Aid to local sports clubs and associations does not always constitute state aid. In June 2017, the European Commission found that (i) aid from the Danish Lottery is not state resources and (ii) aid granted by municipalities to local fitness centres did not affect trade between member states. The Commission concluded that the aid did not constitute state aid.
The case concerned the Sports Confederation of Denmark (DIF) and the Danish Gymnastics and Sports Associations (DGI) who have worked together since 2008 to help Danish local sports associations set up local fitness centres. The funding received by the local fitness centres was given through an association owned by DIF and DGI. The funding consisted of surplus funds from the Danish Lottery. The funds were allocated from the Danish Ministry of Culture to DGI and DIF on a yearly basis. Furthermore, the aid consisted of municipal support granted under the Danish Act on Non-formal Education and Democratic Voluntary Activity (“Folkeoplysningsloven”).
The case was initiated by a complaint from a Danish trade association for commercial fitness and healthcare activities. The complainant argued that the funding of local fitness centres gave an advantage to the local fitness centres and distorted the competition between local fitness centres and commercial fitness centres.
The European Commission: The measures did not constitute state aid
The European Commission concluded in its decision of June, 22 2017 (SA.37900) that the measures did not constitute state aid since two of the five cumulative conditions were not fulfilled.
The European Commission found that the surplus funds from the Danish Lottery did appear to constitute state resources, since it was allocated by the Danish Ministry of Culture. However, the Ministry did not have any influence on the allocation of funds to the local fitness centres. This lead to the conclusion that the aid could not be imputed to the state and therefore did not qualify as resources under public control in a state aid context.
The aid granted by municipalities under a Danish act was found to constitute state resources and was also imputable to the State. The Commission also found that the aid provided a selective advantage to the local sports associations. Nevertheless, the Commission concluded that the measure did not constitute state aid since it did not affect the trade between member states. The Commission found that the interest in local fitness centres would not go beyond the neighbouring municipalities, and in any case not extend into other member states.
The conclusion is in line with previous cases. The same reasoning was applied to funding of a leisure pool in the German town of Dorsten (case N258/2000), funding of a sport camp in Bavaria (case SA.43983) and a tax advantage granted to UK Golf Clubs (case SA.38208).
The Danish State Aid rules may still apply in cases where the trade between member states is not affected. However, the Danish Competition Act does not apply to aid granted in accordance with national regulation.