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29th Mar 2024

Austrian gambling rules breach EU law, top court rules

  • Austria can limit the number of gambling halls, but cannot limit licencing to domestic companies (Photo: John Wardel)

Austria's restrictions on gambling hall ownership have been ruled illegal by Europe's top court.

On Thursday (9 September), the European Court of Justice found that the country's rules that ban firms that are not headquartered in Austria from operating such establishments was in breach of European Union law.

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Currently, the government controls the gambling sector although there is no public monopoly. Vienna has provided licences to 12 private gambling halls.

The ECJ however ruled that the the restriction "discriminates against companies which have their seat in another member state" and "is disproportionate, as it goes beyond what is necessary to combat crime," according to a statement from the Luxembourg-based institution.

The judgement followed an appeal by Ernst Engelmann, a German who had been slapped with a €2,000 fine for setting up a pair of casinos.

The court also found that the government's move to supply all the licences to a single company, Casinos Austria, was also a breach of EU law. Additionally, it said that the duration of the licences, 15 years, was "liable to impede or even prohibit the exercise of [EU] freedoms," even though it could be justified as being in the public interest.

The court also said that the limitation to 12 of the number of concessions, representing one gaming hall per 750,000 citizens limited opportunities for gambling as it imposed barriers to addiction in the form of distance to travel, and that this too was in the public interest.

The ruling came just a day after a surprise decision by the court to strike down Germany's public lottery monopoly.

The court said on Wednesday that Germany had undermined its consumer-protection argument by letting state-run gambling companies engage in "intensive advertising campaigns" and by permitting a proliferation of automated gambling machines, which the court said were highly addictive.

The decision came as a surprise as the court in similar cases involving Portugal and Italy had backed public monopolies on the grounds that they permitted the combatting of gambling addiction.

By maintaining a series of aggressive advertising campaigns, it appeared that Berlin had been less interested in the addictions of its citizens and more interested in protecting a lucrative source of revenue.

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