(CN) – An 18-year exclusive license by the Greek government to a single company for 35,000 video lottery terminals and other games of chance does not amount to illegal state aid, the EU general court held Thursday.
Casino operators in Greece sued the European Commission in 2012, after the regulatory body found that the Greek government’s plan to give the publicly traded company OPAP an exclusive gaming license did not constitute illegal state aid.
The deal – which runs from 2012 through 2022 for 35,000 video gaming terminals and from 2020 to 2030 for 13 other games of chance – will net the Greek government over $1.1 billion, plus 5 percent of the gross gaming revenue on the latter deal.
According to the casino owners, the Greek government should have put the licenses up for public bid. They argued that Greece would have gotten more money if it had licensed several companies to run the video lottery terminals, rather than just OPAP.
They challenged the commission’s finding that the deal left OPAP with only the minimum return necessary to cover its operational and capital costs – and therefore did not amount to an unfair market advantage.
And the casino owners also argued that the commission should have opened its formal investigation procedure – typically used when the regulators don’t get sufficient answers during their preliminary inquiry. They also claimed that the commission failed in its duty to fully explain how and why it reached the conclusion that the OPAP licenses did not constitute illegal state aid.
On Thursday, the General Court of the European Union dismissed the casino owners’ challenge entirely – finding that the commission faced no difficulties from either OPAP or the Greek government during its preliminary investigation, and therefore had no obligation to open its formal investigation procedure.
As to whether the commission had fully explained how it arrived at its decision, the Luxembourg-based court said that the omission of some economic data in the public version of its decision did not prevent casino owners – or the court – from understanding the regulators’ finding.
“Furthermore, the applicants have not specified the relevance of the omitted data for the purposes of the present action,” the court wrote. “They have not explained the importance of that data either for understanding the reasoning followed by the commission or for developing their pleas relating to the obligation to initiate a formal investigation procedure and the joint assessment of the agreements. The applicants have also failed to specify what other pleas they would have sought to develop in support of the present action, if they had had access to the omitted data.
“In those circumstances, it must be concluded that the omission of economic data in the nonconfidential version of the contested decision did not prevent the applicants from understanding the reasoning followed by the commission nor hinder their ability to challenge that decision before the court, nor prevent the court from exercising its judicial review in the present action,” the court added.
The court acknowledged that the Greek government – which owned a portion of OPAP until the company was privatized in 2013 – initiated the agreements to make the company more attractive to potential buyers. But this made it imperative that the commission look at the agreements together as part of a single privatization transaction, rather than separately as casino operators had demanded, the court concluded.
Casino owners have two months to lodge an appeal with the European Court of Justice, the EU’s highest court.
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