ECJ Upholds Ruling Requiring EU Investigation into Netherlands Lottery Monopoly

The European Court of Justice (ECJ) has dismissed the Netherlands’ appeal in the long-running case concerning its state-controlled lottery monopolies, confirming that the European Commission (EC) must open an investigation into the country’s licensing process. The decision marks the latest development in a legal dispute that dates back to 2016, centering on allegations that the Netherlands unfairly renewed monopoly lottery licences without conducting an open tender.

In its latest ruling, the ECJ rejected the Dutch government’s attempt to overturn a 2023 judgment by the EU General Court, which found that the European Commission had failed to properly assess whether the Netherlands had granted unlawful state aid by extending its monopoly licences to incumbent lotteries. The General Court had ruled that the Commission should have investigated whether these extensions provided financial advantages to existing operators without fair competition.

As a consequence of the ECJ’s decision, the Netherlands must bear its own legal costs and reimburse the additional expenses incurred by the defendant, the European Gaming and Betting Association (EGBA), which initiated the case.

The dispute originated in 2016 when the EGBA lodged a formal complaint with the European Commission, arguing that the Netherlands’ renewal of monopoly licences without an open tender violated EU state aid rules. The trade association claimed that by extending licences to existing lottery operators without competition, the Dutch government had effectively granted them an economic advantage inconsistent with EU law.

In its 2023 ruling, the General Court found that the Commission had erred in dismissing the EGBA’s complaint and that it should have more closely examined whether the licence holders’ obligation to contribute a share of their proceeds to certain charities might constitute a form of indirect state aid. The Netherlands subsequently appealed that decision, seeking to have the EGBA pay all related legal costs.

However, on Thursday, the ECJ reaffirmed the General Court’s findings, dismissing the Netherlands’ appeal in full and confirming that the European Commission must reopen its investigation. As a result, the EC will now be required to assess how the Netherlands’ gambling monopolies distribute proceeds, including whether indirect beneficiaries such as charities received state aid through the licensing framework. The Commission must also examine whether the country’s tender process for lottery licences amounted to an unfair allocation of state support.

Following the ECJ’s ruling, the EGBA welcomed the outcome, describing it as a significant victory for the integrity of EU law enforcement. EGBA Secretary General Maarten Haijer said in a statement that the judgment represents “a clear victory for the proper enforcement of EU law.”

Haijer stated: “The court has confirmed what we said all along: the Commission must investigate state aid complaints thoroughly and cannot take shortcuts. While this case dates back to 2014, it remains relevant today. It demonstrates that the Commission must fulfil its responsibilities as guardian of the treaties – and that there are consequences when it fails to do so.”

He further emphasized that EU member states are obligated to maintain fairness and transparency when awarding gambling licences, ensuring that such processes remain open and competitive. The ECJ’s decision effectively closes the Netherlands’ legal options in the case, clearing the way for the European Commission to initiate a detailed investigation into whether the country’s lottery licensing practices breached EU state aid rules.

By fLEXI tEAM