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European court slams Austrian casino monopoly

09 September 2010, 15:20 CET

(LUXEMBOURG) - European judges hammered Austria on Thursday with an emphatic ruling against its state monopoly for casinos.

"The award of concessions to Casinos Austria was not in accordance with European Union law," the European Court of Justice said.

The case was referred to the court after a German operator was fined, but the judges picked a series of holes in the Austrian legislation underpinning its monopoly.

First, it found that the "obligation on persons holding concessions to operate gaming establishments to have their seat in Austria constitutes a restriction on freedom of establishment."

Similarly, it ruled that Vienna's attempt to justify that restriction on the grounds it was needed to fight fraud and criminal engagement amounted to a "disproportionate" measure.

However, the killer blow was that Austria did not open the concession process to tender, and "the absence of a competitive procedure... does not comply with freedom of establishment and freedom to provide services."

The ruling came a day after German laws protecting state monopolies for gambling were judged unjustifiable, opening the door to a huge protected market for a host of online betting firms.

Europe's highest court has frequently handed down setbacks to online betting sites, ruling that member states are allowed to ban them from operating to help combat fraud and protect consumers.

However, several EU countries, including France, have started opening up their gaming sector under pressure from Brussels regulators.

Moves by the European Union commissioner for financial services, Michel Barnier, towards harmonising legislation are expected to be brought forward next year.

Full texts: Judgement of the European Court of Justice in Case C-64/08 Engelmann

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