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Maltese gaming industry dealt blow by ECJ ruling
EU court says fragmented regulatory system across EU allows member states to do what they considered necessary to protect their citizens.
The European Court of Justice has delivered a blow to online betting companies seeking to break national monopolies, Reuters reports, ruling that Austria can bar foreign gaming firms from operating in the country.
The Luxembourg-based EU Court of Justice ruling came in a case involving two Austrians who set up a multinational group — bet-at-home.com — whose members included several Maltese subsidiaries holding Maltese licences. The two, backed by the Maltese government, said Maltese online gaming rules were adequate to protect consumers.
Several online gambling companies launched legal challenges against a number of EU countries in an effort to break open a lucrative market with revenue of €80 billion last year.
But Austrian authorities disagreed and accused the two firms of breaking the country’s gaming laws. The Austrian court hearing the matter sought advice from the Court of Justice on the issue.
The EU court said the fragmented regulatory system across the 27-country EU meant member states were entitled to do what they considered necessary to protect their citizens.
"When assessing the proportionality of a monopoly, the national courts are not required to take into account the monitoring and control systems regulating companies established in another member state," it ruled. "A member state may legitimately wish to monitor an economic activity which is carried on in its territory, and that would be impossible if it had to rely on checks made by the authorities of another member state using regulatory systems outside its control."
European Lotteries, an umbrella group for 78 licensed national lotteries in 43 countries across Europe, welcomed the decision. "Those that keep on calling for ‘mutual recognition’ of gambling licences between member states have now been dealt the final blow," Friedrich Stickler, president of the group, said.
The European Gaming and Betting Association lobby group, whose members include Britain’s Bwin.party and Malta-based Unibet and Digibet, said it was time for EU-wide measures. "Clearly the legal situation and fragmentation of the Internal Market for online gambling is unsustainable and requires urgent action… to adopt an EU framework," its secretary-general, Sigrid Ligne, said.
The European Commission is to decide next year whether to propose any reform.
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@mrcrycrash. Agreed not all are in Malta because of the relatively cheaper conditions but the majority are, I know what I am talking about. The ones that will probably remain are the bet exchanges which are peer to peer betting companies like Betfair, just to give you one example. It is indeed a shame that this ruling has come about, but this is another example of our European cousins solidarity with us, they are all angry that we have managed to find a niche market and exploit the complex EU rules in our favour.
Joseph Pace •
CEnsu -
Not necessarily. Depends on what they Malta for. The world is not only the EU, and at the same time, there are operators who whilst still maintaining offices in Malta, have licences to operate in other countries.
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It seems that the Hon. Tonio Fenech is not having a very good week, first the Moody`s report and now this ruling. What this effectively means is that the majority of online gaming companies based in Malta have no reason to stay here as now all EU states will use the Austrian model to protect their consumers and make it mandatory for any company that wants to target their market to pay a licence issued in their own country, i.e. the one it intends to sell it`s products into. This is indeed a big blow as currently these companies employ around 6000 people here even though about 60% of them are foreigners, the knock on effect on the economy would be devastating.
