CJEU rules that Hungarian gambling legislation is incompatible with EU law

The Court of Justice of the European Union has today publicised its decision in the Unibet case involving the Hungarian gambling licensing system and related legislation. Following the introduction of a system which was clearly designed to benefit local operators, in 2014 the Hungarian authorities began issuing temporary blocking orders against operators of games of chance licensed in other Member States. Unibet challenged the order issued against it.

The CJEU has confirmed that certain licensing requirements (including the need to demonstrate a local track record of 10 years involving the organisation of games of chance) put operators licensed in other Member States at an inappropriate disadvantage compared with local land based operators. Accordingly, the related legislation is considered discriminatory and contrary to the principle of the freedom to provide services and, as such, penalties may not be imposed by the Hungarian authorities in respect of the existing regime.

The CJEU did accept that a shorter “track record” requirement may be justifiable in certain limited circumstances. However, it also confirmed that the Hungarian licensing process and related technical standards had not met the relevant transparency requirements.

It will be interesting to see the reaction of the Hungarian authorities but, in the meantime, operators licensed in other Member States will feel emboldened as regards their continued supply into Hungary.

The decision can be found here