The European Gaming and Betting Association (EGBA) has won a legal battle at the Court of Justice of the European Union (ECJ) over the European Commission’s refusal to investigate how the Netherlands grants licenses to established lotteries.

The ruling came after the EGBA lost a case in 2020 when the European Commission said a formal investigation was unnecessary. At the time, the Commission said the process did not provide illegal state aid to established Dutch lotteries.

This decision was in response to an original complaint from the EGBA in 2016. The EGBA had asked the Commission to investigate possible unlawful financial advantages arising from the way licenses are awarded to established lotteries.

EGBA raised concerns about a breach of EU law

Although the Commission refused, the EGBA decided to appeal the case to the ECJ.

In its appeal, the EGBA stated that the renewal of multiple lottery licenses from incumbent holders without market consideration or an open, transparent and non-discriminatory licensing process constituted unlawful state aid. The EGBA also said the Commission’s refusal to investigate the case violated its rights under EU law.

The ECJ decided on the appeal yesterday (November 15) and sided with the EGBA. The court recognized a violation of the law and overturned the commission’s decision.

Announcement of his decision, the ECJ found that the Commission had “completely failed to carry out an adequate investigation” during the preliminary examination phase. It said this investigation would have helped identify any parties who had an unfair advantage and whether any other party would benefit from the award of licenses.

“The fact that this question was not examined in the contested decision does not make it possible to exclude the existence of serious difficulties in this context,” the ECJ said.

Victory for EGBA: Dutch lottery licensing up for inspection

With regard to the decision, the EGBA referred to EU laws regarding illegal state aid. Under EU law, if there are doubts about possible illegal state aid, the Commission must investigate the matter.

The Commission must now launch a formal state aid investigation to determine whether illegal state aid was involved in the licensing process. The ECJ also ordered the Commission to pay the EGBA’s costs for its appeal.

EGBA boss not surprised by verdict

EGBA Secretary General Maarten Haijer said that while he welcomed the ruling, he was not surprised by the outcome.

“The facts and data of this case raised serious doubts about the compliance of the Dutch approval process with EU law,” said Haijer. “This should have prompted the Commission to open a formal state aid investigation to resolve these doubts.

“We are confident that the commission will now carry out a thorough investigation. We are ready to provide all necessary information and data. It is crucial for the Commission to consistently comply with EU law in all sectors, without fear or favoritism, including in the gambling sector.

“Selective enforcement of EU law undermines the Commission’s institutional role as guardian of the Treaties.”