State Aid: COM publishes evaluation grid for sport infrastructure and approves Danish support scheme for horseracing sector

Created on Saturday, 13 Jan 2018 01:20:54

On 12 December 2017, the European Commission published an analytical grid for sport and multifunctional recreational infrastructures. With this guidance the Commission provides an overview for public authorities and sport organisations to identify when public funding can be granted without approval under EU State aid rules.

The European Commission has an exclusive competence to exercise a prior control over State Aid to ensure that the Member States do not disturb competition and trade within the Internal Market. However, the General Block Exemption Regulation (GBER), adopted by the EU in 2014, and updated in 2017, offers several possibilities for Member States to provide public support for certain categories of state aid without prior Commission approval, including for sport infrastructure.

Funding for construction, renovation and operation of “sport infrastructure” such as stadiums, multifunctional arenas, sport and wellness facilities, marinas, and climbing halls fall under State Aid rules if the structures are used on commercial basis and thereby has an economic impact. At the same time, there are several options in which the existence of state aid may be excluded:

  1. If infrastructure is not commercially exploited, for example where it is accessible to the general public free of charge. In cases of use for both economic and non-economic activities by limiting the public funding to the net cost of the non-economic activities or if the economic activities are purely ancillary and do not exceed 20% of the infrastructure's overall capacity.
  2. If there is no potential effect on trade between Member States. This is at the one hand covered by the de minimis rules if the aid granted is lower than 200.000 € to a single undertaking over a period of three years. Above this threshold, cases with purely local impact would not have an impact on trade, i.e. if services are supplied to a limited area within a Member State and it cannot be foreseen that the measure will have more than a marginal effect on the conditions of cross-border investments or establishment.
  3. If there is no economic advantage to the owner of the infrastructure, for example if the state acted under the same conditions and terms as a private investor in a comparable situation.
  4. Similarly, if there is no economic advantage to an operator/concessionaire. This can be ensured by a tender or fees that are in line with normal market conditions. Also, The existence of an economic advantage at the level of the operator may be excluded, if operation of the infrastructure entrusted as a service of general economic interest (SGEI) in line with the Altmark criteria. Additionally, regarding SGEI an extended de minimis condition of 500.000 € applies.
  5. If there is no economic advantage to the users, in case they are undertakings.

Additionally, there are two conditions under which state aid might be considered compatible with the internal market without notification:

  1. The measure is exempted from notification if it is granted in conformity with the conditions of the GBER. In particular, Article 55 of the GBER allows aid for sport and multifunctional recreational infrastructures up to 30 million € of total costs up to 100 million € per project, or operating aid of up to 2 million € per infrastructure per year.
  2. If the sport infrastructure is constructed or renovated to facilitate the provision of an SGEI, it may be considered as part of the SGEI mission. State aid for the compensation of such an SGEI up to 15 million € per year (on average over the whole duration of the entrustment) may be exempted from notification on the basis of the SGEI Decision

If the state aid meets none of these conditions, it requires notification to the Commission, which assesses it either under Article 107(3)(c) TFEU (taking into account Article 165 TFEU) or on the basis of the SGEI Framework, for State aid for sport infrastructure which is necessary for the provision of a genuine SGEI and exceeds EUR 15 million per year.

The detailed information, as well as references to past state aid decisions on sport infrastructure can be found in the document attached below.

On 4 December 2017, the European Commission furthermore published a decision approving the reform of a scheme supporting the horseracing sector in Denmark under EU State aid rules. The sector for horserace betting in Denmark is currently subject to a gambling monopoly but is being liberalised, which will allow the emergence of betting companies. Under the scheme, as of 1 January 2018, the horseracing sector will receive a share of the turnover of betting companies from horserace betting through an 8% levy. The Commission has endorsed the reformed scheme, because it recognises that it is essential for the improvement of horse breeding and horseracing without giving rise to undue distortions of competition.

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