CJEU Makes Important Ruling Concerning Freedom Of Services In The EU (Update)

Court rejects non-transparent licensing regimes and prohibits enforcement measures

The Court of Justice for the European Union (CJEU) ruled Thursday that regulatory authorities in European Union (EU) member states who persecute EU licensed operators by excluding them from national licensing processes are in breach of EU law and cannot apply enforcement actions such as fines or ISP blocking.

The ruling relates to Unibet’s legal challenge against the Hungarian regulator who in 2014 temporarily blocked access to the operator’s websites and later imposed a fine.

An elated European Gaming and Betting Association (EGBA) said in a press statement: “The Court confirmed the obligation on Member States to organise transparent licensing processes and rejected EU countries’ discretion to impose enforcement measures.”

The EGBA points out that this implies a critical consideration for the Dutch Gambling authority, Kansspelautoriteit, whose national legislation is  in effect unlawful.

In addition, the CJEU has found that Hungary has violated Art 56 of the EU Treaty (TFEU) by prohibiting a cross-border, EU-licensed operator to lawfully provide its services in Hungary, by failing to offer a public, transparent licensing tender process.

“Hence, when the national regime is in violation of EU law, a Member State is precluded from sanctioning an operator holding a licence in the EU,” the EGBA points out.

“Such jurisprudence is more relevant than ever with Member States such as Poland and the Netherlands introducing very restrictive and incompatible regulatory frameworks and imposing subsequent enforcement measures which clearly contradict the fundamental principles of EU law.”

The full CJEU ruling can be read here: https://curia.europa.eu/jcms/upload/docs/application/pdf/2017-06/cp170068en.pdf

“The Court’s ruling is a clear message to other Gaming Authorities, including the Dutch Gaming Authority, that they must not enforce regulation that does not comply with basic EU law,” Maarten Haijer, Secretary General of EGBA, said.

“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.”