The Court of Justice of the European Union (CJEU) has sided with the European Gaming and Betting Association (EGBA) in its appeal against the European Commission’s refusal to open a state aid investigation into the granting of lottery licenses in the Netherlands.
The CJEU has ruled that the European Commission must investigate possible unlawful financial advantages resulting from the way in which the Dutch State granted licenses to incumbent lotteries in the Netherlands.
In 2020, the Commission concluded that a formal EU investigation into the Dutch licensing procedure was not necessary, stating that the procedure did not provide incumbent lotteries with illegal state aid, and subsequently closed the original complaint filed by EGBA back in 2016.
EGBA, in its complaint, contended that the renewal of lottery licenses by incumbent holders lacked transparency, constituting illegal state aid. Currently, EGBA said the renewal process does not involve an open, transparent, and non-discriminatory allocation process, allowing operators to renew without considering the market rate.
EGBA appealed the Commission’s decision to the CJEU in March 2021, asserting that the renewal of multiple lottery licenses of incumbent holders without these considerations constituted illegal state aid. EGBA argued that the Commission’s refusal to investigate the case infringed upon its rights under EU law.
According to EU law, if there is any doubt about the possible existence of illegal state aid, the Commission is obligated to initiate an investigation. Consequently, the Commission will now have to commence a formal state aid investigation to determine whether illegal state aid was indeed involved. The CJEU also ordered the Commission to pay EGBA’s costs for its appeal at the CJEU.
“We welcome the CJEU’s ruling to annul the Commission decision, and find in EGBA’s favor, but frankly speaking we are not surprised by it. The facts and data of this case raised serious doubts about the compliance of the Dutch licensing procedure with EU law, which should have warranted the Commission to open a formal state aid investigation to address those doubts,” Maarten Haijer, Secretary General, EGBA, said.
“We are confident the Commission will now carry out a thorough investigation, and we are ready to provide any necessary information and data. It is crucial for the Commission to uphold EU law consistently across all sectors, without fear or favor, including the gambling sector. The selective enforcement of EU law undermines the Commission’s institutional role as the guardian of the Treaties.”
