European Commission closes infringement procedures and complaints in the gambling sector

The remote gambling industry has had its fair share of attention from the European institutions, including an array of European Court of Justice “(“ECJ“) cases that saw an innovative, entrepreneurial and somewhat aggressive industry pit its wits against entrenched fiscal protectionism. The European Commission acknowledged that it had a role in ensuring Member States complied with their Treaty for the Functioning of the European Union (“TFEU “) obligations as then (and only then) would there be real progress in national licensing regimes, a stated aim of the European Commission, particularly after the 2009 Santa Casa judgment in the ECJ killed off any hope that “mutual-recognition” of licences would endure.

It was with something of a (relative) fanfare that Michel Barnier, then Member of the European Commission responsible for Internal Market and Services, said in a speech in June 2012:

“The European Parliament has rightly called on the Commission to continue to investigate situations of non-compliance with the Treaty or the case law of the Court of Justice, which has provided valuable guidelines. I will therefore ask my department to contact all the Member States concerned by ongoing cases or complaints in order to remind them of the applicable rules and suggest that any problematic situations are rectified in line with current case law. If blatant infringements persist, I will not hesitate to propose to my colleagues that the appropriate proceedings be taken or relaunched.  The development of a more proactive policy to support the Member States must be matched by a firm determination on the part of the Commission to enforce common rules once they have been clearly established.”

Since Mr Barnier spoke, the TFEU remains in place and ECJ case law since then has generally further strengthened the arguments of operators that a number of Member States are still “non-compliant with the Treaty”.  Yet, today, the European Commission has announced its expected “closure of all infringement procedures and complaints in the gambling sector”. It is doing so, “in line with its political commitment to be more strategic in enforcing EU law”. For lawyers who have been advising on the impact of ECJ cases since Gambelli, it is something of a disappointment that a political decision taken in 2017 replaces what was a clearly legally-driven position adopted in 2012.

Furthermore, today’s press release indicates the basis of the decision to be clearly political. It points out that “The Court of Justice of the European Union has repeatedly recognised Member States’ rights to restrict gambling services where necessary to protect public interest objectives such as the protection of minors, the fight against gambling addiction and the combat of irregularities and fraud”, yet completely ignores all the ECJ decisions that went against Member States in the last dozen or so years and which provided the industry the solid, legal justification for continuing to use a licence issued in one Member State to supply to players in certain others.

Where does this leave us? The European Commission cannot, through making a clearly politically motivated decision to prioritise its resources elsewhere, overturn ECJ jurisprudence. The impact will be more litigation and a need to rely on the national courts and the ECJ to uphold the essential TFEU freedoms, if the European Commission won’t. One might expect certain Member States (who no longer have infringement proceedings against their names) to feel somewhat emboldened and enforcement risk may, in theory at least, increase. Assuming the courts continue to observe the rule of law, one hopes such risk won’t necessarily manifest itself in anything tangible.

The European Commission’s press release can be read here.