Online gambling ruling reconfirms urgent need for an EU framework

CJEU strongly questions the compliance of the Austrian gambling legislation with EU law stressing in particular that, in order to justify a monopoly, legislation must "ensure a particularly high level of protection," indicated paragraph 54 of the ruling.

National legislation establishing a monopoly “must genuinely be based on a finding that the crime and fraud linked to gaming are a problem in the Member State concerned” – said a CJEU press release, that added: “Only advertising which is moderate and strictly limited to what is necessary to channel consumers towards controlled gaming networks is permisible”.

A "policy of expanding games of chance characterised inter alia by the creation of new games and by the advertising of those games, such a policy cannot be regarded as being consistent unless the scale of unlawful activity is significant. The objective of protecting consumers from addiction to gambling is in principle difficult to reconcile with a policy of expanding games of chance," stated paragraph 67 of the ruling.

"A distinction must therefore be drawn between a restrained commercial policy seeking only to capture or retain the existing market for the organisation with the monopoly, and an expansionist commercial policy whose aim is to expand the overall market for gaming activities" – pointed paragraph 69 of the ruling. “An expansionist commercial policy whose aim is to expand the overall market for gaming activities is not consistent with the objective of fighting crime and fraud,” added CJEU press release.

EGBA stresses that Member States have failed to evidence the suitability of their monopolies to guarantee a particularly high level of consumer protection which is a requirement to justify a measure as restrictive as a monopoly. This is in line with the recent conclusions of an expert workshop set up by the European Commission stating that “the regulatory system in place in a Member State, be it a licensing system or a monopoly, does not seem to have a significant impact on the degree of problem gambling or gambling addiction.”

In the case at hand, it is now up to the national court to decide whether the Austrian internet monopoly does in fact provide a particularly high level of consumer protection as required by steady CJEU case law. The CJEU notes that the Austrian referring court has already expressed its doubts in that respect (paragraph 59 of the ruling). The EGBA therefore expect the criminal charges against Dickinger and Ömer to be dismissed.

Importantly, the Court concludes once more on the absence of harmonisation of gambling legislation at EU level.

Sigrid Ligné, Secretary General of the EGBA, commented: “Increasingly, the Member States of the EU are regulating the online gaming market on a multi license basis and that trend is also fostered by the European Commission pushing forward its Green Paper process on online gaming. This ruling signals yet again the urgent need for a comprehensive EU framework taking fully into account the cross border dimension of online gambling.”   

This case is the second CJEU preliminary ruling involving Austrian gambling legislation. In September 2010, the Court already concluded that Austrian legislation is in conflict with EU law due to a lack of transparency in the procedure for granting casino licenses. In this ruling the CJEU had confirmed that the requirement of a seat cannot be justified by overriding public interest objectives as there are less restrictive measures to guarantee effective control of gaming operators.