Hungary’s online gambling regulatory regime has been declared incompatible with EU principles and rules, the Court of Justice of the European Union ruled late last week. The ruling came as CJEU’s response to a case that dated back to 2014 and involved online gambling operator Unibet, recently rebranded to Kindred Group.
The EU’s highest court ruled that the authorization of online gambling services in Hungary ran afoul of the “principle for freedom to provide services” of different nature across the union.
Unibet and Hungarian gambling regulators have been locked in a legal battle for more than three years now. It all started when the Malta-based operator was spotted to have been targeting Hungarian players with websites in Hungarian language.
However, Unibet did not hold a license from the local gambling regulator at the time. In June 2014, Hungarian authorities ordered that Unibet’s Hungary-facing websites be blocked and blacklisted. The operator responded to the move by filing a lawsuit first in Hungary and then bringing the matter to EU court.
Unibet argued that Hungary’s iGaming regulations had been crafted in a manner that basically made it impossible for international operators to operate in the country, unless they had had physical presence there. Such operators had also been required to have operated in Hungary for at least three years. However, local regulators had actually never initiated a call for bids from remote gambling companies.
The country had based its decision to regulate its market in such a manner with its willingness to present players with a trustworthy gambling environment.
The CJEU ruled last week that numerous requirements in Hungary’s gambling regulations could be interpreted as ones that did not provide equal opportunities for local operators and operators licensed in other EU Member States to operate in the country. Thus, the Hungarian law violated principles under which the union has been functioning for decades now.
Europe’s highest court further noted in its ruling that while the trustworthiness argument was a plausible one, it still was not applied in a non-discriminatory manner.
The recent ruling came as another warning to EU Member States that the union would not tolerate any legislative processes that do not comply with its own rules.
The Dutch Gaming Authority, which recently introduced a new set of online gambling regulation, was specifically mentioned in court papers. The regulatory body practically banned international operators from targeting Dutch players with iGaming websites in Dutch. The new rules also encompassed Dutch iGaming affiliates’ activities as these were prohibited from referring players to unlicensed operators.
