The European Court of Justice (ECJ) this week rejected the Dutch government's appeal against a 2023 ruling, upheld the original judgment, and required the European Commission to conduct a comprehensive investigation into the licensing process for the Dutch lottery monopoly market. The case originated from a complaint by the European Gaming and Betting Association (EGBA) in 2016, accusing the Netherlands of extending the existing operator's monopoly license without a public tender, violating EU state aid rules. In 2023, the EU General Court ruled that the European Commission had failed to investigate the case adequately, and the Netherlands appealed but was rejected, now having to bear all litigation costs and pay additional costs incurred by EGBA. The European Commission will be required to assess the aid distribution in the Dutch gambling monopoly, including whether indirect funding to charities constitutes illegal state aid.
Case Background and Origin
The Dutch lottery monopoly case handled by the European Court dates back to 2016, when the European Gaming and Betting Association (EGBA) filed a complaint with the European Commission. EGBA accused the Dutch government of directly extending the existing lottery company's monopoly license without a public tender process, violating EU state aid rules.
The complaint emphasized the lack of competitiveness and transparency in this process, which could constitute illegal state aid, damaging fair market competition.
2023 Ruling and Appeal
In 2023, the EU General Court ruled that the European Commission had not adequately investigated whether the Netherlands provided illegal state aid through the monopoly license. The court specifically pointed out that it was necessary to analyze whether the license holder's practice of paying part of the profits to charities constituted indirect state aid.
The Dutch government appealed this ruling and requested that EGBA bear all related legal costs, attempting to overturn the original judgment.
Final Judgment of the European Court
This week, the European Court completely rejected the Netherlands' appeal, upholding the 2023 General Court's ruling. The court determined that the European Commission has a responsibility to thoroughly investigate state aid complaints and cannot simplify procedures or ignore potential violations.
The Netherlands was ordered to bear all litigation costs of this case and pay additional costs incurred by EGBA, marking the end of a long legal process.
Investigation Requirements and Subsequent Actions
According to the judgment, the European Commission will be required to conduct a comprehensive investigation into the aid distribution situation of the Dutch gambling monopoly enterprise. The investigation will assess whether the licensing process promotes illegal state aid, including indirect funding to charitable organizations.
The European Commission needs to review whether the Netherlands provides undue advantages to existing operators through non-competitive procedures.
Core Dispute Points of the Case
The core dispute of this case is whether the Netherlands' extension of the monopoly license violates EU state aid rules. EGBA advocates that public tendering is a necessary procedure to ensure fair competition, and the direct renewal by the Netherlands without tendering may constitute illegal aid.
The court supported this view, stating that the European Commission has an obligation to investigate the substantive content of such complaints.
EGBA's Response and Industry Views
EGBA Secretary-General Maarten Haijer welcomed the European Court's ruling, calling it an "obvious victory for the correct implementation of EU law." Haijer stated: "The court confirmed our long-standing claim: the Commission must thoroughly investigate state aid complaints and cannot take shortcuts."
Haijer emphasized that EU member states must ensure fair competition procedures when issuing gambling licenses, maintaining market fairness.
Legal Significance and Impact
This ruling establishes the responsibility standards of the European Commission in investigating state aid complaints, requiring a comprehensive review rather than procedural handling. The case serves as a warning to EU member states, emphasizing that license issuance must comply with fair competition principles.
The ruling may affect the gambling regulatory practices of other member states, promoting more transparent tendering procedures.
Dutch Government's Position and Subsequent Steps
The Dutch government had argued that its license renewal process complied with regulations, but the appeal was rejected. The Netherlands now needs to bear litigation costs and cooperate with the European Commission's investigation procedures.
The Netherlands may need to adjust its gambling license issuance mechanism, introducing competitive tendering procedures to comply with EU regulations.
The Role and Responsibility of the European Commission
As the guardian of the treaties, the European Commission has a responsibility to ensure that member states comply with EU law. This case ruling emphasizes that the Commission must fulfill its investigative duties and cannot overlook potential state aid violations.
The subsequent investigation results by the Commission may require the Netherlands to amend relevant laws and practices.
Industry Competition and Market Impact
The ruling helps promote fair competition in the European gambling market, preventing undue advantages through monopoly positions. Public tendering procedures can provide market access opportunities for new operators, enhancing industry vitality.
Associations like EGBA look forward to this case promoting a more open and competitive gambling market environment.
Timeline and Procedural Progress
The case began with a complaint in 2016, went through the 2023 General Court ruling, the Dutch appeal, and the final judgment by the European Court in 2025, lasting nearly ten years. The European Commission now needs to initiate a comprehensive investigation into the Dutch license procedures.
The investigation process may involve multiple hearings, document reviews, and effectiveness assessments, and is expected to take a considerable amount of time.
EU Law and State Aid Rules
This case applies EU state aid rules, which prohibit member states from providing any form of advantage that distorts competition to specific enterprises. Monopoly licenses without public tendering may be considered such aid and require strict scrutiny.
The ruling strengthens the enforcement standards of these rules, ensuring their application in actual cases.
