Austria's Curbs on Casinos Are Unlawful, European Union's Top Court Says

Austria’s state gambling monopoly breaches European Union law by blocking foreign casino companies, the EU’s highest court said.

“The categorical exclusion of operators whose seat is in another” EU nation “is disproportionate as it goes beyond what is necessary to combat crime,” the European Court of Justice in Luxembourg said today. Austria has the choice of “various less restrictive measures” to monitor casino operators, said the court.

The case is the latest in a series brought by betting companies including Bwin Interactive Entertainment AG, Ladbrokes Plc and Betfair Ltd., disputing whether it is legal for state monopolies to block them from operating freely across the 27- nation union. The court yesterday said Germany can’t block betting companies while allowing public monopolies to carry out “intensive” advertising campaigns to maximize lottery profits.

In today’s ruling, the court said the Austrian rules lacked any transparency and were discriminatory because of the absence of a competitive process allowing operators from other EU countries to apply for a casino license in the country.

“Such a difference in treatment is contrary to the principle of equal treatment” and “constitutes indirect discrimination on grounds of nationality prohibited by EU law,” said the EU court.

Legal Concerns

The court’s criticism focuses on legal concerns “which have all been rectified by changes done in 2008 and 2010,” said Dietmar Hoscher, head of the legal department of Casinos Austria AG, the state-backed casino operator.

Casinos Austria is owned by Raiffeisen-Holding Niederösterreich-Wien AG, Raiffeisen Zentralbank Oesterreich AG, the Austrian Central Bank and individual investors. The central bank may sell its 33 percent stake in the company to Raiffeisen, Wiener Zeitung reported in January.

Previous EU court rulings on cases in Italy and Portugal said national gambling monopolies are legal if they meet policy goals like reducing fraud and gambling addiction.

The case is C-64/08 Ernst Engelmann.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.