The Constitutional Court found no 62 / 2018 Coll.
The Constitutional Court found on 30 January 2018 sp. zn.
Valid
62
FIND
The Constitutional Court
On behalf of the Republic
On 30 January 2018, the Constitutional Court decided, under sp. zn. Pl. ÚS 15 / 15, in plenary composed of the President of the Court of Pavel Rychetský and Judges Josef Fial, Jan Filip (Judge Rapporteur), Jaromír Jirsa, Tomáš Líčník, Vladimir Sládeček, Radovan Suchánek, Vojtěho Šimíček, Milady Tomková, David Uhlír and Jiří Zemánek, on the proposal of the Regional Court in Plzen to declare unconstitutionality § 41b (2) and (4) and § 41c (g) of Act No. 202 / 1990 Coll., on lotuses and other similar games, in force until 31 December 2015, with the Parliament of the Czech Republic and the Senate as parties to the Czech Republic.
as follows:
Motion denied.
Reasons
Subject matter
1. The Regional Court in Pilsen ("the appellant"), acting on behalf of the President of its Chamber 30 Af JUDr. Petr Kitchenka, submitted to the Constitutional Court by its Resolution of 3 July 2015 No 30 of Af 58 / 2012-82 an application for annulment of Sections 41b (2) and (4) and 41c (g) of Act No. 202 / 1990 Coll., on lotteries and other similar games, as amended by 31.12.2015 (hereinafter referred to as "the Lottery Act").
2. The applicant submitted this proposal after having concluded, in the context of its decision-making activities in the case under sp. zn. 30 Af 58 / 2012, in accordance with Article 95 (2) of the Constitution of the Czech Republic (hereinafter referred to as the Constitution), that the contested provisions are contrary to Articles 1 and 26 of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as the Charter).
Proceedings before administrative authorities and administrative courts
3. The subject-matter of the proceedings before the financial authorities was the application by SLOT Group, a.s. ("the applicant ') to reduce the advance on the levy on lotteries and other similar games for the first quarter of 2012. In the request, she requested that the advance be humiliated by the so-called fixed part of the levy because she considered it unconstitutional. By Decision of 22 June 2012 No 206389 / 12 / 128960403016 of the Tax Office in Karlovy Vary did not comply with its application and stated that the possible speculative considerations on the unconstitutionality of individual and explicit provisions of the laws should be rejected until such provisions are repealed.
4. The applicant appealed against this decision, which was rejected by the Financial Directorate in Pilsen by Decision No 6681 / 12-1400- 403207 of 19 October 2012.
5. The applicant then brought an administrative action against the latter decision. The appellant agreed with its argument on the unconstitutionality of the contested provisions, suspended the legal proceedings and submitted to the Constitutional Court, pursuant to Article 95 (2) of the Constitution and Article 64 (3) of Law No 182 / 1993 Coll., on the Constitutional Court, as amended, a motion for their annulment (see, for example, paragraph 22).
Recital of the proposal
6. According to the appellant, the contested provisions of the lottery law infringed the constitutional principle of equality in rights enshrined in Article 1 of the Charter, resulting from the requirement to exclude arbitrariness in distinguishing entities and their rights. This breach should have been so that, for a part of the taxpayers, the lottery levy under § 41 of the Lottery Act, namely the operators of winning gaming instruments and other technical gaming equipment, was determined by the Act by a different set of sub-bases. According to Section 41b (2) of the Lottery Act, the subset of the contribution was made up of a proportional and fixed part for that group of operators. It was only the players of the winning gaming instruments and other technical gaming devices that were responsible for this fixed part. In this context, the appellant points out the finding of the Constitutional Court of 18.8.2004 sp. zn. Furthermore, the appellant referred to the conclusions contained in the judgment of the Supreme Administrative Court of 22 May 2008 No 9 Afs 195 / 2007-120, where the Court of First Instance, in support of the case law of the Constitutional Court on the principle of equality, pointed out that, although the postulate of equality does not imply a requirement of general equality between everyone and everyone, it implies a requirement of the exclusion of libel and a requirement that the law "does not, without justification, favour or disadvantage one before others. In the present case, it is common ground that the requirement to grant the same rights under the same conditions without undue differences is not respected by the complainant's interpretation, since the complainant has significantly disadvantaged one group in the same field of activity and with the same right of business'.
7. From that case-law, the appellant concludes that the legislation establishing the inequality of legal entities can be constitutionally conformal only if it pursues a legitimate objective and the inequality is rational in relation to the purpose of the law. That is not the case for the contested provisions. According to the applicant, there is no legitimate and rational reason for introducing a fixed part of the sub-base of the levy for a part of the lottery operators. This is not evident either from the text of the law or from the course of the legislative process, nor from the reasoned report to the law by which the contested provisions were inserted into the lottery law. According to the applicant, the irrationality of the introduction of the so-called fixed part of the levy supports its contradiction with the subject matter of the levy on lotteries and other similar games. This subject is the operation of lotteries and similar games under Section 41a of the Lottery Act. However, the so-called fixed part of the levy depends only on the number of days in which the operation of the gambling instruments was authorised and not, therefore, when the instruments were actually operated. The actual operation of the gaming instruments is charged by determining the proportion of the sub-base of the levy. The so-called fixed part of the levy cannot therefore be the subject of a levy on lotteries within the meaning of the lottery law, since it does not charge for the operation of lotteries, but only for the authorisation to operate them. In addition, similar technical installations affected by this inequality can be found for other types of lotteries, such as the so-called lottery betting terminals.
Observations of the parties
8. The Judge-Rapporteur, pursuant to Article 42 (4) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended by Act No. 77 / 1998 Coll., sent a motion for observations to the parties and asked the Government and the Ombudsman whether they would exercise their right to intervene.
9. For the Chamber of Deputies of the Parliament of the Czech Republic ("the Chamber of Deputies"), its President Jan Hamáček, who briefly described the procedure for the adoption of Bill No. 458 / 2011 Coll., on the amendment of laws related to the establishment of one collection post and other changes to tax and insurance laws. He recalled that the fixed part of the sub-base of the payout from the gaming instruments and other technical gaming equipment was not part of the original government proposal submitted to the Chamber of Deputies, nor was it added to it in the Chamber of Deputies. Only after the bill was returned to the Chamber of Deputies by the Chamber of Deputies of the Parliament of the Czech Republic ("the Senate '), the Chamber of Deputies accepted the Senate amendments.
10. On behalf of the Senate, his chairman Milan Štět commented on the proposal on 10. 8. 2015. He described in detail the legislative process of adopting the contested legislation and the aspects to which both the committees and the Senate plenary focused. The Senate plenary discussed this bill on 8 November 2011, after which it decided to return it to the Chamber of Deputies with the amendments adopted. She agreed with the Chamber of Deputies on 20 December 2011.
11. In particular, the President of the Senate stated that a wide-ranging discussion was held when discussing the draft law concerning the provisions under appeal. In principle, the committees, whose conclusions were subsequently taken over by the plenary, agreed that the change in the lottery law should be given particular attention to making the contributions from "gambling" tax-manageable and be collected including advances. The distribution of the levy, as approved by the Senate, was then based on the fact that more than two thirds of the amount of the levy would form contributions from the winnings and video terminals, and that these are the facilities and gambling facilities that have the greatest impact on municipalities, security and public order.
12. The Government made use of the option provided for in Article 69 (2) of the Constitutional Court Act and entered the proceedings as an intervener. On 19 August 2015, Mgr. Jiří Dienstbier, who sent a statement to the Constitutional Court, stating that the appellant, when objecting to inequality, completely omitted that technical games are significantly different from other games, both in its intrinsic position on the market and in its impact on society and players themselves, particularly when it comes to harmful consequences in the form of pathological gambling addiction and crime.
13. The Government's statement also contains a detailed categorisation of the different types of games and an explanation of their specific principles, which are very different for each game, resulting in different impacts on society and players. The important point in this is, for example, whether the prize is money or material prizes, whether the game evaluation takes place immediately or only after a certain time period (waiting for the draw), whether the game interacts with other people (operator, opponent), whether the win depends only on the chance or even the skills of the player etc. For games based on chance, a major factor is the subjective perception of chance by the player and for certain types of games, such as the technical games, the player gets the feeling that the probability of winning can affect the game itself, because more games played mean a greater chance of winning the absolute. Technical games call expression the most dangerous, which results from the principles of their playing. In their case, the game is about money, the game is evaluated and the payout takes place immediately, the game does not depend on interaction with others, the winning factor is just a coincidence and this type of games is widely extended and easily available in the Czech Republic. According to the Government, expert studies conclude that technical games in society are most harmful, which results from the very principles of their playing, mainly because of the high risk of developing or deepening other socially pathological phenomena. According to the study prepared for the Office of the Government of the Czech Republic, the players of these games account for 83% of persons treated for pathological gambling in 2013. For 56.3% of players, according to the technical game, they are the first meeting with gambling. The development of addiction by expression helps to conclude that technical games give players the illusion of decision on the ability to influence the win. According to other expert studies, pathological players have a higher tendency to steal and a higher risk of committing or attempting suicide. Playing technical games is an important indicator of whether or not a particular person is a problem player. Moreover, patological gambling tends to spread in society, as persons who come into frequent personal contact with a pathological player have a higher risk of becoming one. An important factor for assessing technical games is their expansion. Deposits account for up to 61% of all deposits in gambling. For example, deposits in so-called live games, which are harmful to the notional second place, represent only 6% of all deposits in gambling. It follows from all the above, according to the Government, that there are significant differences between technical games and other types of gambling which justify different rules governing the operation of such games. Thus, such a distinction is not an arbitrary legislator, but has legitimate and rational reasons. According to the Government, the distinction between gambling is also in line with the case law of the Court of Justice of the European Union ("the Court '), whose legal opinion was expressed in Berlington Hungary and Others (C-98 / 14, EU: C: 2015: 386).
14. To the appellant's objection that the so-called fixed part of the levy is not derived from the subject of the levy on the operation of the equipment, the Government notes that, pursuant to Paragraph 4 (3) of the Lottery Act, the operation is an activity aimed at putting the lotteries and other similar games into service, including brokering, organisational, financial, technical and other services related to the operation of these games, and their proper termination and billing. The operation of lotteries shall also mean the pursuit of all other activities imposed on the operator by other legislation. It follows that the concept of operation cannot be understood only in the narrowest sense, i.e. as a state where the equipment is switched on, but also all activities related thereto. The Government states that according to the legal definition of the installation is operated on the dates on which its operation is permitted. The reason for adjusting the payment calculation according to the number of days in which the operation of the installation is permitted is a rational simplification of the tax administration, both for the tax administrator and for the tax entity. In the adjustment preferred by the appellant, the entire tax procedure would be administratively very difficult. The choice between the two interpretations is a matter of choosing an appropriate substantive solution. However, the question of suitability, according to the Government, does not overlap with the question of the constitutionality of the regulation. Both possibilities of adjustment are within constitutional limits. The Government recalls that the case law of the Constitutional Court gives the legislator wide scope to decide on the subject matter, extent and extent of taxes. Even a solution that seems irrational, according to the Constitutional Court, is not necessarily contrary to constitutional order.
15. Furthermore, the Government does not agree with the argument comparing the technical game affected by the contested adjustment with the lottery betting terminals. The principles of these types of gambling differ significantly. The betting terminals register players for the game, the result of which is determined in time and usually elsewhere. Moreover, these devices are usually not controlled by a player who merely gives instructions to their operator.
16. On the contrary, the Government attests to the appellant that the contested scheme is not described in any way in the explanatory memorandum to Act No 458 / 2011 Coll. This situation is due to the fact that this amendment was introduced only on the basis of the Senate amendment. However, the Government does not agree that the purpose of this legislation could not be inferred from the legislative process. According to the government bill, a minimum partial contribution from the winning gaming instruments and other technical gaming devices should have been introduced to replace the local fee for the winning instrument operated. During the legislative process, the minimum contribution was replaced by a combination of a fixed and proportional part of the partial contribution. This adjustment also responded to the frequent problems encountered in the past in relation to the collection of taxes and charges related to the operation of technical gaming equipment. The very nature of these facilities allowed the data on the amounts entered and paid to be handled, of course, to create an unjustified asset benefit by the tax entity. This problem was thus partly solved by the introduction of a minimum cash supply, at the level of the appropriate social damage of this type of gambling. Furthermore, with the help of the graphs and statistics of individual authorities, the government described in detail the different options and impacts of individual adjustments to introduce some form of fixed cash performance. This description is concluded by claiming that the contested scheme does not pose a risk to the so-called choking effect of the tax.
17. In addition to the above arguments, the Government also submitted an international comparison of the tax burden on gambling. In addition to a proportion of the tax base, several Member States of the European Union have introduced a fixed part, namely Bulgaria, Estonia and Slovakia. In all these countries, the fixed part of the levy represents a higher amount than that set for the Czech Republic by the contested regulation. On the contrary, in countries where this fixed part is not, the government believes that a significantly higher rate of proportion of tax is common. The tax burden in the Czech Republic is thus at least comparable to the situation abroad.
18. Finally, the Government points out that the petition is too broad and could not be entirely satisfactory. It can be concluded from the petit of the proposal and the appellant's argument that a proportion of the sub-base does not consider the appellant to be unconstitutional. Therefore, according to the Government, it is possible to abolish the provisions of § 41b (2) of the Lottery Act only in the words "and firm." In fact, if the Constitutional Court abolishes the whole provision, an interpretative problem would arise in relation to the type and amount of any tax burden on operators of technical gaming equipment. The proposal does not show at all what the contradiction between the contested legislation and Article 26 (1) of the Charter should be.
19. For all the above reasons, the Government therefore proposed that the Constitutional Court reject the proposal as unfounded.
20. The Ombudsman, by letter dated 21 July 2015, informed the Ombudsman that it did not exercise its right under Paragraph 69 (3) of the Law on the Constitutional Court and did not intervene.
21. The above observations have been sent to the appellant in the light of a reply. It merely referred to the original proposal, without in any way responding in particular to the observations of the intervener and the argument of the Senate, which proposed to introduce the contested regulation into the lottery law.
22. In the course of proceedings before the Constitutional Court, Act No. 380 / 2015 Coll., amending Act No. 202 / 1990 Coll., on Lottery and other similar games, as amended, amended, amended, amended the contested provisions. On 26 January 2016, the appellant informed the Judge-Rapporteur that it was insisting on hearing the application as submitted and did not use the possibility to extend or deepen the argument. The Constitutional Court also referred to the subsequent repeal of the lottery law by Act No. 186 / 2016 Coll., on gambling (see also paragraphs 139 and 140 (1) of the Repealing Act) and the subsequent adoption by the Constitutional Court of Act No. 187 / 2016 Coll., on gambling tax, on the basis of which the appellant will continue the proceedings after the decision of the Constitutional Court, i.e. on the basis of the legal status until 31.12.2015. Therefore, in the case of the application of a court pursuant to Article 95 (2) of the Constitution, in conjunction with Article 64 (3) of the Law on the Constitutional Court and taking into account the principle of the official nature enshrined in Article 68 (1) of Act No. 182 / 1993 Coll., on the Constitutional Court, the Constitutional Court continued the proceedings on the application for the inconstitutionality of the contested provisions of the lottery law [closer to the need for such a procedure, see for example the finding of 12 May 2009 sp. zn. Pl. ÚS 10 / 08 (N 115 / 53 CollU 427; 229 / 2009 Coll.) and the case-law cited therein], since otherwise it would have arisen for the proposing court of 10. 1. 2001 sp.
23. For the sake of completeness, it is noted that on 14 April 2016 the Judge-Rapporteur received an unsolicited comprehensive statement from the Union of the gaming industry of the Czech Republic (22 pages of text and 28 annexes). This statement was also supplemented by a submission received by the Constitutional Court on 20 October 2016.
Abandonment of oral proceedings
24. The Constitutional Court found that further clarification of the case could not be expected from oral proceedings and therefore, in accordance with Article 44 of the Constitutional Court Act, it ruled in the case without its regulation.
Derogation of the contested provisions
25. The proposal goes against the provisions of § 41b (2) and (4) as well as § 41c (g) of the Lottery Act (see Sub 1). However, the [§ 41c (g) still under the name § 41c (f) - see below] became part of the adoption of Act No. 458 / 2011 Coll., on the amendment of laws related to the establishment of one collection point and other changes to tax and insurance laws, with effect from 1 January 2012. As mentioned above, the contested provisions were amended by Act No 380 / 2015 Coll., amending Act No 202 / 1990 Coll., on Lottery and other similar games, as amended. Subsequently, the Lottery Act was repealed pursuant to § 140 (1) of Act No. 186 / 2016 Coll., on Gambling, with the application of the Lottery Act as effective before the date of entry into force of the Gambling Act in accordance with § 139 of the Lottery Act, as well as the rights and obligations relating thereto.
The provisions of § 41b of the Lottery Act, marked "Sub-bases of the levy 'as applicable, are laid down (the contested provisions are marked in bold):
"(1) The sub-base of the levy is the amount by which the sum of the amounts bet exceeds the sum of the winnings paid.
(a) from operated lotteries pursuant to § 2 (a), (c) and (d) in the case of sub-levy on lotteries;
(b) from the games operated pursuant to § 2 (h) and online odds betting pursuant to § 50 (3) in the case of a sub-levy on odds;
(c) from the betting games operated pursuant to § 2 (i) in the case of a sub-levy on gambling in the casino;
(d) from games operated under § 2 (m) in the case of the sub-base of the card tournament and cash betting,
(e) from operated lotteries or other similar games other than those referred to in points (a) to (d) and (3) in the case of sub-levy on other lotteries and other similar games.
(2) The sub-base of the contribution from the winning gaming instruments and other technical gaming equipment shall consist of a proportionate and solid part.
(3) The proportion of the sub-base of the payment of the prize instrument and other technical gaming equipment constitutes the amount by which the sum of the bet amounts exceeds the sum of the prizes paid in accordance with § 2 (e), (l), (n) and § 50 (3) operated by means of authorised instruments and equipment which, for the purposes of this Act, means an individual gaming site
(a) an authorised winning instrument;
(b) an authorised end-of-life interactive videoloter terminal,
(c) an authorised local loter system;
(d) other technical gaming equipment authorised under Paragraph 50 (3).
(4) The fixed part of the sub-base of the payment from the winning gaming instruments and other technical gaming equipment is the sum of the number of days in which each of the authorised instruments and devices has been authorised.
(5) The amount to be bet shall be the sum of the amounts received by the operator making up the deposit (bet) and any fee or other transaction related to the deposit (bet) made. ';
Paragraph 41c of the Lottery Act, marked "Rate of levy ', in its operative text, provided:
"The rate of levy on lotteries and other similar games
(a) 20% for the sub-base of the lottery levy;
(b) 20% for the sub-base of the exchange-rate betting levy;
(c) 20% for the sub-base of the gambling levy at the casino,
(d) 20% for the sub-base of the card tournament and cash betting,
(e) 20% for the sub-base of the levy on other lotteries and other similar games;
(f) 20% for the proportion of the sub-base of the payment from the winning gaming instruments and other technical gaming equipment;
g) 55 CZK for the fixed part of the sub-base of the payment from the winning gaming instruments and other technical gaming equipment. "
Assessment of the jurisdiction of the Constitutional Court to discuss the application and the applicant's active legitimacy
26. The Constitutional Court first examined whether the procedural conditions for hearing the application were fulfilled. The application was submitted by an actively legitimate body (Article 64 (3) of the Constitutional Court Act, in conjunction with Article 95 (2) of the Constitution), the Constitutional Court is competent to discuss that proposal [Article 87 (1) (a), in conjunction with Article 95 (2) of the Constitution]. The proposal is not inadmissible (Section 66 of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended by Act No. 48 / 2002 Coll.) and cannot be applied in accordance with Section 67 of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended by Act No. 48 / 2002 Coll., (closer to Sub 22).
27. The Constitutional Court could therefore proceed to assess whether the contested provisions of Act No. 202 / 1990 Coll., on lotteries and other similar games, as amended, in accordance with the constitutional order, i.e. (a) whether the contested legislation was adopted and issued within the limits of the Constitution laid down by the Constitution, (b) whether the constitutionally prescribed method of such adoption or extradition has been complied with, and finally (c) whether the contested legislation is in accordance with the constitutional order in terms of content (§ 68 (2) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended by Law No. 48 / 2002 Coll.).
Review of the procedure for the adoption of the legislative provision under review
28. The draft Act No. 458 / 2011 Coll., which introduced the contested provisions into the lottery law for the first time (but only on the basis of amendments made by the Senate), was submitted by the Government to the Chamber of Deputies, which, as the House of Deputies, discussed it as the House of Deputies No. 473 and ordered it to be discussed by the Budget Committee, the Social Policy Committee, the Economic Committee, the Public Administration and Regional Development Committee and the Committee of Petitions at first reading on 20 September 2011 (see Resolution 694 of the Chamber of Deputies). The Chamber of Deputies, at its third reading at the 30th meeting of 9 November 2011, approved the bill, with 92 Members voting in favour of its adoption (63 Members opposed).
29. Draft Act No. 458 / 2011 Coll., as approved by the Chamber of Deputies, was referred to the Senate on 22 November 2011, which discussed it as Senate Document No. 240 and decided on 8 December 2011 on the return of the draft Act to the Chamber of Deputies with the amendments adopted, which, in contrast to the text approved by the Chamber of Deputies, gave the contested provision the form (part VI) against which the appellant objects in this procedure. This Senate proposal was adopted by the House on 20 December 2011 at the 32nd meeting, with 130 Members present voting 98 in favour of the proposal (2 Members voted against it). The President of the Republic signed the bill on 27 December 2011. The Act was published in the Collection of Laws on 30 December 2011 under No. 458 / 2011 Coll.
30. The Constitutional Court notes that Act No. 458 / 2011 Coll., in which part of the fourth marked as "Amendment to the Lottery Act and other similar games" are also provisions contested by the proposal under consideration, was adopted and issued within the limits of the constitutionally determined competence of the legislature and in a constitutionally prescribed manner, respecting the requirement of Article 11 (5) of the Charter (hereinafter referred to as Sub 46 and 47).
31. Similarly, it considers the conditions of Article 95 (2) of the Constitution and Article 64 (3) of the Constitutional Court Act to be fulfilled. In the case of the appellant, the provisions of the law relating to its decision-making activities which are to be used immediately in the resolution of the case; it is thus a concrete control of the constitutionality of the law, as follows from the preamble to the factual and legal basis of the matter. The application thus fulfils the conditions for proceedings before the Constitutional Court.
Meritorious review of the proposal
32. According to the appellant, the contested provisions of the lottery law infringed the constitutional principle of equality in rights enshrined in Articles 1 and 26 (1) of the Charter and the resulting requirement to exclude arbitrariness in the regulation of the legal position of the commercial legal entities (here the compulsory contributions from the operation of winning instruments and other technical gaming equipment) and their rights. In particular, these errors should consist of:
(a) an unjustifiably distinction has been made between operators of such establishments and other taxpayers as a result of a different set of sub-base for the levy in the form of a fixed and proportional part provided for in Article 41b (2) of the Lottery Act. Unlike other taxpayers, it was only these operators who had to pay the so-called fixed part of the levy, which is that part of § 41b (2) of the lottery law which the appellant is actually attacking (its argument otherwise completely ignores the proportional part of the levy);
(b) there is a breach of the requirement that the legislation establishing the inequality of entities should pursue only a certain legitimate objective and that the inequality should be rational in relation to the purpose of the law. However, there is no legitimate and rational reason for the introduction of a fixed part of the sub-base of the levy for the operators of the winning gaming instruments and other technical gaming equipment, according to the applicant;
(c) there was no justification for the constitutional conformity of the contested legislation. According to the appellant, neither the text of the law nor the course of the legislative process, nor the explanatory memorandum to the law by which the contested provisions were introduced into the lottery law, were based;
(d) in contravention of the subject matter of the levy on lotteries and other similar games, which under Section 41a of the Lottery Law is "operation" of lotteries and similar games, the so-called fixed part of the levy depends only on the number of days in which the operation of the winning gaming instruments and other technical gaming equipment has been authorised; the operation of lotteries is not charged, but only the authorisation to operate lotteries.
33. In essence, the appellant focuses its objections only on the so-called fixed part of the levy, namely that only the players of the winning gaming instruments and other technical gaming equipment have been burdened with it. The appellant does not object to the proportional part of the levy (or the amount of the levy). The Constitutional Court subsequently assessed the relevant part of the appellant's argument and found its objections unfounded.
Ad (a)
Claimed infringement of Articles 1 and 26 (1) of the Charter
34. The appellant merely generally objects to violations of equality in rights and the prohibition of arbitrariness, while Article 26 of the Charter refers without any further argument. If there is to be a breach of equality in the rights referred to in Article 1 of the Charter, it should be assumed that the guiding principle of equality in dignity and rights enshrined therein applies in general to natural persons who, from the point of view of the natural basis of the Charter (see aline's first preamble), are given the same dignity and the legal status derived therefrom in a democratic rule of law. This natural legal basis cannot be applied to legal persons without further action. Natural persons, as well as each other, are distinguished by the legal nature, manner of legal conduct, creation and demise, the definition of the purpose of existence, etc., so that their capacity to be a bearer of fundamental rights and freedoms must be assessed according to their nature and legal definition, and it is the legislator who lays down rules for the recognition of their origin, existence, demise and legal possibilities.
35. In the present case, it is essential that the appellant forgoes, indeed not explicitly in the context of Article 26 (1) and (2) of the Charter, the essential provisions of the lottery law, i.e. § 1 (1), under which "the operation of lotteries and other similar games is prohibited ', and under the same provision, it was possible to provide for an exemption from this prohibition to the lottery law, so that it was possible to talk rather than to general regulation on a degree of tolerance of otherwise socially problematic activity. At the same time, the legislator stressed that it is only a" legally authorised "business in the field of lotteries and other similar games and their operation. (b) to further contribute to the protection of persons participating in lotteries and other similar games; and
36. From this constitutionally defined purpose of the law, intervention in the legal position (so-called subjective terms of business) of those allowed by the lottery law to operate lotteries and other similar games precisely for a particularly socially dangerous area of placement and operation of winning instruments and other technical gaming equipment pursuant to § 2 (e) of Act No. 202 / 1990 Coll., on lotteries and other similar games, as amended by Act No. 149 / 1998 Coll. Therefore, in § 4 (7) of the Lottery Act, it limited this authorisation to public limited liability companies located in the Czech Republic, based on the operation of these games, whose shares are all denominated in name. The share capital of this public limited company had to be at least CZK 30 000 000 and could not be reduced below this minimum amount throughout the period of validity of the permit, had to be paid only by cash deposits before the application for the permit was submitted. It is therefore not possible to talk about infringements of the rights and freedoms deriving from Articles 1 and 26 (1) of the Charter, as the above restrictions are allowed and foreseen in Article 26 (2) of the Charter for the protection of an important social interest (see Section 1 (1) of the Lottery Act). However, the applicant does not contest the infringement of that provision.
37. If the appellant objects to a violation of the prohibition of insolence, the Constitutional Court cannot testify to that claim either. The rule of law according to which a public authority can act only when the law allows it (general prohibition of insolence) and only in cases, within the limits and in the manner provided for by the law (prohibition of libel) is contained in Article 2 (2) of the Charter or in Article 2 (3) of the Constitution. As is apparent from the earlier point, such a breach of these legal state standards for the lawmakers' conduct cannot be inferred from the contested provisions of the lottery law from this part of the appellant's argument. In any event, it is not possible to deduce - and the appellant did not even attempt to do so by proving (merely not enough) such as the so-called choking effect of the levy - from the contested legislation the breach of the substance and the meaning of the fundamental right or the freedom to do business within the meaning of Article 4 (4) of the Charter.
Ad (b)
Legal objective of the different arrangements for the contributions of certain taxpayers
38. The Constitutional Court has dealt with issues of infringement of the principle of equality in rights, including in particular in the field of taxes and charges, repeatedly in the past. The conclusions of this case-law are also highlighted by the appellant and the Government in their observations, which makes it unnecessary for the Constitutional Court to state its comprehensive summary. Both parties are aware of the consistent conclusion of the Constitutional Court, according to which "the constitutional review of the tax, the fee and the pecuniary penalty shall include an assessment of compliance with the courts arising from the constitutional principle of equality, both non-accesorial (Article 1 of the Charter), i.e. the requirement to exclude arbitrariness in the distinction between entities and rights and those which are accessorical to the extent defined in Article 3 (1) of the Charter... For the constitutional conformity of the legislation under assessment in the light of non-acesoric inequality, it is sufficient that the classification evaluated is found in a rational relation to the purpose of the law, i.e. if it is in any way able to influence the achievement of this purpose" [cf. Case 7 / 03 ÚS (N 113 / 34 SbNU 165; 512 / 2004 Coll.]. However, according to the appellant, there is no such relationship between the inequalities laid down for the purpose of the law. The Constitutional Court did not identify with this view.
39. According to the Constitutional Court, the legitimate reason for authorising legislators to impose unequal obligations on operators of individual types of lotteries and similar games lies in the different nature of these gambling games, which at least is very likely to be very different in social consequences, including those on constitutionally protected values such as health protection, in particular mental, the creation of barriers to the emergence of pathological dependence on gambling (so-called gambling), protection of the family, its property, protection of children and youth, etc. It can therefore only be noted that, in this respect, the contested regulation in the lottery law was an illustrative example for the application of the generally recognised (natural) and, consequently, in Article 4 of the 1793 Constitution of France, expressly enshrined in the maximum under which the law... "can only establish what is fair and beneficial to society; may prohibit only what harms it" (elle ne peut ordonner que ce qui est juste et utile á la société; elle ne peut défendre que ce qui lui est nuisible).
40. According to the appellant, the inequality of operators of individual types of lotteries and similar games does not pursue any legitimate objective. In order to prove this, it would have to refute the already mentioned bases of the lottery law mentioned above sub 35 to 37. The contested provisions were thus part of and one of the means of fulfilling the legitimate objectives (purpose) of the lottery law and, therefore, within the scope of the legislator's possibility to establish, in accordance with Article 26 (2), the Charter of General and Objective Conditions for Entrepreneurship and other economic activity by a constitutional form to achieve the objective of the lottery law (how it is operated and whether any economic activity can be carried out at all). While individual taxes generally do not have such a purpose because they do not apply to any particular group of persons, this was the case in the case of lotteries and similar games in the case of regulation of placement and operation of winning gaming instruments and other technical gaming equipment. In this intervention, the Constitutional Court did not even find the so-called choking effect, i.e. the effect of the levy on the basis of its fixed part under § 41c (g) of the Lottery Act. At the same time, it did not find the unconstitutional function of this part of the levy in view of the objective of its regulation (see sub 41 n. above).
41. The problem of the harmful effects of individual types of lotteries is a long-term expertise, not only in the Czech Republic. This can refer to the regular annual reports of the National Monitoring Centre for Drugs and Addiction of the Secretariat of the Council of the Government for the Coordination of Drugs Policy (see e.g. Clouds, V. et al. Gambling in the Czech Republic and its effects. Praha: Office of the Government of the Czech Republic, 2014, and annual reports of this Centre from 2013 to 2017 available on the website www.vlada.cz and also using foreign research) with analysis of so-called gambling and associated negative social impacts at community and individual level, including criminality, which are primarily related to this. Therefore, the Constitutional Court cannot find it manifestly irrational to refer to the conclusion that there is a higher social damage to the operation of gaming instruments and similar facilities compared to other types of lotteries and similar games. The mere existence of such a broad-based social debate refutes the appellant's argument that it is impossible to understand the reasons for the different rules of each type of lottery. In order to conclude on the constitutional acceptability of the Act under consideration, it is sufficient that such grounds for different treatment exist objectively (see the statistics in the Government's statement, sub-13), thereby supporting the constitutional conformal interpretation of the contested provisions. The appellant did not dispute the argument made by the Government, even if it was given the opportunity.
42. Moreover, it is not without meaning to the question under consideration that the placement and operation of winning gaming instruments and other technical gaming equipment constitute an important part of the costs borne by the company in relation to gambling. According to the Annual Report on Gambling in the Czech Republic in 2014 by the authors of V. Mravčík and the collective (Prague: Office of the Government of the Czech Republic. National Monitoring Centre for Drugs and Addiction, May 2015, p. 56 n.), which is important for assessing the purpose of the contributions, received public budgets from these contributions from gambling 7.92 billion CZK. Of this, the revenues from electronic gaming equipment amounted to 78% (CZK 6.21 billion) and they had an increased trend compared to the previous year (they increased by CZK 228 million while the revenues from other gambling decreased by CZK 363 million. The income of public budgets from gambling was approximately CZK 750 per capita in 2014. However, at the same time according to this Annual Report quoted further studies, i.e. Winkler, P., Bejdová, M., Csémy, L. & Weiss, A. Problem gambling: Social costs of gambling in the Czech Republic. Praha: Prague Psychiatric Centre, 2014, the social costs of gambling ranged from about 14.2 to 16.1 billion CZK, most (about 80%) of these costs were incurred in connection with playing on electronic gaming equipment, while the authors of the study stated that the costs which were not identified or quantified included recovery costs, the cost of execution, the cost of aversion to loss, the prevention of crime, the financial costs of divorce, the cost of mental harm to victims of crime and the cost of missed opportunities (quoted according to Mravčík, V. et al. Annual Report on gambling in the Czech Republic in 2014, p. 59). In this context, the Constitutional Court points out that taxation in general for the State and public budgets is a function of fiscal, redistribution and allocation (according to the applicable regulation of Act No 187 / 2016 Coll., on gambling tax, as amended by Act No 298 / 2016 Coll., is already explicitly referred to as tax, as opposed to the Lottery Act, which spoke of levies). In addition, the role of taxes, fees, levies and other public benefits in terms of regulating the behaviour of legal entities, i.e. their taxpayers, is generally recognised. Therefore, the protective and regulatory functions of gambling taxation are highlighted in this case (cf. Rich, R., Krasulová, H. Act on Gambling Tax. Comment. Praha: Wolters Kluwer, 2017, p. 4), which may constitute a constitutionally conformal intervention into a State unwilling, although as mentioned above, the tolerated "other economic activities' referred to in Article 26 (1) of the Charter. The Constitutional Court therefore did not find this negative effect of the regulatory function of the levy from a fixed part of the sub-base of the levy contrary to the alleged infringement of Articles 1 and 26 of the Charter.
43. Even higher taxation of goods or services, which the legislator considers to be more socially harmful, is totally legitimate when it no longer prohibits the sale or operation itself. For the same reason, for example, higher taxation of more harmful tobacco or alcohol will be constitutional. The appellant's views on the similarity between the operation of winning gaming instruments and other technical gaming equipment with another type of lottery (e.g. the so-called betting terminals for lottery numbers) are completely unfounded and irrelevant in terms of the legislator's authorisation to impose a higher tax liability on a particular type of socially harmful gainful activity. In the remainder of the appellant's argument (sub-7), the Government's observations (see sub-15) can be attributed to the fact that it is not possible to compare technical games affected by the contested regulation with lottery betting terminals with regard to differences in the principles of these types of gambling, when betting terminals register players in a game whose result is determined only in time and usually elsewhere. Moreover, these devices are usually not controlled by a player who merely gives instructions to their operator. It can therefore be concluded that, on the basis of the facts currently available, the appellant has not demonstrated the arbitrage or inclination of the legislator when imposing a higher or very special new tax obligation on the operators of the winning gaming instruments and other technical gaming equipment.
44. The legislator then has an even wider margin of discretion to choose the mechanism for determining the specific amount of tax liability. The Constitutional Court cannot, by its judgment, replace the judgment of the democratically elected legislature, which has wide discretion in the sphere of public policies and which also bears political responsibility for the failure of the chosen solution (see, mutatis mutandis, the findings of 21.4.2009 sp. zn. Pl. ÚS 29 / 08 (N 89 / 53 SbNU 125; 181 / 2009 Coll.) or of 31.1.2008 sp. zn. ÚS 24 / 07 (N 26 / 48 SbNU 303; 88 / 2008 Sb.)]. It is not only the business of their operators that can be compared, but the tax substance as a whole, i.e. what they operate, how and to what costs they earn profits, and whether and how the operation of particular gambling is reflected in values protected by constitutional order. This includes not only the various aspects of gambling, but also the creation of assumptions, or, on the contrary, obstacles to offering it. Thus, the Constitutional Court has not reached the conclusion on the unconstitutionality of the regulation, which divided the sub-base of the payment from the winning gaming instruments and other technical gaming equipment into a proportion proportional (determined, in short, by the profit of the operator) and a part fixed (determined according to the authorised period of operation of the equipment). This adjustment, as is apparent from the Government's observations, has made it easier to ensure a legitimate objective of collecting at least a minimum tax benefit in the field of specific gainful activities, where tax evasion often occurs. Nor does the appellant dispute that claim. The illogical nature of that adjustment only follows from the argument that the so-called fixed part of the levy is established in contravention of the subject-matter of the levy on the operation of winning gaming instruments and other technical gaming equipment, not the period of authorisation for such operation. This legitimate objective is covered by Section 4 (3) of the Lottery Act, according to which operating is meant to mean the operation of lotteries and other similar games, including brokering, organisational, financial, technical and other services related to the operation of such games, and their proper termination and billing. The interpretation of the provisions laid down by the Government did not find the Constitutional Court to be constitutionally unconformal, as it will not only stand in the rationality test [see for its rules in particular the finding of 24 April 2012 sp. zn. Pl. ÚS 54 / 10 (N 84 / 65 SbNU 121; 186 / 2012 Sb.)], but also in the proportionality test [for example, the finding of 2 April 2013 sp. zn.
45. In general, the legislator also confirmed the possibility to distinguish between different gambling games from the Court of Justice, which in Case C-98 / 14 of 11.6.2015 in the case of Berlington Hungary Tanácsadó és Szolgáltató kft, Lixus Szerencsejáték Szervező kft, Lixus Project Szerencsejáték Szervező kft, Lixus Invest Szerencsejáték Szervező kft, Megapolis Terminal Szolgáltató kft against Magyar Álam (available at http: / eur-lex.europa.eu / legal-content / CS / TXT /? uri = CELex: 62014CJ0098) concluded that it is legitimate, limited to the State of operation of technical games only on the casino. At the same time, he stated that fiscal implications may be secondary, with the fact that the level of the burden (without a transitional period, Hungary has increased the flat-rate tax on the operation of gaming machines by five times and has introduced a proportional tax on the same activity) to be assessed by national courts. It stated that this is an intervention in the right to freedom to provide services under Article 56 of the Treaty on the Functioning of the European Union, which can be justified by the overriding reasons of general interest which are to be assessed by the national courts in the light of whether "first, they are actually pursuing objectives relating to the protection of consumers from gambling addiction and the fight against criminal and fraudulent activities linked to games, while simply the fact that the restriction of gambling is an accesoric contribution to the budget of the Member State concerned through an increase in tax revenue does not prevent such a restriction being seen as a pre-pursuit of such objectives; that they pursue such objectives in a coherent and systematic manner and meet the requirements arising from the general principles of Union law, in particular the principles of legal certainty and the protection of legitimate expectations, as well as the right to property '. Doubts of that nature, which would have constitutional relevance in the form of infringements of Articles 1, 2 and 26 (1) and (2) of the Charter and Article 2 (3) of the Constitution, have not been found by the Constitutional Court (see above).
Ad (c)
Lack of justification for the draft contested provisions of the law
46. The appellant also objects to a lack of justification for the constitutional conformity of the contested legislation both in the text of the law, in the course of the legislative process itself and in the missing explanatory memorandum. As far as the text of the law is concerned, this objection is already unfounded in the light of what has been mentioned above for the purpose of the law defined in Paragraph 1 (1) thereof (see Sub-sub-paragraphs 35 to 37). Similarly, an unfounded objection is that there is no constitutional consensus on this issue in the Senate and that there is no justification for the report. Here, the appellants must be referred to Articles 46 (2) and 47 (2) to (4) of the Constitution, from which this obligation of the Senate does not apply in constitutional terms, not to mention that Article 47 (4) of the Constitution nor the amendments do not allow amendments when discussing a bill returned by the Senate as amended. Finally, it must be stressed that the appellant cannot succeed in arguing that the constitutional conformity of the Senate amendment has not been sufficiently justified, or not at all, because, in itself, the conclusion on the inconstitutionality of the contested legislation can never be drawn. On the contrary, it is precisely the task of the appellant (§ 34 of Act No. 182 / 1993 Coll., on the Constitutional Court) to prove that the adopted law is contrary to the constitutional order of one of the aspects enshrined in § 68 (2) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended by Act No. 48 / 2002 Coll. However, the appellant failed to do so.
47. Finally, it should be noted that the procedures for the repeal of laws or their individual provisions should not serve to ensure that the entitled appellants, without proper constitutional reasoning, transmit discussions on complex social issues, such as the degree of damage to individual types of lotteries, to the ground of the Constitutional Court and, in this way, also seek to create the imaginary so-called third chamber. In this respect, he may be the guarantor, on the one hand, of the fact that such a debate took place (or at least could have taken place without undue impediments) in the premises of the chambers of Parliament called for to do so, and of whether the resulting law, pursuant to Article 87 (1) (a) of the Constitution, is contrary to constitutional order.
Ad d)
Opposition in the definition of the subject-matter of the levy - concept of the operation of playing instruments
48. The Constitutional Court could not attest to the appellant's objection that the so-called fixed part of the sub-base of the levy was not derived from the subject matter of the levy on the operation of the plant. In this context (see sub-14), the Government refers to the definition of the concept of "operating 'under Section 4 (3) of the Lottery Act. It follows that the concept of operation cannot be understood only in the narrowest sense, i.e. as the state where the equipment is switched on (on the dates on which the operation is permitted), but also as all activities related thereto. As a basis for calculating the levy according to the number of days in which the operation of the plant is permitted, the Government refers to a rational simplification of the tax administration, both for the tax administrator and for the tax entity.
49. Furthermore, according to the Constitutional Court, the constitutionality of this solution can be based, in particular, on what has been stated above, on the damage to the operation of the gambling facilities in question, which are particularly dangerous for the development of pathological dependence. The purpose of this regulation was not only to act on its own play, but also on its own availability, i.e. also to create the opportunity to create such an addiction by offering the opportunity to play. Therefore, such a definition does not only stand up to the rationality test, as it does not interfere with the substance and purpose of carrying out this economic activity under Article 4 (4) of the Charter, it does not call into question the very existence of that right under Article 26 (1) of the Charter, it undoubtedly pursues a legitimate objective (see above all the outlines), but the chosen instrument is even more than just rational. You can also rely on research abroad (here specifically Williams, R. J., West, B. L. & Simpson, R. I. Prevention of Gambling Problem: A Comprehensive Review of the Evidence, and Identified Best Practices. Report prepared for the Ontario Problem Gambling Research Centre and the Ontario Ministry of Health and Long Term Care. October 1, 2012), which is based not only on the relevant components of the state apparatus such as the National Monitoring Centre for Drugs and Addiction of the Secretariat of the Council of the Council for the Coordination of Drugs Policy, but also on legislation. Annual Report on Gambling in the Czech Republic in 2015 by the authors of Mravčík, V. and kol. (Prague: Office of the Government of the Czech Republic. The National Monitoring Centre for Drugs and Addiction, 2016, p. 119, the electronic version available at https: / / www.drogy-info.cz / publications / dokumení-zpravní-o-gamer- border - v-cesky-republic- v-roce-2015 /, in paper version p. 121) lists the recognised activities regulating the availability of gambling, which are:
(a) limitation of the general availability of gambling - limitation of the number of gambling establishments, reduction of more harmful forms of gambling, limitation of the number of types of gambling, limitation of gambling to dedicated gambling establishments, limitation of the operation of gambling to designated sites, limitation of the operating time of establishments;
(b) limitation of accessibility - ban on youth gambling or increase of the legal age for gambling, restriction of access to establishments to non-residents, exclusion of a particular population from gambling or self-exclusion;
(c) limitation or modification of the way in which gambling is provided - modification of the structural characteristics of games, gambling limits, cancellation of loyalty / bonus cards or change of their parameters, maximum loss limits, training programmes on problem gambling for gambling employees, automatic or mandatory intervention for risky players, restrictions on access to money, restrictions on current use of alcohol and tobacco, restrictions on advertising, appearance of gambling establishments, increase in the price of gambling, provision of gambling by the state monopoly system.
50. The contested legislation in terms of monitoring the legitimate objective, its effectiveness and proportionality of the intervention in this type of "business' will therefore also stand in the proportionality test to intervene in the right to engage in other economic activities, in particular in the light of the precisely mentioned activities regulating the availability of gambling referred to in points (a) and (c). In this context, the finding of 14 June 2011 sp. zn.
Conclusion
51. On the basis of the above, the Constitutional Court concluded that the contested provisions of the Lottery Act did not contravene Articles 1 and 26 (1) and (2) of the Charter, as well as Articles 2 (2) and 11 (5) of the Charter and Article 2 (3) of the Constitution, and therefore, pursuant to Article 70 (2) of Act No 182 / 1993 Coll., on the Constitutional Court, decided to reject the application.
President of the Constitutional Court:
JUDr. Rychetský v. r.
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Regulation Information
| Citation | The Constitutional Court found no 62 / 2018 Coll., on the application to declare inconstitutionality § 41b (2) and (4) and § 41c (g) of Act No. 202 / 1990 Coll., on lotteries and other similar games, as effective until 31 December 2015 |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 12.04.2018 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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