European Commission abandons infringement claims against national governments

European Union gambling companies appealing against unreasonable bans and restrictions by EU member states on grounds of “free movement of goods and services” will in future have to look to individual national courts rather than the European Commission or the European Court of Justice for redress following a decision by the Commission this week that it will no longer handle infringement cases in the online gambling sector.

It’s a useful strategy to avoid the EC coming into conflict with member states, recalling the tardy and apparent reluctance with which the Commission wielded its enforcement powers, and EU observers have noted that the Commission has been focusing more on its political priorities and pursuing them vigorously.

In an announcement Thursday the Commission advised that it is closing all infringement cases in online gambling against member states.

The Commission noted that the Court of Justice of the European Union has repeatedly recognised Member States’ rights to restrict gambling services where necessary to protect the public interest, and observed that Member States are modernising their online gambling legal frameworks, channelling citizens’ demand for gambling from unregulated to authorised and supervised websites, and ensuring that operators pay taxes.

The Commission says that against that backdrop it is not a Commission priority to use its infringement powers to promote an EU Single Market in the area of online gambling services, although it will support Member States in their efforts to modernise their national online gambling legal frameworks and facilitate cooperation between national gambling regulators.

The Commission is also continuing to assist member states in fighting illegal gambling as a means of protecting EU citizens and guarding against “related illegal activities.”

The Commission further considers that complaints in the gambling sector can be handled more efficiently by individual national courts, supported by the numerous judgements of the Court of Justice of the EU on national gambling legislation.

Complainants are therefore encouraged to make use of national remedies when facing problems with EU law in the gambling sector.

This policy change recognises the right of member states to autonomy in the regulation of gambling services, including tax rates provided the basic freedoms of the European Treaty are respected.

Online gambling trade bodies Remote Gambling Association and European Gaming & Betting Association were among early critics of the new EC policy, characterising it as displaying a puzzling lack of understanding of the digital consumer, and downright questionable.

The RGA observed that the decision was not based on any legal assessment of the merits of the cases being abandoned, whilst EGBA suggested that the Commission is not taking its role of guardian of EU treaties and law seriously.

Clive Hawkswood, CEO of the RGA, said: “The existence of infringement proceedings and the Commission’s subsequent pressure on Member States to comply with EU law has helped with the introduction of many effective and sensible regulatory regimes for online gambling across Europe.”

Other observers have note that the policy could result in more national protectionism by jurisdictions, and fewer avenues for redress in EU terms.