(CN) – Hungary’s rules for licensing casinos and online gaming operations quash foreign competition and therefore violate EU law, the European Court of Justice ruled Wednesday.
While Hungary’s two-tiered treatment of gambling operations – sports and horse betting are government operations while online games of chance can be run privately with the proper license – does not by itself run afoul of EU law, the Luxembourg-based high court found the latter unfairly favors Hungarian operators.
“The provisions at issue restrict the organization of online games of chance to operators managing a casino on national territory and which have a concession and a license for that purpose. In that connection, the court has consistently held that a system of concessions and licenses for the organization of games of chance must be based on objective, nondiscriminatory criteria which are known in advance, in such a way as to circumscribe the exercise of the national authorities’ discretion so that it is not used arbitrarily,” the EU court wrote in a 9-page opinion.
“There are less restrictive measures.”
The high court’s preliminary ruling stems from a lawsuit filed by a British gambling operator after being fined nearly $14,000 by the Hungarian government for operating online games of chance without the proper license. The company says that because the licensing rules violate EU law by not allowing foreign competitors into the market, the fine should be dropped.
It’s up to the Hungarian court hearing the case to decide that, within the parameters of the EU court’s binding ruling.