(1)

On 8 July 2009 the Consortium Loutraki SA – Club Hotel Loutraki SA (2) (the ‘complainant’ or ‘Loutraki’) lodged with the European Commission (the ‘Commission’) a complaint concerning Greek legislation on a system of levies on admissions to casinos, alleging that such system provided State aid to three operators, namely Regency Casino de Mont Parnès, Corfu Casino and Casino Thessaloniki (3). By e-mail message of 7 October 2009 the complainant stated that it did not object to the disclosure of its identity. On 14 October 2009 the Commission services met representatives of the complainant. By letter of 26 October 2009 the complainant provided further elements in support of its complaint.

(2)

On 21 October 2009 the Commission communicated the complaint to Greece and invited Greece to clarify the issues it brought forward. By letter dated 17 November 2009 Greece requested further time to respond, which was granted by the Commission by e-mail message of 18 November 2009. On 27 November 2009 Greece replied to the Commission.

(3)

On 15 December 2009 the Commission forwarded the reply of Greece to the complainant. The complainant replied on 29 December 2009 with observations on the reply of Greece.

(4)

On 25 February, 4 and 23 March and 13 April 2010, the Commission requested further information from Greece, to which Greece replied on 10 March, 1 and 21 April 2010.

(5)

By decision of 6 July 2010 (hereinafter the ‘Opening Decision’), the Commission informed Greece that it initiated the formal investigation procedure set forth in Article 108(2) of the Treaty on the Functioning of the European Union in regard of the measure implemented by Greece, specifically the charging of lower tax on admissions in certain casinos. The Opening Decision was published in the Official Journal of the European Union (4), inviting interested parties to submit their comments.

(6)

By letter of 9 August 2010 Greece requested an extension of the deadline to respond, which was granted by the Commission by letter of 18 August 2010. By letter of 6 October 2010 the Commission received comments from Greece on the Opening Decision. On 12 October 2010 the Greek authorities submitted additional information regarding the contested measure.

(7)

Following the opening of the procedure, the Commission received observations from two interested parties: the representatives of the beneficiary casino of Mont Parnès, reacted to the opening by letter of 4 August 2010; the representatives of the private Loutraki casino reacted to the opening by letters of 8 and 25 October 2010.

(8)

By letter of 29 October 2010, the Commission forwarded the abovementioned observations to the Greek authorities, in order to give them with the opportunity to react. By letter of 6 December 2010 the Greek authorities presented their comments to third parties’ observations, in order to clarify, inter alia, certain aspects of the application of the subject-scheme and the interpretation of the Greek legislation relevant to the analysis of the case.

(9)

The measure under assessment is the fiscal discrimination that the Greek authorities have put into place in favour of certain casinos through the implementation of several simultaneous partially mandatory legal provisions (5) concerning:

thereby placing the latter at a competitive disadvantage.

(10)

The measure under assessment concerns public casinos and one private casino (Thessaloniki), which was exceptionally allowed to benefit from the treatment of public casinos, as further described herein below.

(11)

The beneficiaries of the measure under analysis are the following Greek casinos: Mont Parnès (6), Thessaloniki (7), Corfu (8) and Rhodes (9).

(12)

At the time of the Opening Decision, the lower regulated price of admission tickets of EUR 6 only applied to three Greek casinos: Mont Parnès Casino (casino privatised by 49 %, whereas 51 % of shares are still held by the State), Thessaloniki Casino (private casino, but assimilated to public casinos) and Corfu Casino (public casino). The Commission notes that the Rhodes Casino and the Corfu Casino ceased benefiting from the measure in April 1999 (10) and August 2010 (11) respectively, since they stopped charging the lower price for admission tickets at that respective moment in time when they were fully privatised.

(13)

Before the opening of the market in 1994, only three casinos operated in Greece, namely the casinos of Mont Parnès, Corfu, and Rhodes. At that time, these casinos were public undertakings and operated as State-owned service-clubs of the Greek Tourism Office (EOT) (12). The price of admission tickets in these casinos was set by way of decisions of the General Secretary of the EOT (13), as follows:

(14)

The market was opened in 1994, when 6 newly created private casinos joined the existing State owned casinos based on the Law 2206/1994 (15). The Law of 1994 provided for the granting of a total of 14 licenses aimed at the existing 3 State owned casinos of Rhodes, Mont Parnès and Corfu, and 11 newly created private casinos (16). However only 6 of the 11 new private casinos were licensed and began operating, namely the casinos in Chalcidice, Loutraki, Thessaloniki, Achaia (Rio), Xanthi (Thrace) and Syros (during 1995-96), and the remaining 5 licenses were abolished.

(15)

Law 2206/1994 (Article 2(10)) provided that the price of admission tickets to the casinos in certain areas would be set by Ministerial Decision, and that the same Decision would determine the percentage of the price that would represent revenue to the Greek State. Indeed on 16.11.1995 a Ministerial Decision (17) of the Minister for Finance established that, from 15 December 1995 all operators of casinos under Law 2206/1994 (18) must charge a price for admission tickets of 5 000 drachmas (19) (approximately EUR 15 (20)). According to this Ministerial Decision, these casino enterprises are further subject to a legal obligation to pay 80 % of the face value of each ticket as public levy to the State, while the remaining 20 %, including the appropriate VAT, constitute revenue for the casino (21). The Ministerial Decision provides that casinos may grant free entrance (22). Nevertheless in all cases, all casinos are under the obligation to pay the respective 80 % of the regulated price to the State, regardless of what they actually charge consumers (23). According to the Ministerial Decision, the payments of ‘public fees’ are performed by each casino on a monthly basis (24). The Ministerial Decision also provides for specified discounts for tickets valid for 15 or 30 days (25).

(16)

All the new private casinos created (since 1995) under the Law 2206/1994 implemented the Ministerial Decision of 1995 and applied– in principle, as described in the previous paragraph – the EUR 15 price for admission tickets, with the only exception of the Thessaloniki Casino (as further described below).

(17)

However, the State owned casinos of Mont Parnès, Corfu and Rhodes continued to operate as service clubs of EOT (26) and did not implemented the acts of 1994-95 until the later granting of the licence provided by the Law 2206/1994.

(18)

According to the various observations and descriptions of the national provisions presented by the Greek authorities, the Commission understands that the system worked in practice as follows:

(19)

The Greek authorities explained that the operation of casinos in Greece is governed, generally, by Law 2206/1994. The special provisions applicable to the public casinos which existed prior to this Law are considered exceptions from the application of the general provisions of the Law 2206/1994 (and the implementing Ministerial Decision of 1995), pending the privatisation of these public casinos and the issuance of the licenses envisaged in the Law.

(20)

Consequently, the Ministerial Decision of 1995 was not deemed to apply to the public casinos until the date they were licensed under Law 2206/1994 – either as concerns the standard admission price of EUR 15, or as concerns the requirement to remit to the State 80 % of that price. The public casinos began paying the relevant 80 % only upon the later granting of the license under the Law 2206/1994 (as described below – paragraphs 23 and following). However, since for the public casinos the price of admission tickets exceptionally remained at the level of EUR 6, as the already in force decisions of the EOT (setting the prices at EUR 6) were considered special derogatory provisions (pre-existing lex specialis) which were unaffected by the general provisions of the Law 2206/1994 and the Ministerial Decision of 1995, they only paid 80 % of EUR 6. The EOT decisions were only deemed inapplicable when the casinos were no longer fully owned by the State, after their respective privatisation. It is only further to that that the casinos then passed to the standard price of admission tickets of EUR 15 and the obligation to pay 80 % of EUR 15 as levy to the State.

(21)

An exception to what appears that it should have been the rule is the partial privatisation of the Mont Parnès casino, confirmed by the Law 3139/2003 (which also provided for the later foreseen privatisation of Corfu) that explicitly stipulated that the price of admission tickets in Mont Parnès casino would remain at EUR 6.

(22)

In 2000 EOT was succeeded in the operation of the casinos of Mont Parnès and Corfu by the Hellenic Tourism Company (ETA), fully owned by the Greek State, and from the end of 2000 and until their licensing under Law 2206/1994 in 2003, ETA started (27), voluntarily in the beginning and later by virtue of Article 24 of Law 2919/2001, to adapt gradually to the obligations set for casinos by Law 2206/1994, in order to prepare both these formerly State owned casino clubs to be fully licensed as casinos and be privatised. During this transition period ETA, inter alia, remitted to the State 80 % of the EUR 6 price of admission tickets in Mont Parnès and Corfu.

(23)

In particular, in 2003 the State owned casino of Mont Parnès was converted into a limited company and 49 % of its capital disposed to the private sector (28). The license for the Casino Mont Parnès provided for in Law 2206/1994 was finally granted in 2003 under Law 3139/2003 (Article 1(1)). The same law kept the admission price in Mont Parnès at EUR 6 (Article 1(1)(vii)).

(24)

In the case of Corfu casino, the license provided for in Law 2206/1994 was initially granted to ETA in 2003 under Law 3139/2003 (Article 1(3)) in order for ETA to contribute it upon its later privatisation. The same provision stated that the admission price to the casino of Corfu would be set by a new ministerial decision, implying in other words that the Ministerial Decision of 1995 was not applicable. According to the Commission’s information, no new ministerial decision has been issued and the casino of Corfu continued to charge EUR 6 until its privatisation in August 2010 (29), when it started applying the EUR 15 price of admission tickets.

(25)

In the case of Rhodes casino, the license under Law 2206/1994 was issued in 1996 by virtue of ministerial decision Τ/633/29.5.1996. However the casino continued to apply the reduced price of admission tickets until 1999, passing to EUR 15 only after the privatisation which took place in April 1999 (as until its privatisation it operated under the control of EOT – and thus applied the EOT decision of 1992 (30) which set the price of admission tickets to the Rhodes Casinos at 1 500 drachmas).

(26)

The privately owned Thessaloniki casino was incorporated and licensed in 1995 under Law 2206/1994 (31). Until the present date, it has been applying the reduced EUR 6 price of admission tickets applied by the State-owned casinos (in Mont Parnès and Corfu) by virtue of the Law 2687/1953 (32) providing that enterprises constituted with foreign investment enjoy treatment at least as favourable as the one applicable to other similar enterprises in the country (33). Even later on, when the issue was further raised, the management of the Casino (i.e. Hyatt Regency) asked the price of admission tickets in Thessaloniki casino to be set at the same level as that of the Casino Mont Parnès, i.e. at EUR 6. This request was accepted, following an opinion from the Greek Legal Council of State (Opinion 631/1997/EC). The requirement to remit to the State 80 % of the face value of admission tickets was applicable to the casino of Thessaloniki since the issuance of its license in 1995 (34).

(27)

The Commission initiated the formal investigation procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union (TFEU) expressing significant doubts about the discriminatory fiscal treatment in favour of several specifically identified casinos in Greece that benefit from a more advantageous taxation than the one to which the rest of the casinos in the country are subject.

(28)

The Commission considered that the contested measure departed from the general Greek legal provisions establishing the normal level of levies on admissions in casinos and therefore improved the competitive position of the beneficiaries.

(29)

The Commission observed that the contested measure appeared to constitute a loss of State resources for the Greek State, and it provided an advantage to the lower priced casinos. In response to the argument by the Greek authorities that the direct beneficiary of a lower price of admission tickets is the customer, the Commission observed that subsidies to consumers can constitute State aid to enterprises when the subsidy is conditional on the use of a particular good or service from a particular undertaking (35).

(30)

The Commission also observed that the level of taxation did not appear to be set according to the circumstances of each individual casino (36), and it provisionally concluded that the measure is selective (37).

(31)

The Commission found the contested measure was liable to distort competition between casinos in Greece, as well as in the market of European business acquisition. The Commission noted that it fully respects the right of Member States to regulate gambling on their territory subject to EU law, but cannot accept that these arguments deprive the measure at issue of any effect of distortion of competition or on trade between Member States. The operators in the sector are often international hotel groups, whose decision to invest could be affected by the measure, and in fact casinos may act as an attraction to tourists to visit Greece. The Commission therefore concluded that the measure is capable of distorting competition and affecting trade between Member States (38).

(32)

The Commission reached the preliminary conclusion that the measure constitutes unlawful aid, since it had been implemented by the Greek authorities without the prior approval of the Commission, and therefore subject to the application of Article 15 of the Procedural Regulation as regards recovery (39).

(33)

The Commission did not identify any grounds for considering the contested measure compatible with the internal market since it was considered to represent undue operating aid to the beneficiary casinos (40).

(34)

The Commission finally observed that if its doubts that the measure contains incompatible State aid are confirmed, then pursuant to Article 14(1) of the Procedural Regulation it would be obliged to order its recovery by Greece from the beneficiaries, unless this would be contrary to a general principle of law (41).

(35)

During the formal investigation procedure, the Commission received comments from Greece, from the representative of the company ‘Elliniko Kazino Parnithas A.E.’ (‘Mont Parnès’), and from the representatives of the private Loutraki casino (‘Loutraki’).

(36)

As the comments received from the representative of the beneficiary casino of Mont Parnès are essentially identical with the comments received from the Greek authorities, their summary has been presented together under this Section.

(37)

Both the Greek authorities and Mont Parnès contest the existence of State aid. They both argue on the grounds that the State does not forgo any revenue (or that if it does, then the casinos do not gain any advantage).

(38)

The Greek authorities argue that the price differentiation is only a price regulation issue, since the tax raised is a uniform proportion of the respective value of the price of admission tickets issued.

(39)

According to the Greek authorities, the objective of the setting of a price of admission tickets and the payment to the State is not to raise revenue for the State but to discourage persons of low income from gambling. The fact that the practice of admission tickets also results in public revenues does not alter its nature as a control measure. Thus, the imposition of a price of admission tickets on casino customers entering the gaming area of casinos is regarded by the Greek authorities as constituting an onerous administrative control measure, which however lacks the character of a tax and cannot be regarded as a tax burden according to Judgement No 4027/1998 of the Council of State (the supreme administrative court of Greece) (42).

(40)

As for the differences between the prices of different casinos, Greece argues that the economic and social circumstances of the various casinos are different and not comparable. The Greek authorities contend that the distinction between charges is justified on public policy grounds, including that ‘the conditions applying to each casino, justify and are fully in line with the practice of setting a different ticket price for casinos located near large urban centres … and for casinos in the countryside … which is mainly inhabited by rural populations who – in their majority – have lower incomes and educational levels and are more in need of being discouraged from playing games of chance than the inhabitants of urban areas’.

(41)

On the observation of the complainant (Loutraki) that the price of admission tickets for the casino of Corfu changed from EUR 6 to EUR 15 when it was privatised in 2010, which rather contradicts the public policy arguments, the Greek authorities respond that the remote geographical location of the island of Corfu makes it uncompetitive compared to all other Greek casinos (therefore it does not distort competition). The authorities further argue that it is imperative to make the price of admission tickets dissuasive for the sake of protecting the inhabitants of Corfu, because the change in the operating conditions of the casino following privatisation will inevitably lead to a dramatic increase in its operating hours, its activities in general and its attractiveness.

(42)

The Greek authorities and Mont Parnès contend that should there be an advantage to lower priced casinos (because they attract more customers) then by the same token there is no loss of State resources. Furthermore, it is not certain that with a higher ticket price these alleged beneficiaries would generate more revenue for the State, and the alleged loss of revenues is therefore hypothetical. The Greek authorities and Mont Parnès also point out that the benefit of the lower price of admission tickets is received by the customer, and that the proportion of the price kept by the casino is a higher amount in the casinos with a EUR 15 admission, which is therefore a benefit to them.

(43)

The Greek authorities and Mont Parnès also maintain that there is no effect on competition/trade on the basis that each casino serves a local market. They dispute the possibility of competition with other forms of gambling cited in the Opening Decision, noting that Internet gambling is currently illegal in Greece.

(44)

The authorities and Mont Parnès also contend that even if the view were taken that the reduced price of admission tickets of EUR 6 might have influenced or may influence the decision of a foreign company to invest in a casino business in Greece, the foreign company could always avail itself of Law 2687/1953, as did the company Hyatt Regency Hotels and Tourism (Thessaloniki) S.A. in the case of the Thessaloniki casino.

(45)

As regards the allegations of complainant that the beneficiaries are able to grant admission gratuitously, while the 80 % contribution still has to be paid and which therefore illustrates most clearly the aid character of the measure, the Greek authorities claim that the practice is ‘exceptional’, as casinos allegedly make use of this exception to offer free admission (as a courtesy) mainly to VIPs or famous customers and as this practice is contrary to tax law (Law 2238/1994), since the expenditure from paying 80 % of the ticket price to the State from own resources is not recognised as productive expenditure and cannot be deducted from the company’s revenues (which would expose the company applying this practice to substantial tax burdens).

(46)

The authorities and Mont Parnès further draw the attention of the Commission to other differences between casinos in terms of various fiscal/regulatory measures. Thus, these differences which allegedly favour Loutraki (the complainant) would counter-balance the advantages that the beneficiaries enjoy due to the lower price of admission tickets. The main measure invoked is that each casino pays a proportion of annual gross profits to the State but under the law the proportion is lower for Loutraki than for others. On this point however, the Commission firstly observes that these other measures invoked by the Greek authorities and Mont Parnès, in case of existence, might constitute a separate aid measure in favour of Loutraki, if all conditions provided by the applicable EU State aid law are met. In any event these measures are distinct from the measure under assessment and therefore they are not covered by the present Decision.

(47)

Finally, Greece has indicated that it is examining a potential change of the pricing policy of casinos, in order to eliminate discriminations between casinos. However, it has not yet informed the Commission of the implementation of any such change.

(48)

The Greek authorities and Mont Parnès did not submit any observations concerning the compatibility and the legality of the aid.

(49)

The Greek Authorities and Mont Parnès contend by way of subsidiary argument that even if it were found that the measure under assessment is unlawful and incompatible State aid, any recovery of that aid would run counter to:

(50)

On the calculation of the amount to be recovered, the Greek authorities and Mont Parnès contest the calculation proposed by Loutraki (difference in tax levied per customer between the higher priced and lower priced casinos, multiplied by the number of customers entering the beneficiary casinos). Such calculation would be flawed and arbitrary as it is not certain that with a higher ticket price the alleged beneficiary casinos of Mont Parnès, Thessaloniki and Corfu (44) would have the same amount of clientele.

(51)

Loutraki argues that the measures provided by national legal provisions constitute a fiscal discrimination in favour of certain casinos insofar as the requirement to remit to the State the uniform 80 % levy on admission in casinos applies to a different tax basis – the two different admission prices set by the State. As the admission price for the beneficiary casinos is significantly inferior to that of the other casinos (EUR 6 instead of EUR 15), this constitutes a loss of revenues for the State and thus amounts to State aid, in light of the distortion of competition it creates.

(52)

Loutraki further argues that the measure is not objectively justified, as the imposition of a lower price of admission tickets in the beneficiary casinos is actually contrary to the social objective and the justification and characteristics of the setting of a price of admission tickets to casinos as described by the Judgement No 4027/1998 of the Greek Council of State. Loutraki contends that it cannot be reasonably argued that administrative control and social protection could be achieved by different prices of admission tickets – in casino Mont Parnès, only ca. 20 km from Athens city centre, by a ticket of EUR 6 while in casino Loutraki, ca. 85 km from Athens city centre, by a ticket of EUR 15, or respectively, in casino Thessaloniki, only ca. 8 km from Thessaloniki city centre (also at EUR 6), as opposed to casino Chalcidice, ca. 120 km from Thessaloniki city centre (at EUR 15).

(53)

Loutraki observes that, although Greece had previously argued that the reduced price of admission tickets of EUR 6 is justified in consideration of special circumstances applicable to each beneficiary casino, mainly related to the geographical situation of each casino (which determines certain economic, social, demographic and other specificities), nevertheless, in August 2010, the Corfu Casino passed to EUR 15 upon its privatisation, without any explanation as to why the abovementioned special circumstances no longer applied.

(54)

On the quantification of the amount to be recovered, Loutraki maintains that this amount is the difference in tax levied per customer multiplied by the number of customers entering the beneficiary casinos.

(55)

As concerns the separate measures invoked by Greece and Mont Parnès, which would allegedly favour Loutraki (mainly that Loutraki would pay a lower proportion of annual gross profits to the State as compared to other casinos), Loutraki sustains that in practice it has paid the same amount as its competitors under a separate agreement with the authorities.

(56)

The measure under assessment is the fiscal discrimination that the Greek authorities have put into place in favour of certain casinos through the implementation of simultaneous legal provisions (45) concerning both the fixing of a uniform 80 % levy on the price of admission tickets in casinos, and the setting of two unequal regulated prices of admission tickets at EUR 6 and EUR 15 respectively for publicly and privately owned casinos, thereby placing the latter at a competitive disadvantage (46).

(57)

In order to ascertain whether a measure constitutes a State aid caught by the provisions of the TFEU, the Commission has to assess whether it fulfils the conditions of its Article 107(1). This Article states that ‘Save as otherwise provided in the Treaties, any aid granted by Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market’.

(58)

The Commission will assess hereunder whether the contested measure fulfils the four cumulative conditions to constitute a State aid within the meaning of Article 107(1) of the TFEU.

(59)

In order to constitute State aid, a measure must confer on beneficiaries an advantage which relieves them of charges that are normally borne from their budgets.

(60)

Regarding this, the Greek authorities argued, firstly, that, as the level of the contribution that all casinos operating in Greece must pay to the State is uniform (i.e. 80 % of the value of each admission ticket), whereas the element of difference in treatment comes from the pricing policy set in 1994-95 by legal provisions (setting the level of the price of admission tickets at EUR 15 for casinos to be licensed under the provisions of Law 2206/1994), such measure may not be covered by State aid rules.

(61)

The Greek authorities also contended that the admission charge constitutes only a measure of administrative control, without having a fiscal character since, as, according to the Decision of the Greek Council of State 4025/1998 (the supreme administrative court), the setting of a price of admission tickets in casinos has a social character and does not constitute a tax measure.

(62)

It should however be noted first that the setting of prices by the Law 2206/1994 may not be easily qualified as a typical pricing policy, since all casinos appear to be free to charge consumers a lower price of admission tickets, or even grant free admission, though in all cases they remain subject to the obligation to pay to the State 80 % of the respective value of the admission tickets issued, regardless of what was actually charged to the consumers.

(63)

Anyway, in applying the EU rules on State aid, it is irrelevant whether the measure under assessment is of a pricing or tax nature, since Article 107 of the TFEU applies to aid measures ‘in any form whatsoever’ that provide an advantage. The fact that its primary aim was not to generate fiscal revenues is not in itself sufficient to allow such a measure to escape the qualification of State aid.

(64)

Even admitting that the setting of a price of admission tickets in casinos may have a social objective, the question of whether it constitutes an advantage amounting to State aid must be assessed in terms of effects, at the level of individual companies with a view to determining whether some companies contribute less to public revenues. The fact that the exemption from the application of the general price of admission tickets of EUR 15 was granted individually to specific casinos, and in particular the fact that the levy of 80 % is to be paid to the State on the basis of the lower price which those casinos must – in principle (see above) ask, shows that an advantage is granted to those casinos.

(65)

The Commission recognises the right of Member States to define under national law the qualification of a measure as being of a tax nature or otherwise. The Commission’s assessment is not in any way directed at interpreting national law. However, the measure has the effect of enabling a regular continuous payment to the State of 80 % of the correspondent price of all the admission tickets issued by each casino. Additionally, the Commission observes that according to national law (in particular the Law 2206/1994 and the Ministerial Decision of 1995), the respective amounts are deposited with the competent income tax office (47). In consideration of the above, and without it affecting in any way the qualification of the measure under national law, the Commission observes that the measure under assessment has effects similar to those of a fiscal measure. Therefore, for the sole purposes of this Decision and insofar as its assessment under EU State aid law is concerned, the Commission shall refer to the measure as a ‘fiscal measure’ or a ‘tax’ in the current Decision.

(66)

The measure under assessment, namely the fiscal discrimination produced by the joint effect of a uniform admission tax applied to unequal regulated prices of admission tickets, is placing the casinos owned by the State in Greece at an advantage over those privately owned. The joint effect of the two State actions makes that, while the privately owned casinos must pay to the State an admission tax of EUR 12 (80 % × 15) per person, the casinos owned by the State only pay EUR 4,8 (80 % × 6) (48).

(67)

By this measure the Greek State relieves the public casinos from a burden that otherwise they should bear if a non-discriminatory and competitive-neutral taxation were enforced. This non-discriminatory and competitive neutral taxation was, in principle, established in Greece by Law 2206/1994 on the creation, organisation, functioning and control of casinos which set at EUR 15 the price of admission tickets and at 80 % of that level the admission tax burden due to the State. However, by not enforcing this non-discriminatory and competitive neutral taxation in respect of the public casinos (and the assimilated private casino of Thessaloniki) and instead allowing them to pay only EUR 4,8 as admission tax, the Greek State has favoured these undertakings. These casinos have effectively paid a lower fiscal burden per person out of their respective total income. The Commission notes that this total income includes not only their admissions revenue (revenues made solely from the price of admission tickets), but also that from their other sources of income, such as gambling, accommodation, bar and restaurant services, shows etc. (total revenues).

(68)

It is settled case-law that the concept of aid includes not only positive benefits, but also measures which, in various forms, mitigate the charges normally included in the budget of an undertaking and which, therefore, without being subsidies in the strict sense of the word, are similar in nature and have the same effect (49). The advantage may be provided through a reduction in the undertaking’s tax burden in various ways, including a reduction in the tax base.

(69)

In this case, the casinos Corfu, Mont Parnès and Thessaloniki (as well as Rhodes casino, until 1999 (50)), benefit from an advantage similar to a reduction in the tax base, since, as previously explained, ad hoc provisions specific to these casinos set the tax which they must pay per admission at a lower level compared to that imposed on other casinos.

(70)

The Greek authorities observed that the direct beneficiary of a lower tax burden is the customer. However, even if it could be argued that the customer is also a beneficiary of a reduced tax burden per admission, since he pays a total lower price, this fact does not preclude the measure from providing an advantage to the relevant undertakings, in this case the beneficiary casinos, since they have to pay a lower amount of fiscal charges per customer received.

(71)

In fact, as shown in fiscal cases, derogations from taxes nominally paid by the consumer but collected by the supplier may potentially constitute State aid, as may other incentives to consumers to purchase particular products and services (51).

(72)

In line with past practice (52), the Commission believes that reductions in taxes on consumers can constitute State aid to undertakings when the reduction is conditional on the use of a particular good or service from a particular undertaking. The argument that the direct beneficiary is the customer is not therefore an obstacle to a finding of State aid.

(73)

Furthermore, given the customary commercial practice followed by casinos in Greece to waive the price of the admission tickets while paying to the State the admission tax (80 % of the face value of the admission tickets), the advantageous effect of the fiscal discrimination in favour of the public casinos is further reinforced, since the cost of the admission is notably higher for the private casinos with a higher admission tax of EUR 12 than for the public ones that only have to finance EUR 4,8 out of total revenue of their business.

(74)

The Greek authorities claimed that the practice of the beneficiary casinos of granting free admission on certain week days is exceptional. It remains the case that it is specifically provided for in the national law (Ministerial Decree of 1995). The Commission has evidence that, contrary to the argument made by Greece that such a practice is reserved for VIPs or famous customers, according to publicly available information (for example, leaflets offering free access distributed in newspapers and on the Internet), free admission is granted to any and all customers, on certain days a week, every week, as a customary practice (e.g. Thessaloniki Casino, advertises on its Internet page that it grants continuous free admission from Sunday to Thursday (53)). The practice of free admission does not appear to be exceptional among the beneficiary casinos.

(75)

As concerns the argument made by Greece that this practice is contrary to national tax law, the Commission reminds that the permission to grant free entrance is expressly provided for in the national law concerning casinos, and it manifestly is applied by the beneficiary casinos.

(76)

As to the argument that the expenditure from paying 80 % of the ticket price to the State from own resources is not recognised as productive expenditure and cannot be deducted from the company’s revenues under Greek tax law, thus exposing the company applying this practice to substantial tax burdens, the Commission observes that this argument actually favours the arguments made by the complainant, as to the fact that because of the significant tax burden resulting from the payment of the tax out of own revenues, a private casino cannot in practice afford to grant free admission, and thus reinforces the argument that this constitutes an advantage to the lower priced casinos.

(77)

Greece also contended that because casinos keep 20 % of the unequal admission price, the advantage is for casinos with a higher price that cash in a net revenue of EUR 3, compared to the EUR 1,2 for the public casinos. This contention is however in fact misleading, since it ignores two key facts to understand in full the true anti-competitive effects of the measure. On the one hand, the setting by regulation of the prices of tickets, including the admission tax, at a lower level for certain casinos, makes them more attractive for customers, thus (i) deviating demand from the pattern that would prevail if casinos would compete only on their own merits based on the individual scope and quality of the services offered and (ii) all other things equal, increasing artificially their level of admissions. On the other hand, as previously explained, the revenues from admissions are only a limited proportion of the total revenues that a customer attracted by a casino generates for the undertaking and out of which the casinos have to pay the admission tax.

(78)

Finally, it is to be noted that the existence of advantage in the fiscal discrimination is even recognised by the relevant national provisions themselves. As described by the Greek authorities, the subjection of the casino of Thessaloniki to the regime of lower priced admission tickets and (lower) tax is made on the basis of a Law of 1953 which grants to undertakings established with foreign capital the most favourable treatment granted to national undertakings. It can be observed that although the Greek authorities maintain that the said regime is not advantageous, this Law is nevertheless applied by the Greek authorities to the Thessaloniki casino on grounds that it is the most favourable treatment to national undertakings, by contrast with the more onerous one applied to other private casinos.

(79)

As concerns the subsidiary remark made by the Greek authorities and Mont Parnès regarding other differences between casinos in terms of various fiscal/regulatory measures, differences which allegedly favour Loutraki (the complainant) and would thus counter-balance the advantages that the beneficiaries enjoy due to the lower price of admission tickets (54), the Commission observes that the ‘offsetting’ of one measure (differences in general taxation) against another (differences in prices for admission tickets and their specific taxation) cannot be accepted as an argument that the measure under assessment does not constitute aid. In any case, as already mentioned, these aspects are separate and are not subject to the present Decision (see also paragraph 46 herein above).

(80)

In regard of all the above considerations, the Commission concludes that the measure under assessment, namely the fiscal discrimination produced by the joint effect of a uniform admission tax applied to unequal regulated prices, provides an advantage to the lowered priced casinos.

(81)

The advantage referred to above is imputable to the State and is financed by State resources.

(82)

As previously explained, the fiscal discrimination is the result of a series of administrative acts, decrees and regulations adopted by the Greek State, among which in particular: the Law 2206/1994; the Ministerial Decision of 1995; the Law 3139/30.4.2003, the Law 2687/1953; the decisions of the General Secretary of EOT (managing the public casinos) issued in accordance with Law 1624/1951 and Decree 4109/1960: EOT decision 535633/21.11.1991, setting the price of admission tickets to the Mont Parnès Casino at 2 000 drachmas; EOT decision 508049/24.3.1992 setting the price of admission tickets to the Corfu and Rhodes Casinos at 1 500 drachmas (later adjusted for the Corfu Casino to 2 000 drachmas by decision 532691/24.11.1997); the licenses granted to each casino under national law and confirming the respective price of admission tickets and the obligation to pay 80 % thereof as applicable to each casino.

(83)

Furthermore the fiscal discrimination under assessment is financed by State resources. If the State forgoes revenues which it would otherwise have to collect from an undertaking in normal circumstances, the relevant measure is financed by State resources.

(84)

In fiscal terms the fiscal advantage in this case results from the artificial reduction for the public casinos of the tax base on which the 80 % admission tax rate sits, from the general EUR 15 to the EUR 6 face value of the admission ticket in the public casinos.

(85)

In line with the Court’s case-law (55), this discriminatory reduction in tax base leads to a loss of tax revenue for the State, which is equivalent to consumption of State resources in the meaning of Article 107(1) of the TFEU. Thus, in general terms, in the case under assessment the Greek State forgoes fiscal revenue from the public casinos in the amount of EUR 7,20 per admission, which corresponds to the difference between the tax of EUR 12 per admission remitted to the State by the private casinos and the tax of EUR 4,80 per admission remitted to the State by the public casinos. However, some adjustments may be taken into account when evaluating the advantage received by each beneficiary casino (as further described in Section V.4 ‘Quantification and recovery’ herein below – more particularly, it would appear that until 2000 Mont Parnès and Corfu have not paid at all any admission tax to the State, therefore the advantage in that case is at the level of the tax of EUR 12 per admission remitted to the State by the private casinos).

(86)

Greece argued that, as the casinos with a lower price may thereby attract more customers, there is no certainty that the State forgoes revenue. Greece maintains that therefore the measure would not constitute State aid.

(87)

As already mentioned in the Opening Decision, the Commission does not accept this argument. In line with its previous practice (56), the Commission considers that the fact that a tax reduction in respect of certain tax payers can generate as a result an increase in the overall level of revenues collected under the relevant tax does not necessarily mean that the measure is not financed from State resources.

(88)

In fact the contention by the Greek authorities is erroneous in that the benchmark against which the Greek authorities test the effects of the fiscal discrimination on the State budget is biased by the advantage built in the measure. The Greek authorities introduce in their reasoning the dynamic effect of a reduction in price that might increase the demand and eventually the tax collected, since the latter is proportionate to the number of admissions. This comparison is however inaccurate, considering that it is the inequality itself created by the advantage, namely the fact that there is a lower price and the corresponding lower tax burden per admission, which makes the demand increase.

(89)

Anyway the Greek authorities have not provided any proof that the overall tax revenue of the admission tax on casinos is maximised with that pattern of unequal prices. In fact if the Commission were to follow the reasoning that a lowering of the admission price to EUR 6 produces an increase in tax collection, the tax revenue maximisation would take place at a level where all admission tickets are priced at EUR 6 for all casinos both private and public, contradicting the Greek contention that this point is reached with the fiscal discrimination resulting from the unequal prices.

(90)

Accordingly, the contested advantage is financed through State resources.

(91)

According to Article 107(1) of the TFEU, in order to constitute State aid, the measure must be specific or selective in that it favours ‘certain undertakings or the production of certain goods’.

(92)

According to the case-law of the Court of Justice (57), ‘as regards the assessment of the condition of selectivity, which is a constituent factor in the concept of State aid, it is clear from settled case-law that Article 87(1) EC [now Article 107(1) of the TFEU] requires assessment of whether, under a particular statutory scheme, a State measure is such as to “favour certain undertakings or the production of certain goods” in comparison with other undertakings which are in a legal and factual situation that is comparable in the light of the objective pursued by the system in question’ (58). The Court has also held on numerous occasions that Article 107(1) of the TFEU does not distinguish between the causes or the objectives of State aid, but defines them in relation to their effects (59). According to the Commission’s practice and the EU case-law concerning fiscal cases, the selective advantage involved may derive from an exception to the tax provisions of a legislative, regulatory or administrative nature or from a discretionary practice on the part of the tax authorities. However, the selective nature of a measure may be justified by ‘the nature or general scheme of the system’ (60), in which case the measure may be considered not to constitute State aid.

(93)

Firstly, the Commission observes that in the case under review the general tax system is constituted by the regime applicable (in principle) to all casinos, as established by the Law 2206/1994 and the implementing Ministerial Decision of 1995 (as also confirmed by the Greek authorities – see paragraph 19 herein above).

(94)

Secondly, the Commission notes that the measure at issue constitutes a departure from the application of the general tax system. As confirmed by the Greek authorities, the special provisions applicable to the public casinos (and the assimilated private casino of Thessaloniki) are considered exceptions from the application of the general provisions of the Law 2206/1994 and the implementing Ministerial Decision of 1995 (see also paragraph 19 and the following herein above).

(95)

The Commission observes that the requirement to remit 80 % of the price of admission tickets did not apply to the casinos of Mont Parnès and Corfu until 2003. As noted above, as concerns the casinos of Thessaloniki and Rhodes, this requirement became applicable upon issuance of their license under the Law 2206/1994, namely since 1995 in the case of Thessaloniki, and since 1996 in the case of Rhodes. As concerns the price of admission tickets, it has remained at EUR 6 in the case of Mont Parnès and Thessaloniki until present, for Corfu until its privatisation in August 2010, and for Rhodes until its privatisation in 1999. However, both the requirement to remit 80 % and the price of admission tickets of EUR 15 applied to other casinos as of 1995 and have been in practice applied as such.

(96)

In consideration of all the above, the Commission considers that the measure is selective.

(97)

Thirdly, the Commission observes, however, that the selective nature of a measure may be justified by ‘the nature or general scheme of the system’, that is to say, whether the exceptions to the system or differentiations within that system derive directly from the basic or guiding principles of the tax system in the Member State concerned (third step of the selectivity analysis). If so, the Commission considers that, under the settled case-law of the Court (61) the measures introducing a differentiation between undertakings when that differentiation arises from the nature and overall structure of the system of charges of which they form part do not constitute State aid. This justification based on the nature or overall structure of the tax system reflects the consistency of a specific tax measure with the internal logic of the tax system in general. However, the Commission’s practice and the Court’s case-law have adopted a very restrictive approach for these justifications. Only reasons inherent in the tax system can be invoked.

(98)

The Greek authorities stated that the individual circumstances of each casino are different, and that the prices of admission tickets are set in function of those circumstances, taking account of the objective of setting such a price which is to discourage persons of low income from gambling.

(99)

The Commission cannot accept these arguments. The argument that the level of the price is set according to and justified by the circumstances of each individual casino, taking account of the objective of discouraging persons of low income from gambling, cannot be reconciled with the fact that the casinos of Mont Parnès and Thessaloniki, which apply the price of EUR 6, are both close to major centres of population in Greece. Nor can it be reconciled with the explicit possibility to admit customers without payment provided that 80 % of the price is nonetheless remitted to the State.

(100)

Furthermore, the Commission also observes that it is not apparent why this lower price is necessary as concerns these casinos specifically and not in the case of other casinos, nor have the Greek authorities explained the economic calculation for setting the lower price of admission tickets at the specific level of EUR 6 and not another intermediary level, and if individual circumstances are concerned, which according to Greece mainly consist in the geographical situation of each casino, why all the beneficiary casinos are (in principle, see above) obliged to charge the same price of admission tickets and not a ‘personalised’ one, adapted to their individual situation. As an example, should the lower price of admission tickets be justified by the specificities of the individual geographical situation of each of the casinos, than such reasoning in any case would not apply to the casino of Thessaloniki who seems to enjoy this treatment not in consideration of its geographical situation, but in consideration of a national provision granting to undertakings established with foreign capital the most advantageous treatment applicable to national undertakings. Thus, the geographical situation of the casino of Thessaloniki does not appear to have been taken into consideration at any time in setting the price of its admission tickets. As a further example, in August 2010, the Corfu Casino passed to EUR 15 upon its privatisation. However, the Greek authorities have not satisfactorily explained why at that time the abovementioned special circumstances no longer applied and thus why the lower price of admission tickets was no longer necessary in consideration thereof.

(101)

In light of all the above, the Commission concludes that the selective character of the measure in review is not justified by the nature of the general system. Therefore, the contested measure is considered to include a discriminating element, in the form of a reduction in the tax base resulting in a fiscal advantage benefiting to individually determined casinos, discrimination which is not justified by the logic of the Greek general relevant tax system.

(102)

Accordingly, the Commission therefore concludes that the criterion of selectivity in the sense of Article 107(1) of the TFEU is met in the present case.

(103)

In order to constitute State aid the measure must affect competition and trade between Member States. This criterion supposes that the beneficiary of the measure exercises an economic activity, regardless of the beneficiary’s legal status or means of financing.

(104)

According to the Court’s case-law (62), ‘for the purpose of categorising a national measure as prohibited State aid, it is necessary, not to establish that the aid has a real effect on trade between Member States and that competition is actually being distorted, but only to examine whether that aid is liable to affect such trade and distort competition. In particular, when aid granted by a Member State strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade, the latter must be regarded as affected by that aid. […] In addition, it not necessary that the beneficiary undertaking itself be involved in intra-Community trade. Aid granted by a Member State to an undertaking may help to maintain or increase domestic activity, with the result that undertakings established in other Member States have less chance of penetrating the market of the Member State concerned.’ Moreover, under settled case-law of the Court (63), for a measure to distort competition and affect trade between Member States it is sufficient that the recipient of the aid competes with other undertakings on markets open to competition in the internal market (64). The Commission considers that the conditions set out in the case-law are fulfilled for the following reasons.

(105)

The contested measure alleviates the taxes that the beneficiaries have to pay with respect to the rest of casinos in Greece, thereby strengthening their comparative financial position and increasing the profitability of their investments as opposed to a situation where their profitability would be exclusively based on their own merits.

(106)

As above mentioned, under settled case-law, the criterion of trade being affected is met if the recipient firm carries on an economic activity involving trade between Member States. The mere fact that the aid strengthens the firm’s position compared with that of other firms which are competitors in intra-European trade is enough to allow the conclusion to be drawn that intra-European trade is affected. Neither the fact that aid is relatively small in amount, nor the fact that the recipient is moderate in size or its share of the European market very small, nor indeed the fact that the recipient does not carry out exports or exports virtually all its production outside the European market do anything to alter this conclusion (65).

(107)

Greece argued that the situation of the casinos and the distances between them mean that each serves a local market and therefore that the measure cannot distort competition or affect trade between Member States. However, pursuant to case-law (66), there is no threshold in order to determine the actual or potential effect on competition and on trade between Member States, and therefore, this condition for applying Article 107(1) of the TFEU may be completed independently of the local or regional provision of the services concerned or the importance of the field of activity concerned.

(108)

Greece also argued that the gambling market is not harmonised between Member States, who are therefore free to regulate it at national level. Greece invoked the jurisprudence of the Court which allows restrictions to the single market for gambling services in the name of protection of consumers from fraud and criminality (67).

(109)

The Commission fully respects the right of Member States to set the objectives of their policy in the area of gambling provided that any restrictions on the freedom to provide services are suitable for achieving the objectives pursued, do not go beyond what is necessary in order to achieve those objectives and are applied in a non-discriminatory manner. However the Commission cannot accept that these arguments deprive the measure at issue of any effect of distortion of competition or on trade between Member States.

(110)

The operators in the sector are often international hotel groups (68) that compete which each other, whose decision whether to invest or divest in casinos or other hotel facilities are affected by the measure, since it impacts the comparative profitability of these groups and their investments. Casinos are often sited in tourist destinations, which would indicate that the presence of a casino may act as an attraction to tourists to visit Greece. Indeed casinos fell under the responsibility of the Ministry of Tourism in Greece. In addition, the Commission notes that there is a certain cross-border mobility of customers; moreover, casino services are themselves operated in a cross-border environment – for instance, casinos operate such services on cruise ships linking Greece to Italy and other destinations. More widely, some persons wishing to gamble may be able to choose between gambling in a casino and doing so on line. On line gambling is an international business and gamblers in Greece may be able to access such services provided by operators in other Member States. The case referred to by Greece (see paragraph 108) in fact concerned Internet gambling. The Greek authorities disputed the possibility of competition with other forms of gambling cited in the Opening Decision, noting that Internet gambling is currently illegal in Greece. However, and despite the current legal situation in Greece, the Greek authorities have recognised themselves that Internet gambling has in fact grown ‘to uncontrollable proportions’ (69). In this context reference should also be made to the judgement of the Court of Justice in Case C-65/05 Commission v Greece (70) in which the Court held that Law 3037/2002 which aimed at banning Internet gambling in Greece amounted to an unjustified barrier to the freedom of establishment and the freedom to provide services.

(111)

Furthermore, the overall economic crisis affects consumer habits and disposable income for entertainment purposes such as using casino services. In this particular context a differentiation in prices of admission tickets has an even more significant distortive impact on the choices made by consumers and thus is liable even more so to distort competition on the casino market.

(112)

As concerns the argument proposed by the authorities and Mont Parnès that even if the view were taken that the reduced price of admission tickets of EUR 6 might have influenced or may influence the decision of a foreign company to invest in a casino business in Greece, the foreign company could always avail itself of Law 2687/1953, the Commission observes that the application of the Law of 1953 is not automatic and would in fact allow the further granting of the more advantageous treatment granted to the beneficiary casinos (i.e. the lower price of admission tickets of EUR 6) to other undertakings. This measure would thus be liable to further propagate the fiscal discrimination under assessment. Furthermore, the Commission notes that although the Law 2687/1953 could have been invoked by other casinos, if they had brought in capital from abroad and had submitted the application in good time, its application is subject to certain specific arbitrary rules that make it a selective measure. In fact, the only one other example of potential application of this Law that has been brought to the attention of the Commission – namely concerning the casino on Syros, who submitted an application under this law – was refused because the application was submitted after the importing of the foreign capital (and not ahead of this).

(113)

The Commission notes, further, that when the casino of Mont Parnès was privatised, the possibility of a licence for a second casino with the same region was specifically provided for in the sale. Clearly the likelihood of investment in such an operation would depend on the conditions of competition with the existing operator. Since it can not be ruled out that casinos are competing with similar companies in another Member State, this requirement pursuant to Article 107(1) of the TFEU must be regarded as fulfilled.

(114)

Therefore the Commission concludes that the contested measure is liable to distort competition and affect trade between Member States by potentially improving the operating conditions of the beneficiaries being directly engaged in economic activities, which are liable to pay this tax on admissions in casinos in Greece.

(115)

Given all the above considerations, the Commission concludes that the criteria for the existence of aid within the meaning of Article 107 of the TFEU are met and that the measure constitutes State aid in favour of the casinos with a lower price of admission tickets. These casinos are Mont Parnès, Corfu, Thessaloniki and Rhodes. In the case of Rhodes, the Commission understands that the casino is no longer a beneficiary (as it stopped practicing the lower price of admission tickets upon its privatisation in April 1999). The Commission considers that neither the Greek authorities nor Mont Parnès have advanced any argumentation which would be sufficiently articulated to alter this conclusion.

(116)

As stated in the Opening Decision, the Commission considers that the measure in question does not qualify for any of the derogations laid down in Article 106 or 107 of the TFEU.

(117)

Greece has so far argued that there is no State aid involved and has not offered any arguments as to why any aid would be compatible.

(118)

The Commission recognises, as noted above, the right of Member States to regulate gambling on their territory subject to EU law, and that such regulation in order to control and discourage gambling is a legitimate objective of public policy. However the Commission does not believe that this brings the aid, even if this is its objective, within the remit of Article 106(2) of the TFEU. In any event, as noted above, the argument that the measure has the objective of discouraging gambling cannot be reconciled with the fact that the casinos which apply the price of EUR 6 include those closest to the major centres of population in Greece. Nor can it be reconciled with the explicit possibility to admit customers without payment provided that 80 % of the price is nonetheless remitted to the State.

(119)

The derogations in Article 107(2) of the TFEU, concerning aid of a social character granted to individual consumers, aid to make good the damage caused by natural disasters or exceptional occurrences and aid granted to certain areas of the Federal Republic of Germany, do not apply in this case.

(120)

Nor does the derogation provided for in Article 107(3)(a) apply, which authorises aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment because the measure is not conditional on realising any type of activity in specific regions (71).

(121)

In the same way, the contested measure cannot be regarded as promoting the execution of a project of common European interest or remedying a serious disturbance in the economy of Greece, as provided for in Article 107(3)(b). Nor does it have as its object the promotion of culture and heritage conservation as provided for in Article 107(3)(d).

(122)

Finally, the contested measure shall be examined in the light of Article 107(3)(c), which provides for the authorisation of aid to facilitate the development of certain economic activities or of certain economic areas, where such an aid does not adversely affect trading conditions to an extent that is contrary to the common interest. In this respect, however, it is noted that the contested measure does not fall under any of the applications of this subparagraph which the Commission has promulgated, or under any of the frameworks or guidelines, which define the conditions to consider certain types of aid compatible with the internal market.

(123)

The contested measure constitutes operating aid that artificially reinforces the competitive position of certain undertakings over other similar undertakings and is not conditional upon the realisation by the beneficiaries of any specific action aiming at the achievement of policy objectives of common interest.

(124)

In particular, the Commission notes that the advantage granted under the contested measure is not related to investment, job creation or specific projects. It simply relieves the undertakings concerned of charges normally borne by similar undertakings and must therefore be considered as operating aid. As a general rule, operating aid does not fall within the scope of Article 107(3)(c) since it distorts competition in the sectors in which it is granted and is at the same time incapable, by its very nature, of achieving any of the objectives laid down in that provision (72). Although exceptionally such aid may be granted in regions eligible under the derogation in Article 107(3)(a) of the TFEU and although certain regions of Greece are so eligible, the Commission has severe doubts whether the conditions for compatibility of such operating aid are met in the current case. In line with the standard practice of the Commission, such aid cannot not be considered compatible with the internal market, as it does neither facilitate the development of any activities or economic areas nor it is limited in time, digressive or proportionate to what is necessary to remedy to a specific economic handicap of the areas concerned.

(125)

In light of the above, it must be concluded that the measure under review is incompatible with the internal market.

(126)

As stated in the Opening Decision, in view of the fact that the first acts producing the fiscal discrimination between casinos date from 1994 and 1995, the Commission has considered whether the measure in its entirety represents existing aid in the sense of Article 108(1) of the TFEU.

(127)

The fiscal discrimination was introduced in 1995 illegally– that is, from the perspective of EU State aid law – by the choice made by the Greek authorities to allow in favour of certain casinos derogations from the general rule deriving from the Law 2206/1994 and the Ministerial Decision of 1995. In particular, the Greek authorities allowed the public casinos of Mont Parnès, Corfu and Rhodes to continue to apply a lower price of admission tickets of EUR 6 instead of the standard price of EUR 15, and furthermore, also specifically granted this more advantageous treatment to the casino of Thessaloniki in 1995, based on the Law of 1953 (concerning foreign capital). Meanwhile, this standard level of EUR 15 was imposed and effectively respected by the 5 other private casinos which were established and licensed (under the Law 2206/1994) since 1995. Furthermore, by virtue of the Law 3139/2003 the lower price of EUR 6 for admission tickets was specifically maintained for the casinos of Mont Parnès and Corfu, with the effect of illegally prolonging and confirming the fiscal discrimination. As concerns the casino of Thessaloniki, it is noted that it benefits from the fiscal discrimination by assimilation with the casinos of Mont Parnès and Corfu as confirmed in the Presidential decree 290/1995, based on the Law of 1953, as described herein above. The regime applicable to Thessaloniki is intimately linked to the regime applicable to Mont Parnès and Corfu. As described by the Greek authorities (73), when the issue of the price of admission tickets was raised after 1995, the management of the Thessaloniki casino asked that it be set at the same level as that of the Casino Mont Parnès, i.e. at EUR 6, and this request was accepted, following an opinion from the Legal Council of State (Opinion 631/1997/EC). Therefore it can be assumed that, had the treatment of Mont Parnès and Corfu changed in 2003 and had the two casinos passed to EUR 15 at that time, then the treatment of casino Thessaloniki would also have changed. However, this was not the case, and the fiscal discrimination was maintained by virtue of national provisions.

(128)

None of the measures described above, benefiting the beneficiary casinos, were ever notified to nor approved by the Commission, certainly not under the EU State aid rules.

(129)

The Commission recalls that pursuant to Article 15 of the Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules of application of Article 93 of the EC Treaty (74), the powers of the Commission to recover aid shall be subject to a limitation period of 10 years. The limitation period shall begin on the day on which the unlawful aid is awarded to the beneficiary either as individual aid or as aid under an aid scheme. Any action taken by the Commission or by a Member State, acting at the request of the Commission, with regard to the unlawful aid shall interrupt the limitation period. Each interruption shall start time running afresh. The limitation period shall be suspended for as long as the decision of the Commission is the subject of proceedings pending before the Court of Justice. Any aid with regard to which the limitation period has expired, shall be deemed to be existing aid. However, pursuant to Article 1(c) of the same regulation, alterations to existing aid constitute new aid.

(130)

The Commission observes that according to the case-law of the EU Courts ‘the limitation period provided for in Article 15 of the Regulation on State aid procedure, which does not in any way express a general principle whereby new aid is transformed into existing aid but merely precludes recovery of aid established more then 10 years before the Commission first intervened’ (75).

(131)

In the current case, the Commission did not take action, nor did Greece act at the request of the Commission, before 2009. The Commission took such an action on 21 October 2009 when it communicated the complaint to Greece and requested information in this regard.

(132)

Therefore, any aid awarded under this measure as of 21 October 1999 (10 years before the day on which the Commission forwarded the complaint to the Greek State and requested information) is new and unlawful aid, which has been put into effect without prior notification or decision of the Commission, subject to the application of Article 15 of the Procedural Regulation as regards recovery (as further described herein below).

(133)

The contested measure was implemented without having been notified in advance to the Commission in accordance with Article 108(3) of the TFEU. Therefore, the measure constitutes unlawful aid.

(134)

Where unlawfully granted State aid is found to be incompatible with the internal market, the consequence of such a finding is that the aid should be recovered from the recipients, unless this would be contrary to a general principle of law, pursuant to Article 14 of Regulation (EC) No 659/1999. Through recovery of the aid, the competitive position that existed before it was granted is restored as far as this is possible. No arguments raised by the Greek authorities or by Mont Parnès justified a general departure from this basic principle.

(135)

The Commission observes that Article 14(1) of Regulation (EC) No 659/1999 provides that ‘the Commission shall not require recovery of the aid if this would be contrary to a general principle of community law’. The case-law of the Court of Justice and the Commission’s own decision-making practice have, amongst others, established that where, as a result of the Commission’s actions, legitimate expectations exist on the part of the beneficiary of a measure that the aid has been granted in accordance with EU law, then an order to recover the aid would infringe a general principle of EU law (76).

(136)

In its judgement in Forum 187 (77), the Court stated that ‘the right to rely on the principle of the protection of legitimate expectations extends to any person in a situation where a Community authority has caused him to entertain expectations which are justified. However, a person may not plead infringement of the principle unless he has been given precise assurances by the administration. Similarly, if a prudent and alert economic operator could have foreseen the adoption of a Community measure likely to affect his interests, he cannot plead that principle if the measure is adopted’.

(137)

In this respect, as concerns arguments made by the Greek Authorities and Mont Parnès alleging that any recovery of that aid would run counter to the principle of reasonable confidence of the subject of administration, in this case, based on a ruling of the Greek Council of State under national law, the Commission observes that this is a national act taken by a national authority and not an EU authority in the sense of the above cited case-law. Furthermore this act was based solely on national law and did not in any way discuss any State aid issue or qualification. In consideration of the above, the Commission cannot waive recovery based on these arguments.

(138)

As concerns the arguments made by Greece and Mont Parnès regarding the delayed action undertaken by Loutraki in lodging a complaint with the Commission, in connection with a principle that a right should not be exercised abusively, the Commission observes that delayed action by a complainant cannot in any case preclude from recovering unlawful aid, otherwise as deriving from the 10 years limitation period set forth pursuant to Article 15 of the Procedural Regulation.

(139)

Therefore the Commission cannot follow the arguments proposed by the Greek authorities and Mont Parnès in order to exceptionally waive recovery.

(140)

As described in the present Decision, the Commission observes that it was first through the national acts of 1994 and 1995 that both the requirement to remit 80 % of the value of admissions and the standard price of EUR 15 for the admission tickets for all casinos were set. However, both the requirement to remit 80 % and the standard level of the price of EUR 15 did not apply to the beneficiary casinos although they did apply to other casinos as of 1995 and have been in practice applied as such (all private casinos were licensed during 1995-96 and began implementing the measure, with the only exception of Thessaloniki casino). Thus, considering that de facto the fiscal discrimination resulting from the differentiation in prices of admission tickets and the related 80 % payments to the State started as of 1995, the period of implementation of the aid can be considered to begin in 1995.

(141)

In line with the conclusion under Section V.3 herein above (Legality of the aid), the Commission therefore considers that the limitation period of 10 years, provided for in Article 15 of the Procedural Regulation (EC) No 659/1999, applies to any aid awarded before 21 October 1999.

(142)

In the calculation of the amount to be recovered account must be taken that as described in the present Decision (see also paragraph 85 herein above), the Greek State forgoes fiscal revenue from the public casinos in the amount of EUR 7,20 per admission, which corresponds to the difference between the tax of EUR 12 per admission remitted to the State by the private casinos and the tax of EUR 4,80 per admission remitted to the State by the public casinos.

(143)

However, certain aspects relating to the individual situation of each casino may be taken into account for the purposes of calculating the amount of the recovery from each casino, as described below:

(144)

As concerns the calculation of the amount of aid to be recovered, the Commission is not in possession of sufficient data in order to provide an accurate estimation of the amounts to be recovered from each beneficiary casino. However, no provision of EU law requires the Commission, when ordering the recovery of aid declared incompatible with the internal market, to fix the exact amount of the aid to be recovered. It is sufficient for the Commission’s decision to include information enabling the Member State concerned and the relevant recipient undertaking to work out themselves, without overmuch difficulty, that amount. The Commission is therefore able legitimately to confine itself to declaring that there is an obligation to repay the aid in question and leave it to the national authorities to calculate the exact amounts to be repaid on the basis of the guidance given by the Commission in its decision.

(145)

Based on the information submitted by the Member State, the Commission provides herein below the necessary guidance for the recovery.

(146)

The Table below presents a general overview of the number of tickets issued by each casino each year (however, as indicated in the Table, the information presented is not complete), and a preliminary estimate of the amounts to be recovered from each casino, subject to further observations that Greece may wish to submit following its calculations as concerns recovery.

Estimated number of tickets issued by each casino

Preliminary estimate of the amount to be recovered per casino

(million EUR in rounded numbers)

(147)

The Commission further observes that Article 108(3) of the TFEU has suspensory effect. However, the Commission has not received information on whether the contested measure was suspended further to the Opening Decision. Consequently, it must be assumed that the measure has continuously been implemented by the Greek authorities until present (83). Any aid granted until the adoption of the present Decision should be recovered by Greece from the respective beneficiaries. In this regard, as concerns the Corfu casino, the Commission notes that it has stopped applying the EUR 6 price of admission ticket and passed to EUR 15 as of its privatisation of August 2010, therefore in the calculation of the amount of the recovery only the period until August 2010 should be taken into account.

(148)

In consideration of all the above arguments, the Commission therefore orders recovery by Greece of the incompatible State aid illegally granted to the beneficiaries. The Commission recalls that Greece must cancel all outstanding fiscal advantage provided under the measure under assessment with effect from the date of adoption of this Decision.

(149)

In this regard, the Commission notes that as concerns the future, Greece has indicated that it is examining a potential change of the pricing policy of casinos, in order to eliminate discriminations between casinos. The Commission notes that according to Greece, this new legislation will put an end to the measure under assessment. However, Greece has not informed the Commission of the follow up and possible implementation of such change. The Commission believes that the adoption of such new legislation is critical to the resolution of issues of discrimination between casinos in Greece and encourages Greece to take the necessary steps without delay.

(150)

The Commission considers that, in the light of the abovementioned considerations, of the relevant case-law and of the specificities of the case, the contested measure, consisting of the fiscal discrimination that the Greek authorities have put into place in favour of certain casinos through the implementation of several simultaneous legal provisions concerning:

constitutes State aid within the meaning of Article 107(1) of the TFEU. The Commission also finds that the contested measure having been implemented in breach of Article 108(3) of the TFEU constitutes an unlawful aid.

(151)

The Commission observes that pursuant to Article 14 of Regulation (EC) No 659/1999, all unlawful aid may be recovered from the recipient and orders recovery by the Hellenic Republic of the unlawful aid from each of the beneficiary casinos. The Commission notes that the limitation period of 10 years, provided for in Article 15 of the abovementioned Procedural Regulation applies to any aid awarded before 21 October 1999. The Hellenic Republic shall cancel all outstanding fiscal advantage provided under the measure subject to the present Decision, with effect from the date of adoption of this Decision.