The Court of Justice of the EU (CJEU) ruled last week in the case C-49/16 (Unibet International against Hungary) that member states are not allowed to restrict gambling operators licensed in another EU member state from operating in local markets if these restrictions are imposed in a discriminatory or non-transparent manner:
“In those circumstances, the Court of Justice concludes that the principle of the freedom to provide services […] precludes that legislation.
Finally, the Court of Justice states that no penalties may be imposed on the basis of rules held to be contrary to the principle referred to above.”
Maarten Haijer, Secretary General of International industry body EGBA, commented:
“The Court’s ruling is a clear message to other Gaming Authorities, including the Dutch Gaming Authority, that they must not enforce a regulation that does not comply with basic EU law. We expect these Member States to reconsider and lift these enforcement measures as they are acting in violation of EU law. Their actions do not serve the interest of consumers, they fail to channel the consumers to reliable providers, instead they merely prop up failed regulation.”
Haijer added that the CJEU, as well as the Dutch Council of State, found in 2011 and 2013 that current Dutch gambling legislation is in violation of EU law.
“There is no other alternative for the Netherlands Gaming Authority but to immediately cease its current enforcement measures,” Haijer said.
Noted gaming lawyer Justin Franssen of Kalff Katz & Franssen offered the following preliminary response(a more extensive analysis is expected later this week):
“Whilst the specific regulatory circumstances in the Netherlands differ from those in Hungary, it must be noted that both the CJEU and the Dutch Council of State established years ago in the Betfair case that the license allocation system pertaining to sports (and horserace) betting breached Community law. […]
This situation forced various parties to re-engage in license allocation litigation. To date, all relevant cases have been lost by the Dutch authorities. This cannot come as a surprise given the preceding judgments of both the CJEU and the Council of State. Nevertheless, up and until today, the Dutch authorities refuse to introduce proper EU compliant procedures pertaining to allocation of gaming licenses.
Unfortunately, this leaves the industry with no other option than to continue with legal proceedings. In case the outcome of pending cases are not materially different from existing judgments, then this may impact the enforcement capabilities of the Netherlands Gaming Authority and the Public Prosecutor’s Office.”
If the Netherlands Gaming Authority will indeed be limited in its enforcement options, there is a good chance the country will see the return of an extensive gray online market for the foreseeable future, according to gaming consultant Michael Ellen of Regulus Partners:
“KSA has also indicated that it is now running a no-warnings enforcement policy on websites ‘targeting Dutch players,’ a concept they explain by listing specific examples. […] and then ‘If you don’t target a Dutch consumer, it’s very acceptable.’
However, in order to do this, Dutch law and enforcement will need to be both transparent and equitable (eminently achievable but easy to fail) or risk CJEU opprobrium.”
Asked to comment on the CJEU’s decision, the Netherlands Gaming Authority issued the following statement:
“The CJEU verdict does not lead to any new considerations that are relevant to the Netherlands Gaming Authority or Dutch gambling policy. The Netherlands Gaming Authority will, therefore, continue its current enforcement policy.
The allegation that current Dutch gambling legislation is contrary to EU law is incorrect. Over the years, the Dutch Gambling Act has been regularly tested against European regulations and has met this test every time. In addition, the Gaming Authority has so far won all legal proceedings on sanctions.”
You must be logged in to post a comment.