Kindred Group wins CJEU appeal against ‘discriminatory’ Hungarian licensing regime

The European Court of Justice (CJEU) the European Union’s principal law court has ruled against the Hungarian government’s online gambling licensing framework, stating that the regime had placed unfair business conditions for European operators seeking to enter the market.

A formal appeal had been brought to the CJEU by European sports betting operator Kindred Group, who detailed that Hungary’s Gambling Supervisory Unit had purposely created online gambling provisions and standards which could not be met by non-national stakeholders.

Updating its gambling framework in 2014, Hungary proposed that only enterprises with a ‘bricks-and-mortar’ presence could apply for online casino and poker licenses. Furthermore, all sports betting wagering would be controlled by state-run operator Szerencsejáték Zrt.

Unibet’s Counsel would argue that Hungarian provisions, had purposely discriminatory against foreign operators.  The bookmaker highlighted a number of laws that could not be fulfilled by international firms seeking to gain gambling licenses.

In its appeal, the bookmaker would further point out that Hungary’s actions breached the EU’s Article 56 ‘Treaty and Functioning of the European Union (TFEU)’, which stops all member states from disrupting the provision of cross-border trade and services.

The CJEU has ruled in favour of Kindred’s motion, stating that Hungary’s national regime had implemented an ‘incompatible regulatory framework and imposed subsequent enforcement measures which clearly contradict the fundamental principles of EU law,’

Maarten Haijer, the Secretary General of the European Gaming & Betting Association (EGBA), commented on the CJEU determination: “The Court reiterated that member states must guarantee that national regulation on online gambling services meets objective, transparent, non-discriminatory and proportionate criteria. Only a properly regulated and transparent online gambling market can ensure that the consumer is channelled to the regulated offer.”

“The Court’s ruling is a clear message to other gaming authorities, including the Dutch Gaming Authority, that they must not enforce regulation that does not comply with basic EU law. We expect these member states to reconsider and lift these enforcement measures as they are acting in violation of EU law. Their actions do not serve the interest of consumers, they fail to channel the consumers to reliable providers, instead they merely prop up failed regulation.”