Austria's betting monopoly ruled out by ECJ

One day after criticising German laws, the ECJ puts Austria on the mat.

Just 24 hours after finding that Germany's monopolistic gambling laws are non-compliant with EU law (see previous InfoPowa report); the European Court of Justice has made a similar ruling against Austria.

Gambling in Austria is controlled by the state, which has licensed a total of 12 private gambling establishments – all to Casinos Austria. Operating companies have to be domiciled in Austria, ostensibly because the government wishes to keep crime in check.

That rule "discriminates against companies which have their seat in another member state" and "is disproportionate, as it goes beyond what is necessary to combat crime," the European Court of Justice said in a statement.

The ECJ has ruled that:

* The obligation on persons holding concessions to operate gaming establishments to have their seat in Austria constitutes a restriction on freedom of establishment - a finding that national licensing jurisdictions with similar requirements - like France - may find of interest.

* There are in fact various less restrictive measures available to monitor the activities and accounts of such operators. In addition, any undertaking established in a Member State can be supervised and have sanctions imposed on it, regardless of the place of residence of its managers. Moreover, there is nothing to prevent supervision being carried out on the premises of the establishments.

* The absence of a competitive procedure when the concessions were granted to Casinos Austria AG does not comply with freedom of establishment and freedom to provide services.

* Tendering procedures “must be based on objective, non discriminatory criteria, known in advance, in such a way as to circumscribe the exercise of the authorities’ discretion so that it is not used arbitrarily.

The case has its roots in charges against a German citizen, Ernst Engelmann, who was fined Euros 2,000 euros for running two gambling halls in Austria. He challenged the ruling, and the appeals court asked the ECJ to rule on whether the Austrian system was legal.

The ECJ found that the Austrian rules broke EU law, as they represented a disproportionate limitation on the right of businesses based in other EU states to work in Austria.

The Austrian government's decision to allocate all 12 existing licenses to a single company, Casinos Austria, without putting them out to tender, also broke EU law, the ECJ ruled.

Commenting on the case, Sigrid Ligné, Secretary General of the European Gaming and Betting Association said: “Today’s ruling against the Austrian gambling laws confirms clearly that Member States cannot require EU licensed online operators to be physically present on their territory. In the Digital age there are obviously other and more efficient means available to monitor the activities of the operators.

”The European Commission has been given new legal arguments to pursue infringement procedures against several Member States that have similar provisions."

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