The European Gaming and Betting Association (EGBA) has won a legal battle in the Court of Justice of the European Union (CJEU) over the European Commission’s refusal to investigate how the Netherlands awards licences to incumbent lotteries.
The ruling comes after EGBA lost a case in 2020 when the European Commission said a formal investigation was unnecessary. At the time, the Commission said the procedure did not provide incumbent Dutch lotteries with illegal state aid.
This decision was in response to an original complaint filed by EGBA back in 2016. EGBA had urged the Commission to probe possible unlawful financial advantages resulting from how licences are issued to incumbent lotteries.
EGBA raised concerns over EU law breach
Despite the Commission rejecting this, EGBA chose to appeal the case to the CJEU.
In its appeal, EGBA said that the renewal of multiple lottery licences of incumbent holders, without consideration at market rate or an open, transparent and non-discriminatory licence allocation process, constituted illegal state aid. EGBA also said the Commission’s refusal to investigate the case infringed upon its rights under EU law.
Ruling on the appeal yesterday (15 November), the CJEU sided with EGBA. The court agreed there was an infringement of rights and annulled the Commission’s decision.
Announcing its decision, the CJEU noted a “complete absence” of appropriate investigation by the Commission at the preliminary examination stage. It said this investigation would have helped identify any parties that had an unfair advantage and if any other party would benefit from licences being awarded.
“The fact this issue was not examined in the contested decision does not make it possible to rule out the existence of serious difficulties in that connection,” the CJEU said.
Victory for EGBA: Dutch lottery licensing set for inspection
Reflecting on the decision, EGBA referred to EU laws in terms of illegal state aid. EU law says if there is doubt about possible illegal state aid, the Commission must investigate the matter.
The Commission must now launch a formal state aid investigation to see if illegal state aid was involved in the licensing process. The CJEU also ordered the Commission to pay EGBA’s costs for its appeal.
EGBA chief not surprised by ruling
EGBA secretary-general Maarten Haijer said that while he welcomed the ruling, he was not surprised by the outcome.
“The facts and data of this case raised serious doubts about the compliance of the Dutch licensing procedure with EU law,” Haijer said. “This should have warranted the Commission to open a formal state aid investigation to address those doubts.
“We are confident the Commission will now carry out a thorough investigation. We are ready to provide any necessary information and data. It is crucial for the Commission to uphold EU law consistently across all sectors, without fear or favour, including the gambling sector.
“The selective enforcement of EU law undermines the Commission’s institutional role as the guardian of the treaties.”