A large group of defendants, including Gambelli, was criminally prosecuted in Italy for organizing Internet sports betting operations in violation of Italian law, under which no license can be granted (with a few exceptions, not relevant here) for the taking of bets.However, Article 43 of the EC Treaty (the treaty establishing the European Community) prohibits restrictions on the freedom of establishment (i.e., the business activities) of nationals of a Member State in the territory of another Member State, and Article 49 EC prohibits restrictions on freedom to provide services within the Community in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended.
The investigating judge at the Tribunale di Fermo, having found that defendants engaged in the prohibited bookmaking activity, made an order for provisional sequestration of defendants’ data transmission centers. Defendants were also subject to searches of their persons, businesses, homes and vehicles.
The defendants in the main proceedings brought an action for review before the Tribunale di Ascoli Piceno against the orders for sequestration. The Tribunale di Ascoli Piceno referred to the Court of Justice the question whether Articles 43 and 49 of the EC Treaty are incompatible with the Italian domestic legislation prohibiting the taking of bets.
The ECJ ruled that national legislation which prohibits, by criminal penalties, the collecting, taking, booking and forwarding offers of bets on sporting events, without a license or authorization from the Member State concerned, constitutes a restriction on the freedom of establishment and the freedom to provide services provided for in Articles 43 and 49 EC respectively. However, it is for the national court to determine in the first instance whether such legislation actually serves the aims which might justify it, and whether the restrictions it imposes are suitable and proportionate in the light of those objectives. The Court pointed out that in previous cases restrictions on gaming had been accepted based on justifications such as consumer protection, the prevention of both fraud and incitement to squander on gaming, and the need to preserve public order.