TO BE OR NOT TO BE? Order of the President of ONJN no. 86/2021 and the European Commission Notification
By Teodora Luca
Luca Mihai Cătălin Law Office
An unusual topic seems to arouse interest in the field of gambling in recent weeks, after the publication in the Official Gazette, on June 30, 2021 of the Order amending and supplementing the annex to the Order of the President of the National Office for Gambling no. 404/2020 on the approval of the Minimum Technical Conditions for verifying the means of gambling: did the Romanian State fail to notify the European Commission of the adoption of a draft normative act containing a technical regulation, with the consequence of its non-application?
Of course, the interest of gambling organizers in any regulation of the activity can be easily understood, while the issue of notification to the Commission and the difficulties of interpretation (and application) of Directive 2015/1535 are a challenge for lawyers.
According to the provisions of art. 5 para. 1) in Directive 2015/1535, Member States shall immediately communicate to the Commission any draft technical regulation, unless only the text of an international or European standard is fully transposed, in which case information on that standard is sufficient; they shall also submit to the Commission a statement of the reasons why such rules need to be adopted if those reasons have not been sufficiently clarified in the draft technical regulation.
Has the Romanian State therefore failed to notify the European Commission of the draft normative act by which a technical regulation is adopted, and this makes the amendments and completions adopted by Order 86/2021 inapplicable?
We have also tried to answer this question by examining the provisions of Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 on the procedure for providing information in the field of technical regulations and rules on information society services and the case law of the Court of Justice of the European Union.
“Technical regulation” is defined in the Directive as a technical specification or other requirement or rule concerning services, including relevant administrative provisions, the observance of which is mandatory, de jure or de facto, in the case of marketing, the provision of a service , the establishment of a service operator or use in a Member State or a significant part thereof, and the laws, regulations or administrative provisions of the Member States, (…) which prohibit the manufacture, import, marketing or the use of a product or prohibiting the provision or use of a service or the establishment as a service provider.
The CJEU has constantly clarified in its case law the notion of “technical regulation”, stating that it includes four categories of measures, namely, firstly, “technical specification”, secondly, “other requirements”, thirdly , “Rules for services” means, fourthly, “the laws, regulations or administrative provisions of the Member States which prohibit the manufacture, import, marketing or use of a product or which prohibit the provision or use of a service or the establishment of a service provider. services ”within the meaning of Article 1 (11) of the same Directive (Case C-137/17 Van Gennip and others EU:C:2018:771).
In order for a national measure to fall within the scope of the first category of technical regulations referred to in Article 1 (1) (c) of Directive 2015/1535, namely the concept of “technical specification”, that measure must relate in a necessary for the product or its packaging as such and therefore establish one of the characteristics required of a product (see, to that effect, Case C299 / 17 VG Media from September 12, 2019, EU:C:2019:716 paragraph 26 and the case-law cited).
According to the provisions of art. 1 point c) of Directive 2015/1535:
“Technical specification” means a specification included in a document that sets out the characteristics of a product, such as quality, performance, safety or dimensions, including the requirements that apply to the product under the name under which it is marketed, terminology, symbols, tests and test methods, packaging, marking or labeling and conformity assessment procedures.
It should be noted in that regard that, in order for a national measure to fall within the scope of the first category of technical rules laid down in Article 1 (3) of Directive 98/34, namely the concept of “technical specification”, that measure must be necessarily refers to the product or its packaging as such and therefore sets out one of the characteristics required of a product (Decision from July 19,2012 Fortuna and others C-213/11, C-214/11 și C-217/11, EU:C:2012:495, paragraph 28, and the case-law cited).
From the settled case-law of the CJEU (Decision from April 21, 2005, Lindberg, C267/03, Rec., pg. I3247, point 54 and Decision from November 8, 2007, Schwibbert, C20/05, Rep., pg. I9447, point 34) it appears that the notion of “technical specification” implies that the national measure necessarily refers to the product or its packaging as such and therefore establishes one of the characteristics required of a product.
Therefore, not every description of a product is a technical specification within the meaning of the Directive, the subject of which is the legislative measures governing the essential conditions of a product, namely those defining technical properties, without which the product could not be accepted on market.
TO BE OR NOT TO BE? Order of the President of ONJN no. 86/2021 and the European Commission Notification
Contrary to appearances, although it modifies and completes the Order of the President of ONJN no. 404/2020, the provisions of Order 86/2021, the amendments do not concern the characteristics of the products (slot machines), but regulate general objectives to be pursued in the technical verification activity, without necessarily referring to the product concerned ( means of play) or its packaging, and therefore does not change the technical parameters of the product.
If regarding art. 1 point 1 of the Order, there is no suspicion that it would regulate the characteristics of the products (as it expressly and unequivocally regulates the services provided by conformity assessment bodies, without making a change in the meaning and purpose of the initial regulation), the additions introduced in Order 404/2020 according to art. 1 point 2) of Order 86/2021 include only the general objectives to be pursued in the technical verification process.
In the analysis it is relevant that the provisions introduced by Order 86/2021, do not define technical standards or essential conditions for the operation of gambling, whose non-compliance would lead to their impossibility to use, which is unequivocal even in the manner in which the rule is drafted.
By way of example, from the analysis of the provisions of art. 7.4.3.3. it follows that the legislator has provided an alternative condition (if lending is allowed through REMOTE type credit systems, (…), the connection of the external system to the EGM and to the centralized computer system of the organizer will be ensured), and cannot be appreciated that this is a technical standard of operation of the game medium, as long as the requirement is not mandatory and the manner in which the connection must be made is not provided. Moreover, the condition of connecting the means of play to the centralized computer system is provided in the higher normative acts, previously notified to the Commission.
In other words, the game may be subject to technical verification and, subsequently, authorization, even if this condition is not met, ie the game would not allow lending through REMOTE credit systems.
Given the alternative nature of the regulation and the absence of any sanction in case of non-compliance, the requirements inserted by Order 86/2021 do not represent essential features (technical characteristics) of the means of play and therefore do not represent a technical specification within the meaning of Directive 2015/1535.
Furthermore, the concept of “other requirements” within the meaning of Article 1 (4) of that directive covers the life cycle of a product after its placing on the market (Decision from February 4, 2016, Ince, C-336/14, EU:C:2016:72, paragraph 72).
As regards the concept of ‘other requirements’ within the meaning of Article 1 (1) (d) of Directive 2015/1535, it must be borne in mind that that concept refers to a requirement other than the technical specification imposed on a product for the purpose of protection in especially to consumers or the environment and which affect the life cycle of the product after its placing on the market, such as conditions of use, recycling, reuse or disposal, where such conditions may significantly affect the composition or nature of the product or its marketing.
Normative acts that constitute conditions that may significantly influence the nature or marketing of the product in question will be included in this category.
Given that the requirements aim at the objectives of the technical verification activity, without establishing interdictions, direct or indirect in the exploitation of the means of play in case of non-compliance, the Order could not be assimilated to the notion of “other requirements”.
In other words, if the means of play were not equipped, for example, with REMOTE-type credit systems or non-cash credit systems, the hypothesis would not lead to the impossibility or limitation of its operation and, consequently, the rule would not is subject to notification, by reference to the definition of “other requirements” in the Directive.
In the same sense are the additions brought to art. 7.4.4. para. ii) of the Order, which establish the security objective in the case of the use of credit systems by means of cards, a standard necessary for the security of transactions, without limiting, from a technical point of view, the manufacturer’s options and without affecting the exploitation of the game. that this payment option is not available.
The same reasoning can be transposed in the case of all additions to Order 404/2020, none of the conditions being provided under the sanction of impossibility to market or use the product.
Nor the modification of art. 11.4 of Order 404/2020, does not impose prohibitions that would limit the marketing or use of the product or the provision of the service, which would lead to the application of the Commission’s notification procedure.
If in the initial version, art. 11.4 required conformity assessment bodies to directly perform the number of games in order to reach the value of the theoretical percentage of gains at a confidence level of 95%, (Verification of operation according to the statements in the previous point is performed by performing the number of games declared by the manufacturer reaches the PTC value at the 95% confidence level (Verification is performed for all game programs / subprograms installed on the EGM), in the modified version the verification performed by the conformity assessment bodies which reaches the value of the technical percentage of gains at the 95% confidence level (Functional verification, according to the declarations in sub-paragraph 11.3, may be performed on the basis of the earnings allocation tables and the statistical calculation used by the conformity assessment bodies or on based on the number of games declared by manufacturer for which the value of the theoretical percentage of gain (PTC) is reached at a confidence level of 95%. Verification is done for all game programs / subprograms installed on EGM.).
In other words, the text allows the conformity assessment body to establish the applicable procedure (Verification of operation, according to the statements in sub-paragraph 11.3, can be performed…), nothing in the way the legal text is drafted and cannot be interpreted as meaning that it would prevent conformity assessment bodies from directly achieving the number of games where the PTC value is reached at the 95% confidence level or hindering the provision of assessment services.
As regards the category of “rules on services”, it should be noted that it is apparent from point 1 (d) of Annex I to Directive 2015/1535 that “electronic games made available in a specialized club in the physical presence of the customer’”, like the bets made available through the terminals, is a service that is not provided “remotely”.
However, the classification as “rules on services” in Article 1 (1) (e) of Directive 2015/1535 in conjunction with Article 1 (1) (b) of that directive presupposes, inter alia, the existence of a remote service, which is obviously not the purpose of regulating Order 86/2021.
Although the arguments in favor of excluding Order 86/2021 from the scope of Directive 2015/1535 are consistent, the debate seems far from over. Despite the controversy, the Order will continue to take effect until a decision to the contrary by the national courts.
However, its effects, as well as the effects of Order 404/2020, are limited and rather have the role of preparing the industry for adapting the means of play to the new requirements, given that, until the expiration of the term provided in art. II (12 months from the date of approval of the accreditation scheme of the national accreditation body, but not more than 24 months from the adoption of Order 86/2021), the previously provided procedures will continue to be applicable.
These procedures and their legal regulation could themselves be the object of a legality analysis, from the perspective of art. 19 para. 6) of the Government Emergency Ordinance no. 77/2009 on the organization and operation of gambling (For the first year of application of this emergency ordinance, the technical control of machines, installations, devices, gambling tables and other means of gambling will be carried out according to the technical norms in force at the date of this emergency ordinance, and at the tariffs practiced by the Romanian Bureau of Legal Metrology on the same date.), considering that the application term has expired since 2016.
However, these norms are not the subject of the present research, and we will analyze them separately in another issue of the journal.
TO BE OR NOT TO BE? Order of the President of ONJN no. 86/2021 and the European Commission Notification
By Teodora Luca
Luca Mihai Catalin Law Office
