- The CJEU found Hungarian gambling laws to be biased and contrary to the TFEU
- The Court sent a clear message that local laws contrary to EU provisions will not be tolerated
The Court of Justice for the European Union (CJEU) has been very active over the past couple of weeks when it comes to online gambling laws in the EU member countries. Its most recent one came on Thursday, and in it, the CJEU made it clear that online casino laws currently in force in Hungary are contrary to the Treaty and Functioning of the European Union and discriminatory to foreign operators.
Unclear and biased laws
In 2014, Hungary made significant changes to its online gambling laws, issuing a public call for domestic brick and mortar venues to submit applications for online licenses. The licensing process was open to online casino and poker operators, while the state retained a monopoly over sports betting.
At the time, Hungary didn’t issue a public call for foreign operators interested in obtaining the license, and the law also stipulated that any foreign companies looking to be licensed in the country would need to be deemed ‘trustworthy,’ which meant they were present in the Hungarian market for at least ten years.
Unibet stand their ground
These stipulations were clearly unfavorable to any foreign operators, and gambling giant Unibet decided it was necessary to take the entire matter to court. It first tried to argue with the local government, pointing out how the laws were biased and unfair, but that proved unproductive, as its domains were banned by the ISPs in the country.
The case was first brought to the Hungarian court, but they transferred it to the CJEU, which has the authority in these matters. The court revised the case and decided that Unibet claims had solid foundations and that Hungarian laws were, indeed, contrary to Article 56 of the TFEU.
The CJEU supported all Unibet’s claims, extrapolating that the ten-year stipulation was heavily biased against foreign operators interested in obtaining a license.
Although the country later amended the provision to require applicants to have been operating in an EU member country for at least three years, the Court decided that these changes were not properly defined or announced to give foreign companies a fair opportunity.
Also, it was ruled against the fines that Hungary imposed on Unibet after banning their domains. The reasoning behind the decision was that the country cannot impose penalties based on a law that’s contrary to Article 56 of the TFEU.
With this decision, the CJEU sent a clear message that local laws that don’t comply with the EU provisions will not be tolerated. This means that Hungary, as well as some other countries like Netherlands, will need to look into their online gambling laws and make necessary amendments if they don’t want to face repercussions.
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