In a blow to online gambling companies seeking a more liberal market, Europe’s highest court ruled in favor of a national monopoly. On Thursday, the European Union Court of Justice ruled that the Austrian government can ban foreign gambling companies from operating in their country.
The case involved two Austrian citizens who set up a multinational betting group called bet-at-home.com. The members of the group included citizens of various foreign countries, including Malta. Subsidiaries of the group hold Maltese licenses. The company was run out of Austria though they were not licensed to do so. The group said they were covered because they were licensed in Malta. According to them, the Maltese online gambling rules were sufficient protection and should have been good enough for Austria. The Austrian government disagreed and accused them of breaking the law. The Austrian court hearing the case then turned to the European Court of Justice for advice on the case.
The EU court ruled that because online gambling regulation is so fragmented in the European Union, with different regulations in different states, the member states are allowed to do what they consider necessary to protect their citizens.
In the ruling, the European court said that “when assessing the proportionality of a monopoly, the national courts are not required to take into account the monitoring and control systems regulating companies established in another member state.”
Because of the ruling, the Austrian citizens running the company could face criminal charges. A bigger impact, however, will be felt by the online gambling community as a whole. Each time the EU backs a state monopoly over foreign competition, it makes it that much harder for gambling websites to grow and gain more business.