Is the Extension of Italian Sports Betting Licenses Unlawful?
By: Giulio Coraggio
ITALY (March 27, 2023) — A recent decision of the European Court of Justice gave room to potential challenges to the extension of Italian sports betting licenses that might be deemed unlawful, and the same reasoning might also apply to other recently extended licenses.
The ECJ decision against the extension of Italian sports betting licenses
An Austrian sports betting operator had requested the Italian gambling authority, ADM, to enter the Italian market and received a denial since the operator was not already established in the Italian market and, as such, it did not fulfill the applicable requirements. Following such a denial, a criminal proceeding had started for the illegal offering of games in Italy without the license to which the court objected that the extension of sports betting shop licenses from 2016 created de facto a barrier to the entrance of new operators in the market referring the case to the European Court of Justice.
The European Court of Justice in the case C-517/20 held that “Articles 49 and 56 TFEU must be interpreted as meaning that they preclude an extension of concessions in the gambling sector and the rights arising from the regularization of the situation of data transmission centers that were already operating, at a certain date, betting collection activities on behalf of foreign bookmakers without a concession and a police license, if and insofar as such an extension, which may be justified in particular by imperative reasons of general interest such as the objective of ensuring continuity of control over operators in this sector in order to guarantee consumer protection, is not suitable for ensuring the achievement of this objective or goes beyond what is necessary to achieve it.”.
The presence of reasons of general interest justifying the extension of licenses has to be assessed by the local courts, and the ECJ added that “awarding concessions on the basis of a new call for tenders would, on the one hand, constitute a measure less restrictive to the fundamental freedoms enshrined in Articles 49 and 56 TFEU than the aforementioned extension and, on the other hand, does not seem likely to jeopardize the achievement of that objective.” drawing the route of a potential challenge of the current extension of betting and gambling licenses.
What will happen to the Italian gambling licenses currently extended?
In a previous article, I covered the decision of the Italian Parliament to grant an extension until December 31, 2024, for gaming licenses on remote games, bingo halls, the management of AWPs and VLTs, and land-based sports and horse betting, including bets on virtual events to align the term of all these licenses, and then launched a new tender for all these licenses.
The purpose of the Parliament might be reasonable. However, for Italian sports betting shop licenses, we assisted with multiple extensions over the years, and for the other licenses, like remote gambling licenses, this might be seen as a restriction to the entrance into the market of other operators since licenses were not available for several years.
Besides, the Italian gambling advertising ban further restricts the entrance into the market since a new entrant operator would not be able to communicate its brand and offerings to potential customers.
As such, given the position of the European Court of Justice in the above-mentioned case, there is an actual risk that Italian courts might deem both the extension of the Italian betting and gambling licenses and the gambling advertising ban unlawful, forcing the Government to launch a tender for new licenses immediately and to waive the ban on advertising.
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SOURCES: GamingTechLaw / DLA Piper.Tags: Italy, Sports Betting Licenses, European Court of Justice (ECJ)