The European Court of Justice yesterday decided that Austria was not obliged to recognise a Maltese gaming licence.
The ruling was described by the European Lotteries Association as a “final blow” to those calling for “the mutual recognition of gambling licences between EU member states”.
The EU’s highest court said Austria was justified in opting for a monopoly in the sector if it fulfilled certain criteria, including those to protect consumers. The ruling therefore reinforces the right of EU member states to exclude foreign licensees, even if these were issued by other member states.
The case involves Jochen Dickinger and Franz Omer, both Austrians, founders of the multinational online games group bet-at-home.com. The group embraces a number of Maltese subsidiaries that offer games of chance and sporting bets on the internet via www.bet-at-home.com. These subsidiaries hold Maltese licences allowing them to engage in such activities. The website is accessible in several languages, including German.
Until at least December 2007, the Maltese subsidiaries used a server located in the Austrian city of Linz made available to them by Until at least December 2007, Entertainment GmbH, of which Mr Dickinger and Mr Omer were directors. The company also maintained the website and the software needed for the games and provided customer support.
However, criminal proceedings were brought against Mr Dickinger and Mr Omer as directors of Bet-at-home.com Entertainment GmbH alleging infringements of the Austrian law on games of chance, which only permits a monopoly.
The Bezirksgericht Linz (District Court, Linz) was uncertain whether the Austrian rules were compatible with EU law and, in particular, with the freedom of establishment and the freedom to provide services. It therefore referred a number of questions to the ECJ for a preliminary ruling.
Malta joined in the case backing the arguments of the two Austrians.
In its opinion, the ECJ said the fragmented system across the EU meant member states were entitled to do what they considered necessary to protect their citizens.
“When assessing the proportionality of a monopoly, the national courts are not required to take into account the monitoring and control systems regulating companies established in another member state,” the ECJ said. “A member state may legitimately wish to monitor an economic activity which is carried out on in its territory and that would be impossible if it had to rely on checks made by the authorities of another member state using regulatory systems outside its control.”
Sigrid Ligne, secretary general of the European Gaming and Betting Authority, said the ruling demonstrated the need for the EU to adopt legislation. “Clearly, the legal situation and fragmentation of the Internal Market for online gambling is unsustainable and requires urgent action from the European legislator to adopt an EU framework for the sector,” he said.
The EU is considering the idea of harmonising some rules in the sector and has already issued a Green Paper and started a consultation process.
Last week, the European Economic and Social Committee’s rapporteur, Maltese member Stefano Mallia, described the online-gambling situation as “a jungle” that needs some regulation, particularly with regard to consumer protection.
The European Parliament is expected to finalise its position in November.