17.11.2023

by Mateusz Mazur

EU Court Annuls Commission Decision on Dutch Gambling Licence Extensions

In a significant ruling, the General Court of the European Union, specifically its Ninth Chamber, has annulled a decision of the European Commission concerning the extension of gambling licenses in the Netherlands.

The case, identified as T-167/21, was brought forth by the European Gaming and Betting Association (EGBA), which challenged the Commission’s 2020 decision approving the Netherlands’ extension of existing gambling licenses without initiating a formal investigation.

Background of the Dispute

The dispute centers on the Netherlands’ exclusive authorization system for gambling, under which the operation or promotion of gambling activities is prohibited without a government-issued license.

The EGBA, representing various European online gaming and betting operators, alleged that the Dutch authorities, through their 2014 policy and subsequent implementation, unlawfully extended gambling licenses, providing state aid to certain operators without adequate market-rate remuneration or a transparent award process.

The Court’s Ruling

The General Court, led by President L. Truchot and Judges H. Kanninen and T. Perišin, scrutinized the Commission’s decision not to raise objections to the Dutch measure.

The Court found serious difficulties in the Commission’s preliminary examination, suggesting the procedure was insufficient to eliminate doubts about the compatibility of the Dutch measure with the internal market.

Key to the Court’s decision was the failure to investigate whether the extended licenses conferred indirect advantages on certain parties, particularly given the legal requirement for license holders to allocate a portion of their proceeds to public interest bodies.

Implications of the Judgment

This judgment raises questions about the Commission’s approach to state aid investigations, especially in complex regulatory environments like gambling. It underscores the need for thorough preliminary examinations and the potential consequences of overlooking indirect advantages in state aid cases.

The annulment of the Commission’s decision sends a clear message on the necessity of procedural diligence and the rights of interested parties in state aid investigations. It also signals a potential shift in the regulatory landscape for gambling licenses across the EU, highlighting the importance of transparency and market considerations in licensing processes.

Next Steps

Following this ruling, it is anticipated that the European Commission will need to re-evaluate the Dutch gambling license extensions, possibly leading to a formal investigation procedure.

This could have broader implications for the gambling industry in the Netherlands and the EU’s approach to state aid and competition law.

Our Comment on the Article

The General Court’s decision in the case of the European Gaming and Betting Association vs. the European Commission marks a pivotal moment in EU state aid law, particularly in the gambling sector.

It emphasizes the importance of thorough procedural compliance and the need for transparency in state aid matters.

 

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