The landscape of the European online poker and casino gaming world continues to get murkier as two recent opinions from the European Court of Justice (ECJ) question the legalities of the Austrian and Swedish gaming laws.
In the first opinion, Advocate General Jan Mazak ruled on a case involving Ernst Engelmann, a German citizen who operates two online casinos in Austria. Engelmann was found guilty of unlawfully organizing games of chance in Austria and the case was appealed to the regional court of Linz. This regional court sought the opinion of the ECJ on three points of Austrian gaming laws and whether they violated the European Union (EU) treaty that allows for freedom of trade across national boundaries.
Mazak, after reviewing the case history, ruled on the three points that the regional court had requested clarification on. Mazak stated that the requirement that companies needing to be physically located in Austria is a restriction on freedom of establishment and is a violation of the EU treaty. Mazak ruled that this direct discrimination prohibits companies with their seat in another Member State from being holders of a license to operate a casino.
Part of the reason for that segment of the Austrian law – that Austria was looking to protect its citizens through having gaming operations located in the country and bound by its laws – was unfounded in Mazak’s opinion. Mazak ruled that companies that are a part of the EU are bound by the laws of the EU treaty. The decision stated, “In fact, any undertaking established in a Member State can be supervised and penalties imposed on it, regardless of the place of residence of its managers.” Thus, Mazak ruled against the location of operations argument used by the Austrian government.
In the other opinion, Advocate General Yves Bot was asked by the Stockholm Court of Appeals to rule on the case of two editors of national newspapers. Otto Sjöberg and Anders Gerdin were the editors-in-chief and publishers of two Swedish newspapers who accepted advertising from gaming companies located outside of Sweden. In late 2003 and 2004, they published advertisements for lotteries offered on such gaming sites as Expekt, Unibet, Ladbrokes, and Centrebet, all of which are established in Malta and the United Kingdom. They were convicted of violating Swedish gaming laws through promotion of companies not located in Sweden and were fined SEK 1,000 (approximately $137).
While Bot opinion stated that the punishment for the violation was appropriate as to the Swedish law, he did question the decision in the Swedish courts. At issue is a question of discrimination, according to Bot. In his opinion, Bot stated, “In the present case, although Swedish legislation prohibits, without distinction, the promotion of gambling organized abroad and the promotion of gambling organized in Sweden without a license, the penalties laid down for infringement of that prohibition are different. Thus, whereas penalties of a fine and imprisonment for up to six months are laid down for persons who advertise gaming organized abroad, those who advertise gaming organized in Sweden without a license do not incur equivalent criminal penalties, but only administrative penalties.”
The opinions laid out by Mazak and Bot are not binding, however. They are simply opinions and must go in front of the full ECJ before a decision is rendered on either case. At this time, there has been no date set for a final decision on the two cases.
The European Betting and Gaming Association (EGBA), which has been battling the movement towards the nationalization of online gaming in Europe, has hailed the opinions of the two Advocates General as potentially groundbreaking in the online gaming industry. Sigrid Ligné, the Secretary General of the EGBA, was especially pleased with the Austrian ruling when she said, “(With AG Mazak’s opinion) In this context, there is no acceptable justification to prevent reputable European competitors from offering online poker and casino games to Austrian players.”
Ligné appealed to free market economic theory when she said about the Swedish opinion, “It is remarkable that leading national newspapers, which are financed through and very much dependent on the sale of advertising, are unfairly deprived of substantial sources of revenue.” Ligné also noted that the two Swedish companies that conduct the country’s online gaming operations, Svenska Spel and ATG, advertise heavily inside Swedish borders and also use other EU member states in advertising on television to draw customers.
