The Court of Justice of the EU ruled in favor of EGBA in its appeal against the European Commission's refusal to open an investigation into state aid for lottery licensing in the Netherlands
The Court of Justice of the European Union (CJEU) ruled today that the European Commission must investigate any illegal financial benefits resulting from the way the Dutch state licensed historic lotteries in the Netherlands. The EGBA welcomes today's CJEU ruling in its favour.
In 2020, the Commission concluded that a formal EU investigation into the Dutch licensing procedure was unnecessary, stating that the procedure did not provide historic lotteries with illegal state aid, and therefore closed the original complaint filed by the European Gaming and Betting Association (EGBA) in 2016.
In March 2021, EGBA appealed to the CJEU against the Commission's decision, arguing that the renewal of multiple lottery licenses of incumbent holders, without market-price consideration and without an open, transparent and non-discriminatory licensing process , constitutes illegal state aid. The EGBA argued that the Commission's refusal to investigate the case violated its rights under EU law.
In today's ruling (case T 167/21), the CJEU agrees with EGBA, confirming the violation of its rights and annulling the Commission's decision, concluding that:
“….Given the total absence of an appropriate investigation by the Commission at the preliminary examination stage into the question of whether the contested measure conferred an indirect advantage on these bodies, while the remittance of part of the proceeds generated by the activities of the holders of licenses in favor of bodies serving the common interest designated by those licenses constituted one of the main characteristics of the legislation in question, the fact that this issue was not examined in the contested decision does not allow the exclusion of the existence of serious difficulties in regard. (paragraph 51)…..”.
Under EU law, if there are doubts about the possible existence of illegal state aid, the Commission is required to open an investigation. As a result, the Commission will now have to launch a formal state aid investigation to determine whether this is indeed illegal state aid.
The CJEU also ordered the Commission to pay the costs incurred by EGBA in its appeal to the CJEU.
“We welcome the CJEU's decision to annul the Commission's decision and find in favor of the EGBA, but frankly we are not surprised. The facts and data of this case raised serious doubts about the compliance of the Dutch licensing procedure with EU law, which should have justified the Commission opening a formal state aid investigation to resolve such doubts. We are confident that the Commission will conduct a thorough investigation and we stand ready to provide all necessary information and data. It is crucial that the Commission applies EU law consistently across all sectors, without fear or favour, including the gambling sector. The selective application of EU law undermines the institutional role of the Commission as guardian of the treaties,” he said Maarten Haijer, Secretary General of the EGBA.
