ECJ: Restrictive Austrian casino rules a breach of EU law

If cheers could heard yesterday in the board rooms of companies like Ladbrokes and Bwin (and indeed all major EU net gambling operators), then today those cheers would be drowned out by the sounds of popping champagne corks.

On Wednesday the European Court of Justice (“ECJ”) slammed Germany’s prohibitive approach to online gambling ruling that banning foreign operators was not justified while local monopoly gambling operators were able to intensively advertise their product.

The very next day they turned their blowtorch onto Austria which has similar protectionist rules in place and in a similar ruling, declared their current approach a violation of EU law.

To say it’s been a very bad week for regulators resisting a single market approach to online gambling across Europe is an understatement.

What the court said

At issue in this case was the right of plaintiffs Ladbrokes, Bwin and Betfair to participate in Austria market.  Current rules allow only the one operator – Casinos Austria AG (owned by the Austrian Central Bank, RHNW AG, Raiffeisen Zentralbank AG and individual investors) to obtain a license and market to Austrians.

Austrian authorities ran the usual public interest argument to support their exclusionary policy.  That is, entry of foreign operators will lead to more fraud and gambling addiction.  The ECJ disagreed saying:

“The categorical exclusion of operators whose seat is in another EU nation is disproportionate as it goes beyond what is necessary to combat crime…Such a difference in treatment is contrary to the principle of equal treatment and constitutes indirect discrimination on grounds of nationality prohibited by EU law.”

What now?

Like Germany, it’s likely Austria will be forced to move reluctantly down the path of inviting license applications from operators outside Austria.  Of course this will take some time and no doubt there will be that pantomime of submitting and re-submitting proposed laws to the European Commission a number of times before they are deemed suitable.

And in the meantime, the economic reality that thousands of Austrians are playing at foreign online casinos anyway will continue unchanged.

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Related pages: Live casinos for Austrian players