them the documents immediately following the announcement of the public notice; especially to those with a data box—which should be the primary method of communication of entrepreneurs with public authorities—this modification should not pose a threat to procedural rights. A consistent approach of administration authorities in delivering will in addition be subject to review by the administrative courts.
VI./c. Comparison with foreign and EU law
41. For the sake of completeness the Constitutional Court states that it is clear from the documents that had been submitted in the proceedings that the concept of blocking access to internet sites on which illegal gambling is operated is fairly common in other EU Member States or the European Economic Area bringing together the Member States of the European Union and the European Free Trade Association (with the exception of Switzerland). Without the need to perform more detailed analysis (or even carry out evidence), it can be stated, based on the submission of the parties and the search carried out by Analytical Department of the Constitutional Court, that blocking internet sites containing illegal games of gambling was introduced into the legal systems by e.g. Belgium, Bulgaria, Denmark, Estonia, France, Italy, Latvia, Lithuania, Hungary, Portugal, Romania, Greece, Slovenia and Spain; Slovakia and Poland are in the legislative process.
42. On the other hand, blocking is missing for example in Croatia, Ireland, the Netherlands and in the United Kingdom, while it is superfluous in other countries due to the state monopoly on gambling (Finland, Sweden). In Germany, the objects are so‐called state treaties between all the federal states; the concept was included in the previous version of the source of law but was subsequently released, not only due to doubts whether its implementation can be fairly transferred to internet connection providers. In Austria, blocking is concerned exclusively with violations of intellectual property rights. Blocking is decided upon in administrative proceedings for example in Belgium, Estonia, Italy, Latvia, Lithuania, Hungary, Portugal and Spain; same process should be adopted in Poland and Slovakia. On the other hand, blocking is carried out exclusively in the competence of courts, which decide on the basis of an administrative authority in Slovenia. Both concepts are combined in the legislation of Bulgaria, Denmark and France.
43. The European Union law contains blocking of illegal content in the Regulation of the European Parliament and Council (EU) 2015/2120 dated 25 November 2015 establishing measures concerning access to the open internet. In paragraph 13 of the Preamble, it states the permissible limit of the access to the open internet in cases covered by “generally applicable national measures, judicial decisions, decisions by public authorities of competent jurisdiction or other measures to ensure compliance with EU legislative acts or national law (for example the obligation to comply with decisions of the courts or public authorities requesting to block illegal content).”
44. More detailed regulation is contained in Art. 3 of the above Regulation. Specific practices in the fight against illegal gambling are left by the EU to Member States and focuses instead on aspects related to the free movement of services within the meaning of Art. 56 et seq. of the Treaty on the Functioning of the European Union and protection of participants of games as consumers. These are mainly addressed by the Commission Recommendation 2014/478/EU dated 14 July 2014 on the principles of protection of consumers and players of online gambling services and those of preventing minors from online gambling. Paragraph 5 of the Preamble refers to the lack of harmonisation on the EU level and that Member States are required to establish their own policies on gambling and consumer protection standards. They can restrict the cross‐border provision of online gambling services based on public interest objectives, but they are obliged to ensure the appropriateness and necessity of the measures and consistently and systematically promote public interest objectives. In paragraph 15 of the Preamble, the Commission puts emphasis on providing information about online gambling for the prevention of mental disorders, in particular to prevent minors from accessing gambling and discourage consumers from using illegal offers. In paragraph 17 of the Preamble, the Commission requires Member States to crack down effectively on illegal operations of online gambling services; Art. X then calls upon Member States to set up regulatory authorities to effectively monitor and ensure compliance with national measures for regulating gambling services offered online.
45. Further applicable standards are included in the Directive of the European Parliament and Council 2000/31/EC dated 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the internal market (“Directive on electronic commerce”). Even though it excludes gambling games from its scope, it can be referred to in respect of general liability of intermediary service providers for information transfer; according to Art. 12(3) Member States are authorised to incorporate into their national law the powers of the judicial or administrative authorities requiring the service providers to end infringement of rights or to prevent such infringement. For the sake of completeness the Art. 11 of the Council of Europe Convention on the Manipulation of Sport Competitions, which was approved on 9 July 2014 and is in the ratification process, should also be mentioned. Pursuant to this Article, contracting states are obliged to adopt the most appropriate means to combat illegal sports betting operators and adequate measures involving, among others, restricting remote access (via the internet).
46. The Court of Justice expresses its opinion on blocking illegal online gaming only in general terms, yet it is still clear, however, that it accepts concepts similar to those which have been introduced into Czech law. In its judgment C‐42/07 Liga Portuguesa de Futebol Profissional dated 8 September 2009 (all of the decisions listed here are available at http://curia.europa.eu), the court stated that the freedom to provide services does not preclude the Portuguese legislation which prohibits the offering of gambling games via the internet on its territory to operators established in other Member States and legally provide similar services there. The court pointed out the specific character of offering gambling games via the internet and justified the limitations in Portugal by combating fraud and crime; it took into account that the online gambling industry is not harmonized on the EU level and that, as opposed to traditional markets, it entails different and more substantial risks (paragraphs 69, 70 and 72). In its decision C‐203/08 Sporting Exchange dated 3 June 2010, even approved the legislation of the Netherlands, which makes organizing and promoting gambling games exclusive in favour of a single operator for a specific gambling game and prohibits all others from offering this service via the internet, including those from other Member States.
47. The decision C‐314/12 UPC Telekabel Wien dated 27 March 2014 was concerned with a specific Austrian legislation on blocking of internet sites with content that violates copyright, its conclusions, however, are also applicable to the present case. The Court concluded that the fundamental rights recognised by EU law do not preclude the prohibition of internet connection providers—in the case of Austria via a court order—from providing customers with access to webpages which include protected materials made available online without the consent of copyright holders. UPC Telekabel Wien could have been ordered to block its customers from accessing webpages on which illegally “downloaded” films produced by Constantin Film Wega were located. The Court further explained that for the purposes of blocking, it cannot be authoritatively determined what measures the internet connection provider has to adopt—it is solely the choice of the provider, which also must be able to free itself from liability if it proves that it has taken all reasonable measures which do not disproportionately restrict access to other (legal) information.
VI./d. Objection of uncertainty of the regulation
48. The applicant sees the unconstitutionality of this Act in that it does not properly define the terms “internet connection provider” and “internet site”. Furthermore, the Act does not make it clear whether to block a domain address as a whole (i.e. URL) or a domain name of the second or lower order, how should the list of banned online games be made available and to what extent will the active cooperation of providers of internet connection be required.
49. The contested regulation does not show such a degree of ambiguity or uncertainty so as not to fulfil the basic requirements of legal certainty and predictability, as required by the settled jurisprudence of the Constitutional Court—cf. for example the decisions dated 13 May 2014 file no. II. US 3764/12 (N 91/73 SbNU 517), dated 3 June 2009, file no. I. ÚS 420/09 (N 131/53 SbNU 647), dated 15 February 2007 file no. Pl. US 77/06 (37/2007 Coll., N 30/44 SbNU 349), dated 20 September 2006 file no. II. US 566/05 (N 170/42 SbNU 455), or that dated 21 January 2003 file no. Pl. US 15/02 (40/2003 Coll., N 11/29 SbNU 79). The task of the Constitutional Court is not to replace the activities of the competent public authorities and to authoritatively interpret legal terms of internet connection provider or an internet site; it certainly is not competent to anticipate partial aspects of application, such as at what domain name level should webpages be blocked or how the list of unauthorised games will work, what cooperation may be required from the internet connection providers or what method of blocking should be selected.
50. The alleged deficits of the adopted regulation and the terms used clearly fall short of constitutional relevance. Moreover, it is a misconception that casuistic regulation will solve everything—the opposite is true: the more detailed the regulation, the more room for obstructions and circumventing the law. In this context, it can also be emphasised how the government (the processor of the Bill) interprets the contested provisions in its submission. It perceives the term internet connection provider as a sub group (sub‐category) of providers of information society services within the meaning of Section 2(a) and (d) of the Act on Information Society Services.
51. The scope of responsibility for the administrative offense for preventing access to objectionable webpages is applied by the government strictly only to entrepreneurs within the meaning of Section 2(1)(b) of the Consumer Protection Act, who provide internet connection as the object of their business activity. In other words, if a person is the recipient of the internet connection service, and the faults occurred on the part of the supplier, such person is absolved from liability for an administrative offense, even if it would subsequently provide the connection (with deficient blocking of illegal gambling games) in the course of its business to other users.
52. Blocking should apply only to internet sites that provide access to illegal gambling games, not those containing only advertising of illegal gambling games. Regarding foreign entities, the government states that the responsibility for blocking access to illegal gambling games pursuant to Section 9(3) of the Act on Information Society Services also applies to foreign persons providing connection in the territory of the Czech Republic, including those from other EU Member States, for example via satellite or internal networks of multinational corporations. The Constitutional Court stated that even if it would be more difficult to enforce the legislation against foreign connection providers, it would only affect a minor group of users, because (for example) connection via satellite is quite expensive and networks of multinational corporations used by their employees are subject to the internal mechanisms of control that prevent participation in gambling games typically much more efficiently than national supervision activities.
53. Not even the concept of an internet site brings the legislation in conflict with the constitutional order for reasons of uncertainty. In its submission, the government puts the term on a par, regarding its meaning, with the (more accurate) term website noting that the expression website is used for example in Section 7 of the Act on Business Corporations, Section 1830 of the Civil Code or Section 195(4) of the Tax Code. Regarding the doubts about the level of blocking, i.e. whether the whole domain name (e.g. www.hry.cz) will be affected or only a second or lower order (e.g. www.hazard.zabava.eu), such requirement cannot be generally defined; on the contrary, such a detailed regulation would probably be proved inoperative. Pursuant to the government, address of such a domain order shall be added to the list on a case by case basis, which will fulfil the requirement of effective prevention of access to the illegal game, while minimising interference with other (legal) content. The Act, however, does not take into account other ways of remote access to gambling games than through the internet, for example through mobile phone applications.
54. The absence of detailed regulation on the availability of the list, mandatory cooperation of the providers or the specific method of blocking is also constitutionally irrelevant. Moreover, as the court emphasised in the judgment UPC Telekabel Wien, the choice of specific and effective methods of blocking cannot be decided in their stead but rather must be their choice in terms of efficiency and cost optimisation. The grounds of exemption from liability contained in Section 128(1) of the Gambling Act are also in line with the requirements of the Court of Justice.
VII. CONCLUSION
55. Based on the reasons stated above, the Constitutional Court came to the conclusion that the contested provisions of Sections 82, 84 or 123(5) of the Gambling Act are not inconsistent with the Constitution and there are no reasons for their annulment. Therefore, the application is not justified and pursuant to Section 70(2) of the Constitutional Court Act, the Constitutional Court rejects it.
In Brno on 14 February 2017
Pavel Rychetský
President of the Constitutional Court