European Court of Justice Impact on Gambling Industry

Due to the fact that the European Union is an economic and political association, the legal framework operating in the territory of its member states must comply with EU law. The CJEU series of court decisions provides guidance on the interpretation of fundamental rights, freedoms and obligations in relation to the domestic online gambling market. Thus, national courts have the opportunity to measure the degree of severity of restrictive measures in the gambling industry. In other words, CJEU defines a vector that determines whether certain requirements for gambling operators are justified, and also forms an understanding of common goals in the development of gambling.

The CJEU defined the implementation of cross-border gambling services as an economic activity that is part of the scope of fundamental freedoms contemplated by the Treaty on the Functioning of the European Union (TFEU). It is worth noting that Article 56 of the TFEU provides for a ban on restricting the freedom to provide services to users in EU countries. In this context, an important aspect is the lack of obligations related to the mutual recognition of the licensing of gambling operators. Accordingly, the license is valid for work in the country in which it was issued – the authorities are not required to reckon with the permission granted by the gambling regulator of another country.

CJEU in its activities in relation to the gambling market proceeds from the need to restrict the industry from providing certain services in order to protect public interests, the rights of minors, gambling addicts, as well as to combat money laundering.

In addition, EU member states must demonstrate that their chosen course regarding the development of the gaming industry is consistent and effective in preserving public interests. gclub

The decision was made by the sixth chamber of the CJEU on February 28, 2018. The main subject of table intervention is the need for interpretation of Article 4 of the European Union Treaty, Articles 56 of the TFEU, as well as Articles 41, 47 and 48 of the Charter of Fundamental Rights of the European Union.

The request was sent as part of a proceeding between Sporting Odds Ltd and the Central Office of the National Tax and Customs Administration of Hungary. The subject of the dispute was a fine on the company in the amount of 3.5 million Hungarian forints. The penalty was imposed due to the provision of online gambling services without special permission from the jurisdiction.

Hungarian law establishes the need for special permission to provide online gambling services. At the same time, Sporting Odds Ltd is a British company that operates on the basis of a license issued by the UK gambling regulator.

The trial court did not make an unambiguous decision either as to whether the company had the opportunity to participate in the tender established by law, or whether its actions could be called systematic. Due to the insolvency of the local court, the case was redirected to CJEU. He decided that the restriction on the work of gambling operators in Hungary, in particular the monopolistic nature of some segments of the gambling business, is not an effective solution to achieve the goals stated in the general description of the work of the court.

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