ECJ Opinion Hailed by Online Gambling Industry

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Over the last two years the online gambling industry in Europe has been moving towards increasing fragmentation. The recent meeting of MEPs indicated that legislators favored national regulation rather than a pan European regulation. All this has been bad news for the online gambling operators, who need a common European market with free movement of goods and services to deliver the most competitive online gambling products. However, a new opinion from the European Court of Justice (ECJ) Advocate General Cruz Villalon published on October 27, 2011, has given the online gambling industry a glimmer of hope.

Villalon issued this opinion in cases pertaining to the British gambling operator Stanleybet trying to access the Italian online gambling market. Stanleybet had claimed that the procedure to award Italian licenses favors online gambling operators that already had been licensed at a time when certain operators had been unlawfully excluded. The opinion stated that licensing systems and procedures in European Union (EU) nations must respect the requirements of the Treaty. This is a reference to the policy that makes it mandatory for supply of goods and services across borders on an equated basis.

The opinion reads, "National legislation that tends generally to protect holders of licenses issued at an earlier period on the basis of a procedure that unlawfully excluded some operators can be regarded as an unjustified restriction of the freedom to provide services. Maintaining the business position of such historical concession holders is contrary to the Treaty provisions." Villalon added that national legislation which prevents any type of cross border gambling activity is contrary to articles 49 and 56 of the TFEU. If at all legislation is enacted by a member country to restrict the freedom to provide online gambling services between EU member nations, then that legislation must be non-discriminatory, suitable and proportional. A date for the ruling of the European Court of Justice has not yet been set.

An immediate reaction to the ECJ Advocate General's opinion was received from Maarten Haijer, director of Regulatory Affairs at the European Gaming and Betting Association (EGBA). EGBA is a trade representative body of the leading European online gambling operators. He welcomed the opinion of the Advocate General which confirmed that the EU member states were required to formulate online gambling legislation that complied with the basic requirements of the Treaty. Haijer said, "It is the cornerstone of the Internal Market that a European licensed operator should have access to licenses in other Member States and be able to offer cross border services." He also pointed out that with the increasing pace of national regulation, online gambling operators could not practically invoke the ECJ for all issues. The legislators have to understand the need for regulation that harmonizes licensing standards within the EU.

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