EU COURT JUDGES AS ILLEGAL THE HUNGARIAN ONLINE GAMBLING LICENCING REGIME

Significant news for the Industry arrived in February 28th as the Court of European Justice (CJEU) ruled that the Hungarian policy of issuing online gambling licenses only to the companies that already have terrestrial casinos for at least 10 years in that country, infringes the EU acquis on the freedom of services and goes, as assessed, “beyond what may be considered necessary”.

The case was brought by Sporting Odds, UK sports betting operator, with the intend of contesting the € 11k fine levied against it by the Hungarian tax authority, for operating in that country without a license.

As the rationale behind the decision, the Court re-emphasized that strict concession regulatory prerequisites do not constitute enough reason for activating the public health and consumer protection mechanism in reducing the gambling offer, adding that the country’s restrictive measures were not primarily compiled with the abovementioned intent. Even if Member States are to the extent free to regulate gambling according to their respective national policy priorities, their action is limited by the overall EU framework.

It is without any doubt that the Court’s decision fully delegitimizes the Hungarian gambling regulation currently in force, the discriminatory nature of which is opposite to the very essence of EU Industry regulation. Furthermore, this decision is expected to give rise to similar questions from other EU states and to initiate the series of claims for indemnities, on behalf of damages accrued by the discriminative provisions and unreasonable sanctions.

In this particular case, it was ascertained that the member states, in this particular case Hungary, are prohibited from any sanctions, such as fines or IP blocking, so long as national legislation is in collision with the EU law. The judgement has been welcomed by all the Industry’s leading legal experts.

The European Organization for Gaming Law welcomes the Court’s decision, given it will contribute in improving costumer protection, freedom of establishment and in securing the level playing field for all the operators at the EU level, an accordance with the EU acquis values of free provisions of goods and services in the Internal Market.