Hungary’s restrictive online gambling laws slammed by CJEU

Hungary’s prohibitive online gambling rules exclude the country from taking enforcement action against online gambling operators licensed by other European Union countries, according to The Court of Justice of the EU.

In a ruling handed down on yesterday, the CJEU ruled that Hungary’s new online gambling regime had unjustly excluded EU-licensed operators from the country’s licensing process. The case had been brought by the Kindred Group’s Malta-licensed Unibet brand.

Background

The Budapest-Capital Administrative and Labour Court asked the CJEU whether Hungary violated the freedom to provide services for imposing administrative fines and temporary ISP blocking measures against an EU licensed and regulated operator, whilst it failed to publish a call for tenders and did not enable the operator to submit an application for the purposes of obtaining a Hungarian license. In 2014, the European Commission sent an EU Pilot letter to Hungary in reaction to the changes in the Hungarian gambling framework, in which it emphasized the negative impact on the freedom to provide services.

Finally, the CJEU ruled against Hungary imposing fines against Unibet, saying “where a restrictive system has been established for games of chance and that system is incompatible with Article 56 TFEU, an infringement of the system by an economic operator cannot give rise to penalties.”

Maarten Haijer, Secretary General of EGBA: “The Court reiterated that Member States must guarantee that national regulation on online gambling services meets objective, transparent, non-discriminatory and proportionate criteria. Only a properly regulated and transparent online gambling market can ensure that the consumer is channeled to the regulated offer.”

“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. 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.“ added Haijer.