CJEU rules Hungary’s online gaming uncompatible with EU law

The Court of Justice for the European Union (CJEU) has ruled that Hungary’s online gambling licensing regime unlawfully excluded EU-licensed operators from the country’s licensing process.

Kindred Group’s Unibet brand had brought the case to court, arguing that the country’s new rules were discriminatory because international operators were unable to meet Hungary’s conditions for online licensing.

Maarten Haijer, secretary general of the European Gaming & Betting Association (EGBA), said: “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 channelled 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."

When Unibet initially complained, Hungarian tax authorities retaliated by ordering service providers to block Unibet domains and impose fines on the operator’s Hungary-facing products.

Unibet in turn filed a case in a Hungarian court, which asked the CJEU to decide whether Hungary’s laws went against Article 56 of the Treaty and Functioning of the European Union (TFEU), which stops member states from disrupting the provision of cross-border trade and services.

The CJEU has now ruled that Hungary’s online gambling rules prohibited the country from taking enforcement action against online gambling operators licensed by other EU countries.

In its 2014 legislation, Hungary allowed land-based casino operators to apply for online casino and poker licenses, while online sports betting was restricted to the state-run Szerencsejáték Zrt betting monopoly. International operators complained that the rules were biased in favour of domestic operators and that they were not clearly written.

Related articles: Dutch Gaming Authority introduces stricter rules for igaming Wiggin EU regulation roundup - June 2017 (paywall) Greentube goes live with Las Vegas Casino Hungary Kindred completes 32Red deal