AUSTRIAN GAMING LAW IN VIOLATION WITH EU LAW

European Court of Justice (9 September 2010): “Austrian legislation under which only companies having their seat in Austria have the right to operate casinos is contrary to European Union law” (click here for the press release).

The Court of Justice finds that the obligation on persons holding concessions to operate gaming establishments to have their seat in Austria constitutes a restriction on freedom of establishment. That obligation discriminates against companies which have their seat in another Member State and prevents those companies from operating gaming establishments in Austria through an agency, branch or subsidiary.

With regard to the possibility of justifying that restriction in the interest of preventing those activities from being carried out for criminal or fraudulent purposes, the Court holds that the categorical exclusion of operators whose seat is in another Member State is disproportionate, as it goes beyond what is necessary to combat crime.

With regard to the grant of the concessions, the Court considers that limiting the number of concessions may be justified by the need to limit opportunities for gambling. The grant of concessions for a duration of 15 years may also be justified having regard to the concessionaire’s need to have a sufficient length of time to recoup his investments.

However, the absence of a competitive procedure when the concessions were granted to Casinos Austria AG does not comply with freedom of establishment and freedom to provide services. The Court recalls in that regard that the obligation of transparency requires the concession-granting authority to ensure a degree of publicity sufficient to enable a service concession to be opened up to competition and the impartiality of the award procedures to be reviewed. That obligation is a condition which must be met before a Member State can exercise its right to award licences to operate casinos, irrespective of the method of selecting operators.

Karel Frielink

(9 September 2010)

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