Advocate General's Opinion Favours Dutch Monopoly

United Kingdom

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

In our last update, earlier this month we reported on the continued progress of two Dutch cases involving claims by Betfair and Ladbrokes against the Dutch Minister of Justice and De Lotto (the Dutch monopoly gambling operator) respectively. The Dutch national courts concerned referred several questions to the European Court of Justice ("ECJ") about the compatibility of the Dutch licensing system with EU law (specifically the freedom to provide services in other EU Member States) - see note below.

The Opinion of Advocate General Yves Bot which addresses the questions raised by the Dutch courts was published earlier today. As the references concerned broadly the same national provisions and the questions overlap, the Opinion deals with both cases together. Gambling operators licensed within the EU will, no doubt, be bitterly disappointed that Advocate General Bot has broadly concluded that Member States can restrict operators' rights to provide gambling services if a single operator has the exclusive right to provide such services to national citizens. This Opinion adopts the ECJ's approach in the Bwin/Liga case by emphasising the rights of Member States to maintain monopoly gambling systems.

In brief summary, the four key findings are as follows:

  • Member States can grant an exclusive licence to provide gambling services to a single operator if objectively justified (to prevent fraud and curb gambling addiction). Furthermore, monopoly operators can make their games more attractive to Dutch customers (by creating new games and by advertising these services) if the intention of doing so is also to prevent fraud and protect consumers who might otherwise use unlicensed websites;
  • Where a national court finds that restrictions imposed under national legislation (e.g. to prohibit all gambling except that provided by monopoly gambling operators) are proportionate to address the aims of the legislation, the court does not need to determine whether subordinate rules intended to ensure compliance with the restrictions are proportionate;
  • Adopting the ECJ's Bwin/Liga judgment, the principle of mutual recognition does not apply in the gambling sector: therefore operators licensed within one Member State are not automatically permitted to provide the same services in other Member States. A monopoly system may be compatible with EU law where objectively justified and proportionate; and
  • Member States should not extend an exclusive gambling licence without first conducting a competitive tender process unless such an omission is "validly justified". It is for national courts to decide whether a Member State can avoid putting a licence to tender because of an essential interest (such as public order) or a general interest (such as the protection of consumers and the prevention of fraud) and also whether this would be proportionate in the circumstances.

The ECJ's judgment is likely to be published within the next 6 to 12 months. It will also take into account the arguments submitted by the parties at the oral hearings which took place at the beginning of November. It remains to be seen whether the ECJ's judgment will follow the Advocate General's Opinion but generally it does so.